Earnings Analysis for LEG
Revenue Analysis
Total and Operating Revenue: Over the periods observed, the Total and Operating Revenue saw an increasing trend, escalating from $1,213,600,000 in Q1 2023 to $1,175,400,000 in Q3 2023, before reaching $1,115,100,000 by the end of Q4 2023.
Gross Profit Margins: Similarly, Gross Profit increased correspondingly, starting from $218,600,000 in Q1 2023, up to $214,300,000 in Q3 2023, and slightly reducing to $199,800,000 by the end of 2023. This follows a decreasing trend towards the end of the year, though starting robust early in the year.
Cost Management
Cost of Revenue: Demonstrating an increasing cost structure, Cost of Revenue ascended from $995,000,000 in Q1 2023 to $934,000,000 in Q3 2023, ending the year at $915,300,000.
Operating Expense: Operating Expense displayed a moderate increase throughout the year, from $132,900,000 in Q1 2023 to $127,000,000 in Q3 2023, spiking significantly to $138,500,000 by Q4 2023.
Total Expenses: Total Expenses generally escalated from $1,127,900,000 in Q1 2023 to $1,083,100,000 in Q3 2023, peaking at $1,053,800,000 by the end of the year.
Profitability Analysis
EBITDA: Initially starting strong at $135,800,000 in Q1 2023, EBITDA peaked at $141,500,000 by mid-year and experienced a severe decline to -$320,300,000 by the end of 2023 mainly due to unusual items impacting figures negatively.
Operating Income: Mirroring this, Operating Income was quite stable throughout the year but nosedived from $85,700,000 in Q1 2023 to $61,300,000 in Q4 2023.
Pretax Income: Pretax Income began the year at $68,300,000 and attempted normal ranges but ended the year with a massive loss at -$386,300,000 reflecting impacts from various non-operating expenses and unusual charges.
Net Income: Starting at $53,500,000 in Q1 2023, Net Income maintained a reasonable range year-round until plummeting to -$297,300,000 by the end of 2023, a stark contrast driven by numerous charges and adjustments.
Cash Flow Indicators
Reconciled Depreciation: There is a consistent recognition of depreciation expenses around $45,000,000 across all quarters.
Interest Expense: Interest Expense generally increased over the year, starting at $22,100,000 and stepping up to $21,200,000 by the year-end.
Taxation
Tax Rate: The effective tax rate fluctuated marginally, staying between 0.22 and 0.26 through the year.
Tax Provision: The tax provision reflected the changing income, from $14,800,000 in Q1 2023, rising to $18,000,000 in Q3 2023, then confronted with a bigger impact in the loss by Q4 with -$88,900,000.
Tax Effect of Unusual Items: An extreme negative tax effect of -$98,726,637 was observed in the last quarter, indicating significant tax impacts from unusual items reported.
Shareholder Metrics
Diluted and Basic EPS: Earnings per share (EPS) held stable at around $0.39-$0.40 in the earlier quarters. However, by the end of 2023, the EPS dramatically declined to -$2.18, reflecting the severe net loss.
Average Shares: There was a slight increase in both diluted and basic average shares, mostly remaining around 136,500,000 throughout the year.
Net Income Available to Common Stockholders: This metric also followed the Net Income closely, depicting a similar decline to -$297,300,000 by the year’s end.
Conclusion
LEG’s financial performance in 2023 began healthily but faced heavy setbacks towards the year’s end, particularly in terms of profitability and net earnings attributable to significant unusual items and non-operating expenses. These factors devastated the latter part of the year’s profitability figures, warranting close scrutiny and potentially strategic adjustments moving forward.