Image: Jefferies Group.

Shares of Leucadia National (JEF 0.30%) have had a tough time during the past few years, losing more than half their value since mid-2013. Part of the trouble has to do with its exposure to investment management through its Jefferies Group arm, and along with peer WisdomTree Investments (WT 2.10%), the potential threat to investments under management has helped contribute to the most-recent steep drop in stock prices throughout the sector.

Coming into Friday's fourth-quarter financial report, Leucadia investors were hoping to see signs that the company might finally be starting to turn things around, but Leucadia couldn't issue the all-clear just yet. Let's look more closely at exactly how Leucadia did, and what's next for the company going forward.

Leucadia finished 2015 on a down note
Leucadia's fourth-quarter results didn't give investors everything they'd hoped to see, although the company avoided the loss that it posted in the previous quarter. Revenue declined another 7%, to $2.50 billion, which was a steeper drop than the consensus forecast had anticipated.

On the bottom line, Leucadia reversed a year-ago loss, posting net income of $55.6 million. That translated to adjusted net earnings of $0.18 per share when you exclude the operating results of the Bache business under Jefferies. Including those figures yielded GAAP earnings of $0.15 per share, which was roughly in line with what investors were expecting.

Once again, the details of Leucadia's results included some negative charges. The company took a $40.7 million non-cash charge to make a voluntary lump-sum offer to pension participants in the WilTel pension plan. Leucadia also took a $20 million impairment to write down asset values at its Juneau Energy unit.

More importantly, Leucadia said that conditions at its Jefferies and National Beef units continued to be difficult. For Jefferies, the volatility and falling prices in a wide variety of asset classes have created challenging conditions for the asset manager, although Leucadia said that the measures it took toward the end of 2015 have started to pay off for the division.

The cattle market hasn't been kind to National Beef, but Leucadia is seeing some signs of a turnaround as industry players rebuild their herds. The company said that its Berkadia, Garcadia, Conwed, and Idaho Timber units are performing well, but its FXCM foreign-exchange trading unit and its investment in HRG will continue to produce volatile fair-value adjustments.

What's next for Leucadia?
CEO Rich Handler pointed to the many headwinds facing Leucadia. "New issue capital markets are barely open," Handler said, "and Investment Banking deal flow is sparse, as many transactions are being delayed due to market conditions." The CEO also noted how Jefferies has had to take some markdowns on the equity positions that it holds as part of its inventory.

The key thing that investors need to remember about Leucadia is that its biggest businesses don't necessarily generate the largest profits. National Beef is responsible for two-thirds of Leucadia's revenue, but it has lost money in each of the past three years. Jefferies has been more consistently profitable with its 20% to 25% share of sales, but a lot of the profits came from Leucadia's other financial and merchant-banking businesses.

As long as markets remain uncertain, Jefferies will weigh on Leucadia. Investors in WisdomTree Investments have had similar concerns, as the ETF provider has experienced outflows in recent quarters that would potentially threaten its business model if they persist. WisdomTree has worked to diversify its offerings to investors to capture changing trends, but whether WisdomTree will be successful remains to be seen. For Leucadia, the exposure to the financial industry through both Jefferies and FXCM and other businesses represents an even bigger challenge.

Investors weren't happy with Leucadia's report, sending the stock down about 2% in after-hours trading following the announcement. Until the company finds a way to shore up its ailing major segments, Leucadia could have a hard time bouncing back.