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All publicly traded companies have to deal with the impact that the stock market has on their share prices, but for those in the financial business, difficult market conditions can have an even bigger effect on performance. Leucadia National (NYSE:LUK) has several investments in the financial industry, and coming into its second-quarter financial report, Leucadia investors have had to brace for what could be substantial downward pressure on its income as a result of recent volatility. Let's take an early look at what Leucadia National has had to deal with and whether it can overcome the challenges that the industry faces right now.

Stats on Leucadia National

Expected EPS

$0.25

Expected Revenue

$2.66 billion

Forward Earnings Multiple

139*

Expected 5-Year Annualized Growth Rate

18%

Data source: Yahoo! Finance. * Based on estimates for fiscal 2016.

What's ahead for Leucadia earnings?

In recent months, investors have become more optimistic about the near-term prospects for Leucadia earnings. They've nearly doubled their second-quarter projections, and they've raised their full-year estimates by about 30%. The stock has also rebounded from weaker levels earlier in the year, climbing 7% since mid-April.

Leucadia's first-quarter report showed the pressure that the company has been under from market volatility. Due largely to a nearly quarter-billion dollar loss at its Jefferies brokerage unit, Leucadia posted a net loss of $0.60 per share, and net revenue fell by more than a third. Success in other ventures, including the Berkadia commercial real estate joint venture and the National Beef unit, helped to offset some of those losses, but the market sensitivity at Jefferies was the primary focus for executives in explaining Leucadia's short-term snag.

Will Leucadia recover?

Early in the quarter, Leucadia seemed to be recovering from the financial disruptions in the stock market near the beginning of 2016. U.S. economic growth had picked up, and many saw it as inevitable that the Federal Reserve would move to normalize short-term interest rates and allow the economy to stand on its own. Financial markets didn't shy away from that prospect as they had in previous years, and stocks in particular did well in regaining lost ground from poor performance early in the year.

Indeed, when the Jefferies unit released its fiscal second-quarter results in mid-June, it showed a reversion to more normal levels of activity that would favor Leucadia. Trading revenue jumped 21%, reflecting the stabilization of trading over the recent months. Still, investment banking activity remained muted, and that pulled profit down by 10% for the quarter.

The Brexit vote, however, renewed fears about global macroeconomic strength. With U.K. voters having decided to leave the European Union, Leucadia investors once again worried about the impact on the European economy. Jefferies itself noted that uncertainty about the terms of the Brexit and consequences on the economy of the U.K. and of major European countries could have a negative impact on investors' confidence. That in turn might lead to reduced trading activity, hampering Jefferies revenues from that arena as well as leading potential investment banking customers to scale down plans for raising capital. Already, one of the joint ventures that Jefferies has in order to provide funding for corporate transactions has seen its first losses in five years, and that could pour over into Leucadia's overall results as well.

One benefit of the uncertain times in the stock market is that bond market trading has ramped up dramatically and that has helped the Jefferies unit's recovery. Fixed-income revenue climbed by more than half in the fiscal second quarter, and rock-bottom rates could spur more investors to look for ways to trade the bond market in order to take advantage of favorable trends for as long as they last.

In the Leucadia National earnings report, investors need to remember that Jefferies isn't the only part of Leucadia's overall business. Looking beyond the financial industry to see what's happening with Leucadia's other holdings is important in order to retain a big-picture view of the company and its prospects for future growth. In the long run, market volatility should even out, leaving Leucadia reliant on strong performance from all of its businesses. That could prove vital in Leucadia's being able to weather market volatility.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Leucadia National. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.