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Supply chain braces for impacts from China"s dual carbon goal

Countries around the world have all set their goals for a more sustainable future with fewer carbon emissions. Denmark, Sweden, France, the UK, Hungary, and New Zealand have set their carbon neutrality goals in law and are aiming to reduce carbon dioxide (CO2) emissions to net-zero between 2045 and 2050......»»

Category: topSource: digitimesDec 4th, 2021

We Analyzed the Emissions 4 Families Generated in a Week. Here’s What We Learned About Living Greener

If 2021 was one of our last, best, chances to save the planet, it was also the year that we bought lots and lots of stuff, cooped up at home and frustrated with the pandemic. That shopping acted counter to the goal of reducing our carbon footprint; consumption drives about 60% of greenhouse gas emissions… If 2021 was one of our last, best, chances to save the planet, it was also the year that we bought lots and lots of stuff, cooped up at home and frustrated with the pandemic. That shopping acted counter to the goal of reducing our carbon footprint; consumption drives about 60% of greenhouse gas emissions globally, as the factories that make our stuff and the ships and trucks that bring it to us generate emissions, not to mention the emissions caused by mining for raw materials and farming the food we eat. Amazon alone reported in June that its emissions went up 19% in 2020 because of the boom in shopping during the pandemic. [time-brightcove not-tgx=”true”] Still, it can be hard, as an individual or a family, to care enough to change habits. Buying things has become one of the few sources of joy for many people since COVID-19 began sweeping the globe—and shopping online has become necessary for people trying to stay at home and avoid potential exposure. But goods are so cheap and easily available online that it feels harmless to add one more thing to your shopping cart. Convincing yourself to be environmentally conscious in your shopping habits feels a bit like convincing yourself to vote—obviously you should do it, but do the actions of one person really matter? As I kept buying things that I thought I needed while cooped up at home, I wondered: how much was my shopping, individually, contributing to climate change? Those pairs of extra-soft sweatpants, those reams of high density rubber foam that I use to baby-proof my apartment, those disposable yogurt bins and takeout food containers, all made from plastic and paper and other raw materials; was I—and other U.S. families spending so much money on stuff—making it that much harder to reach the COP26 goal of preventing warming from going beyond 1.5°C? Read more: Our Shopping Obsession is Causing a Literal Stink In order to estimate the carbon footprint of the shopping habits of families like mine, I asked four families in four cities—Denver, Colo., Atlanta, Ga., San Francisco, Calif., and Salem, Mass.—to track their spending the week beginning on Cyber Monday, Nov. 29, so I could try to determine what parts of their holiday spending were most harmful to the environment. I chose to calculate their carbon footprint rather than other impacts like the amount of water used to make the products they bought because scientists agree on the urgency of reducing greenhouse gas emissions to protect the planet’s future.   Courtesy photoThe baby in the Salem family opens a holiday gift. Measuring one’s carbon footprint is difficult, especially because much of the environmental impact from spending is upstream, at the factories that burn fossil fuels to make cars, for example, and at the farms that raise cows for our consumption and release methane. So I asked for help from David Allaway, a senior policy analyst at the Oregon Department of Environmental Quality, who has been working for years to calculate the carbon footprint that comes from consumer spending. To figure out how much the consumption habits of Oregonians contribute to climate change, and what the state should be doing to remedy this, Allaway commissioned the Stockholm Environment Institute to produce the first state-level analysis of the environmental footprint of Oregon’s consumer spending in 2011. This analysis, called consumption-based emissions accounting, roughly estimates the emissions that come from consumer purchases in 536 different categories, including things as specific as beef cattle, books, and full-service restaurants. It counts the emissions of all purchases by consumers, regardless of where those emissions were created—in Mexico, picking, packing, and shipping bananas; in Saudi Arabia, drilling for and refining petroleum. Allaway has refined the analysis since then and completed it again in 2015. Allaway agreed to use the model he has honed to calculate the carbon footprint of these four families, based on how much money they spent in each category. The families sent me their expenses, excluding housing, and I entered them into the categories in Allaway’s model. This is, of course, an inexact model: The families only tracked one week of spending, and their spending was self-reported, so it’s possible they missed an expense or two. Still, the estimates give a good overview of the emissions driven by the behavior of different families. They only tracked one week of spending, and I prorated their electricity and power costs, so this is still an inexact calculator. A family might spend a lot one week and not much the following week. Still, the estimates give a good overview of just how much of a difference individuals can make in reducing their carbon footprint, and they shed light on exactly how our spending drives emissions. Although many consumers have a lot of guilt about disposing of things once they’re done with them, whether it be plastic packaging or a shirt that they’ve worn a few times and then stained, we just looked at consumption. That’s because the emissions from the disposal of goods is tiny compared to the emissions created from producing something in the first place. “By the time you purchase something, 99% of the damage has already been done,” Allaway told me. This means that the “reduce” part of “reduce, reuse, recycle,” is the most important. Read more: How American Consumers Broke the Supply Chain Buying less stuff is a piece of reducing emissions, but families can most reduce their carbon footprints through their eating and travel habits. The Denver family, which is vegetarian and has solar panels on their roof, had a significantly smaller footprint than the others. The families that ate beef and dairy and that bought plane tickets were responsible for the most emissions. There’s a reason the Swedish have a word “flygskam,” or “flight shame”: one flight can cancel out the most tightfisted family’s progress for a week. In general, spending on services and experiences, like concert tickets or museum subscriptions, is more environmentally friendly than spending on goods, because part of what you are paying for is labor. Allaway estimates that every $100 spent on materials accounts for about three times more emissions than $100 spent on services. Of course, there are exceptions—spending $100 on a steak dinner for two could have higher emissions than spending $100 on groceries to make a vegan meal at home. A few more quick caveats: these are all families with annual incomes of more than $100,000, and I sourced them from friends of friends and social media. They are all white, which is the group that is responsible for the highest levels of consumption in the U.S., and as a result, the most emissions. TIME agreed to use only their initials and the cities in which they live in order to encourage them to openly share their consumption habits without fear of being shamed for their purchases. The results varied widely, from a family in San Francisco that had a weekly carbon footprint of 1,267 kg of carbon dioxide equivalent—about the same as driving from New York to San Francisco in a gas-powered car—to the family in Denver whose weekly carbon footprint was just 360 kgCO2, the equivalent of driving from Denver to Tucson. Here are their detailed weekly breakdowns. The Family That Spends a Lot Online A.S. + W.H. Location: Salem, Mass. Children: 1-year-old Combined household income: about $200,000 Total emissions: 819 kgCO2e   This family spent about $2,800 for the week and had a carbon footprint of 819 kgCO2e, the equivalent of a passenger car driving 2,058 miles, according to the EPA’s Greenhouse Gas Equivalencies Calculator. That’s the same as they would have emitted from driving from Salem, Mass. to Charleston, S.C., and back. A.S and W.H. own their home in the coastal community of Salem, Mass. and have a baby daughter. Before becoming parents, the couple was used to buying things and using them for years. But they’re finding that as their daughter grows, their pace of shopping has sped up. “One of the things that makes having a baby so wasteful is that you need something, and when you need it, you need it urgently,” A.S. told me. “You need it for three weeks, and then you don’t need it anymore.” Online shopping has been a source of contention for the couple; W.H. buys almost everything online, which his spouse thinks creates needless waste. The two have asked their extended family to cut back on buying goods and to gift them experiences or services instead, but relatives have been resistant to change. Their biggest single source of consumption-based emissions from the week, 138 kgCO2e, came from buying stuff online. They spent $298.99 for gifts for two family friends: two subscription boxes from Little Passports, which will send the recipients crafts, puzzles and books about different locations around the world for a year. This falls into the “dolls, toys, and games” category, which means the emissions-per-dollar would have been calculated the same regardless of what dolls, toys, and games they bought. Most of the emissions in this category come from the factories that make this stuff, rather than the materials mined or produced to create them, Allaway said, so it wouldn’t really matter environmentally whether they bought these toys at Amazon, Walmart or at a local toy store. They also bought a $269.20 wall sconce, a purchase that created 105 kgCO2e. Aside from those purchases, their biggest emissions came from the food they ate—specifically beef and dairy products. A.S. and W.H. had a pizza dinner with family during the week and a few snacks and coffees at local restaurants; all meals out, whether sit-down or take-out, are categorized as services. But they did buy around $40 worth of ice cream, yogurt and cheese, and they participated in a food share that provided them with around $28 of red meat (the protein changes every week.) Dairy and beef cause a lot more emissions than vegetables; the family spent roughly the same amount on vegetables and on dairy products, but the dairy was responsible for more than double the emissions as their veggies. The couple told me that they’ve been trying to cut back on dairy but have had a hard time finding an environmentally-responsible alternative; almond milk uses up crucial water, for example, and coconut milk requires a lot of emissions-heavy transport to get from where coconuts are grown to New England. They also wonder whether cutting back on things they enjoy is worth the sacrifice. Spending $30 on beef produces about 47 kgCO2e, which is the same as driving about 120 miles. Why should they stop buying cheese if their neighbor is driving that far to commute to and from work every week? “That’s one of the big pieces of friction between me and my husband,” A.S. told me. “I think he sees this as too big of a problem for any individual behavior to change.” The Family That Eats Out a Lot M.C. and N.A. Location: Atlanta, Ga. Children: 14 months and 3 ½ years old Combined household income: $100k-$200k Total emissions: 757 kgCO2e   This family spent about $1,361 for the week and had consumption-based emissions of 757 kg CO2e, the same as if they’d driven a car 1,902 miles, according to the EPA’s Greenhouse Gas Equivalencies Calculator. That’s the distance from Atlanta to Las Vegas. The Atlanta family’s emissions came in slightly lower than the Salem family’s. M.C. told me that this week was atypical for them because they usually buy diapers and fill up on gas, and they didn’t do either this week. They did eat out a lot—they were surprised by how much, once they started counting, but because of the way Allaway’s model works, restaurants are a lower-emissions way to spend money than buying a lot of goods. (The model doesn’t account for what you eat at a restaurant, but since so much of a restaurant’s bill is for service, rather than a tangible product, the spending often creates lower emissions.) M.C. told me that because they’re in their car so much, they often stop by quick-service restaurants like Chick-Fil-A to get a fast dinner if they don’t have time to prepare something at home. The pandemic has made them feel guilty about the environmental repercussions of eating out so much, because even sit-down restaurants serve food on disposable plates, with plastic utensils. But their biggest source of emissions for the week was something out of their control—electricity generation. Their electricity bill is about $200 a month but can be as high as $500 in the summer and winter, the family told me. I prorated that to $50 a week, which led to 254 kg CO2e, one of the highest single weekly sources of emissions for any family. (That’s the equivalent of a car driving from New York to Detroit.) The Atlanta and Denver households had higher emissions from their electricity and natural gas bills than the other two families in part because these regions are more reliant on coal-fired power plants, Allaway said. N.A., who works in finance, takes public transit to work, and the family has been trying to move away from spending money on things and toward spending on experiences. But something like cutting back on red meat or being more conscious about the products they buy can be hard, M.C. said. She has enough going on already. “With two little kids, I don’t think about it,” she said. The Family That Travels A.A. and M.T. Location: San Francisco Children: 18 months Combined household Income: more than $300,000 Total emissions: 1,267 kg CO2e   The wealthiest families create the most emissions, and that was certainly true with the San Francisco family, which was the highest-earning of the four families and which generated the highest emissions: the equivalent of driving from San Francisco to Miami. A.A. told me she thought the family had been buying way too much stuff online, and they did buy more stuff online than any of the other families —$60 on clothes from Target, $23 for a baby float on Amazon, $48 for diapers on Amazon, $21 for baby wipes. They also shopped at brick and mortar stores—$26 at a local bookstore, $37 at CVS for razors and snacks, $18 at a local hardware store. And they spent a lot on restaurants—about $300 in total. But none of those purchases drove the bulk of their emissions. Instead, that came from a $400 purchase of two round-trip airline tickets from San Francisco to Los Angeles, which created 436 kg CO2e, the single largest emissions from any purchase of the four families for the week. Because prices were discounted when they bought the tickets, that’s probably a low estimate of the emissions from their flight; the emissions calculator run by myclimate, an international nonprofit, estimates that a roundtrip flight for two between those two cities would generate 614 kg of CO2e, more than the 333 kg the family would have created by driving. (Taking a train would have lowered their emissions further, but also would have taken 12 hours one way.) They also spent $400 on hotel reservations, leading to 123 kg CO2e. This is intuitive—we all know that flying creates a lot of emissions. But it was illuminating to see just how much more it creates than other things do. That one trip to LA bumped the family’s emissions from 708 kg in the week to 1,276. A.A. told me they haven’t flown much since the pandemic started and bought the tickets to attend a close friend’s wedding. In the last two years, they’ve flown far less than they did before the pandemic and before having children. Instead, they’ve stayed home and explored San Francisco, or driven to destinations within an hour or two. They say they feel lucky to be able to do that where they live and will think twice before buying plane tickets on a whim going forward, but that unless costs go up, it may be hard to resist a getaway. The Family That Buys Used M.C. and N.A. Location: Denver Children: 9, 7, and 4 years old Combined household income: More than $200,000 Total emissions: 360 kg CO2e The Denver family has been trying to be more environmentally-conscious for years, and they had the lowest emissions, despite having the most family members (although they were the only family without a kid in diapers.) Their emissions were far lower than those of the other three families, adding up to the equivalent of a drive from Denver to Tucson. They do just about everything they can do to reduce emissions: M.C. doesn’t eat meat or cook it at home; her husband and children only eat meat if it’s served at a friend’s house. The family tries to avoid dairy products (one of the items they bought this week was vegan “egg”nog); they buy used clothes from ThredUp; their home has solar panels. M.C. said the family has always been conscious about reducing waste but became more serious about it a few years ago; when all their friends were moving to the suburbs, they moved to a more urban area of Denver, where N.A. could walk to work. “The driving we were doing was more impactful than the plastic wrap on a bag of pasta,” M.C. said. The couple knew they would have to make some sacrifices when they had children, but they didn’t want to give up on their environmental goals. They decided to wrest control over what their life looked like. “We realized that we could make some more intentional choices, set up our life in a way that not only decreased environmental impact, but also made our life happier,” she said. They enjoy being able to walk to so many places. M.C. has really never liked meat; she would occasionally cook it for her kids but stopped doing so three years ago. They’ll treat themselves to real cheese or real eggnog occasionally, but usually they go vegan. Their biggest emissions came from their use of natural gas—they spend about $44 a month on natural gas, despite their solar panels. Because solar power is so variable—it may be sunny one day, and then cloudy for a week—most systems that run on renewables like solar also use some natural gas. Still, the Denver family avoided a lot of emissions in places where other families didn’t. They spent $156 on clothes, but all from ThredUp, a used clothing site, which generated only 17 kg CO2e, according to Allaway’s estimates. The San Francisco family, by contrast, spent $61 on new clothes, which resulted in 26 kg CO2e. (Allaway’s model treats used goods as having a very low carbon footprint because it assigns the carbon footprint to the previous user, who bought them new; but buying used clothes does have some carbon footprint since the clothes are transported from the warehouses where they’re stored.) M.C. said she knows her kids might resist wearing used clothes as they get older and that there may be a day when they don’t want Christmas gifts from the thrift store. But they’re trying to teach their children not to be consumed by materialism, she said. She wants them to find happiness from something other than new things. When I asked M.C. if she thought her sacrifices were worth it, she said yes. Her family’s choices allow the couple and their children to focus on relationships, she said. She hopes she has motivated some friends and family to change their behavior, too. But ultimately, it’s about being aware of the urgency of environmental awareness, she said. “By trying to reduce my own emissions, that helps me stay in touch with the broader issues and think about the ways I can be an advocate for change in the areas that really will have an impact,” she said. What Your Family Can Do Of course, the emissions that the Denver family saved compared to the San Francisco family would be wiped out by one individual taking an hourlong flight on a private jet. It can be hard to rationalize making dramatic behavioral changes when reducing individual emissions can feel fruitless. Even the annual emissions of the San Francisco family—around 66 metric tons of CO2—pale in comparison to the electricity use of just one U.S. supermarket over the course of a year: 1,383 metric tons of CO2. But changing your behavior is not fruitless, Allaway says. Individuals by themselves might not be able to make enough of a difference to prevent the worst effects of climate change, but collective action—lots of individuals working together—might. Still, many of our preconceived notions about what to buy can be wrong. In the winter, Oregon consumers who buy tomatoes from nearby British Columbia have a bigger carbon footprint than those who buy tomatoes from faraway Mexico, because the Canadian tomatoes are grown in power-hungry greenhouses, Allaway has found. Out-of-season apples from New Zealand may have less of a carbon footprint than local apples that have been put in cold storage for months. Coffee beans delivered in a fully recyclable steel container have a higher climate impact than beans delivered in non-recyclable plastic because of the steel container’s weight. There are behavioral changes you can make that will almost certainly lower your emissions. You can reduce your driving and flying. You can switch to renewable energy. You can buy lighter goods, which use less materials than heavyweight goods, and buy things that have to travel a smaller distance to get to your home (although that in itself is hard to parse out, because a “locally-made” toy may have been created from materials imported from China, which negates the benefits of buying something local). You can buy things that are made from plants rather than animals, and buy used goods whenever possible. (Of course, there’s a caveat there, too—buying a used car that is a gas guzzler would be worse than buying a new electric vehicle.) But if you’re trying to choose individual products that were created with lower emissions, you’ll have a tough task ahead of you. Right now, one of the only ways to know which products have the lowest carbon footprint is to read their life cycle assessment, which is a document that measures their environmental impact from cradle to grave. In Europe, many companies also offer Environmental Product Declarations, which are abbreviated versions of life-cycle assessments, says Sarah Cashman, director of Life Cycle Services at ERG, an environmental consulting group. These documents are hard to decipher, dotted with words like “eutrophication potential,” (the nutrient runoff from farming or manufacturing). EPD InternationalA chart in a 49-page diaper environmental product declaration document There is no report card that lets customers easily see which products are made, transported, and sold with lower emissions than others. Amazon has tried to start labeling some products as “climate-pledge friendly” so that shoppers can choose green products that have received a third-party sustainability certification from a qualifying organization. But even that puts a lot of burden on a consumer to read every label on every item that they buy. So much responsibility for creating less waste has already fallen onto the consumer that asking them to take one more step, as the families above said, is too much. There is a solution, though. Consumers can demand more from companies, who can take on the responsibility of lowering emissions for the products they make every step of the way. The supply chains of eight global industries account for more than 50% of greenhouse gas emissions, according to the Boston Consulting Group. There are companies that already have a head start. Patagonia says that 86% of its emissions come from the raw materials it uses and their supply chains, and through its Supply Chain Environmental Responsibility Program, it is aiming to use only renewable or recycled materials to make its products by 2025. Most companies won’t do this unprompted, but if consumers start shopping at places that are reducing emissions in their supply chain, companies will start looking at their supply chains in order to stay in business. A database of companies that are legitimately working on this would be a good first step. It may feel like there’s nothing you can do as an individual or as a family, but collective action could look like millions of families preferring to shop at places that are working to dramatically reduce emissions in their supply chain. Buying less may not be an option for many families, but Americans have proved, if nothing else, that they know how to shop smart.  .....»»

Category: topSource: timeJan 6th, 2022

Hooker Furnishings Reports Third Quarter Results

MARTINSVILLE, Va., Dec. 09, 2021 (GLOBE NEWSWIRE) -- Hooker Furnishings Corporation (NASDAQ-GS: HOFT) today reported consolidated net sales of $133.4 million for its fiscal 2022 third quarter ended October 31, 2021, a $16.3 million, or 11%, decrease compared to the prior year period. Consolidated operating loss for the fiscal 2022 third quarter was $1.7 million, compared to $13 million of operating income in the prior year period. Net loss for the third quarter of fiscal 2022 was $1.2 million, or $0.10 per diluted share, as compared to a net income of $10.1 million, or $0.84 per diluted share, in the third quarter of fiscal 2021. The third quarter revenue decline follows two consecutive quarters of double-digit sales and income gains at Hooker Furnishings and was driven by significantly reduced shipments in the Home Meridian segment (HMI) due to COVID-related factory closures in Vietnam and Malaysia. The HMI sales decrease was partially offset by double-digit sales increases in the Hooker Branded and Domestic Upholstery segments versus the prior year period. These two segments have provided five consecutive quarters of higher net sales. Consolidated operating income and margin decreased in the quarter primarily due to the sales volume reduction at HMI, along with higher freight and product costs. In addition, HMI had three unusual charges during the period, including $2.6 million in one-time order cancellation costs to exit the ready-to-assemble (RTA) furniture category. This was a move HMI made to improve long-term profitability by eliminating a low-margin category. Also, HMI experienced higher than expected chargebacks with two clubs channel customers which negatively impacted net sales and operating income by $1.9 million. "Despite favorable demand for home furnishings and a historically strong order backlog triple typical levels for Hooker Furnishings, we were challenged by ongoing supply chain disruptions, especially the slower-than-expected reopening of Vietnam and Malaysia factories," said Jeremy Hoff, chief executive officer. "The COVID-related factory closings in Vietnam and Malaysia began around August 1st and did not begin reopening until late in the quarter, and then at only about 25% capacity," he said. "We expect the factories will begin to approach 50% capacity in the near future." "Industry-wide inflationary pressures also were a factor in reduced income," Hoff said, along with "making some decisions now that will have short term adverse impacts but will strengthen the Company in the long term. For example, exiting the HMidea RTA category increased consolidated cost of goods sold by 200 bps and contributed to the quarterly loss, but we believe this move will save an additional $10 million in product and freight costs related to RTA products on order and help us focus our resources in the areas where we can be most competitive and profitable," Hoff said. For the fiscal 2022 nine-month period, consolidated operating income was $20.2 million compared to a $24.9 million operating loss in the prior year period. The loss last year was mainly attributable to $44.3 million in non-cash impairment charges on certain intangible assets due to the impact of the COVID crisis on the Company's share price in the prior year. Consolidated net income for the fiscal 2022 nine-month period was $15.7 million or $1.30 per diluted share, as compared to net loss of $19.0 million, or a loss of $1.61 per diluted share in the prior year period. Segment Reporting: Hooker Branded Net sales increased by $8.7 million, or 18.5%, in the Hooker Branded segment compared to the prior year quarter, driven by higher demand and inventory availability, as well as lower discounting. Commenting on the consistent and vibrant growth in the segment, Hoff said, "The diversification of the Hooker Branded product portfolio to address a wide variety of lifestyles in our price points has had a major positive impact. The introduction of our new Commerce & Market accent furniture collection this summer, along with the ongoing strength of our Mélange accent collection, has significantly expanded our leadership position in the accent furniture category," he said. "In addition, our strategy to rationalize our stocking inventory to focus on top sellers is helping us maximize shipping and production capacity, product flow and cash utilization." While sales continue to reflect strong demand and a healthy furniture demand environment, higher ocean freight and product cost inflation impacted gross margin in the segment, diluting the gains from sales increases in the third quarter. The Hooker Branded segment has implemented price increases to mitigate increased product costs; however, due to current order backlog levels and customer price changes taking effect at different times, the Company anticipates seeing the benefits of price increases in future periods as more products sold carry these increased prices. Additionally, the segment is starting to see another round of product and logistics costs increases which will likely necessitate additional customer price changes. Despite these adverse factors, the Hooker Branded segment reported $6.7 million in operating income, or an 11.9% operating margin. Incoming orders decreased slightly by 1.9% as compared to prior year period when business dramatically rebounded. Backlog remained historically high, nearly doubled as compared to the prior year third quarter end, when backlog was already elevated versus historical averages. Segment Reporting: Home Meridian The Home Meridian segment's net sales decreased by $27.5 million, or 37.3%, compared to the prior year third quarter, driven by inventory unavailability due to the temporary, COVID-related closure of factories in Vietnam and Malaysia during the period. The segment reported a $10 million operating loss largely attributable to reduced shipments and higher product costs primarily from increased freight charges. In addition, higher than expected chargeback from two clubs channel customers and inventory cancellation costs related to HMidea's RTA business contributed to the operating loss. "Despite the disappointing financial results at HMI, we believe the challenges are short-term," Hoff said. "We expect to see some improvements next quarter as the Asian factories increase capacity, but we don't expect them to ramp up to full capacity until the second quarter of next year. We are encouraged that demand remains strong, with Home Meridian finishing the quarter with backlogs 12% higher than last year's third quarter, but more than doubled as compared to pre-pandemic levels." "We were pleased in mid-October to open a highly-efficient, 800,000-square-foot new distribution center in Savannah, Georgia serving HMI and its customers," Hoff continued. "The modern facility is a short distance from the Port of Savannah and will enable us to substantially increase operating efficiencies, reduce our carbon footprint and ship orders faster. Our goal is to put the Company in a best-in-class logistics position, and Savannah is a major step in that direction," he said. Segment Reporting: Domestic Upholstery The Domestic Upholstery segment's net sales increased by $2.6 million, or 10.3%, in the fiscal 2022 third quarter compared to the prior year period, and all three divisions of the segment reported over or close to 10% sales increases. Despite increased material costs, this segment reported operating income of $1.4 million, or 5.2% operating margin for the third quarter. "We continued to be challenged by raw materials shortages, but we saw a lot of improvements later in the quarter, and we expect these positive trends to continue," Hoff said. "Material cost inflation for most raw materials and higher freight surcharges partially offset the gains from increased sales. We believe our latest price increases will mitigate these higher costs in future periods. We are encouraged by historically high backlogs at the end of the fiscal 2022 third quarter at all three divisions." Segment Reporting: All Other All Other's net sales decreased by $134,000, or 4.0%, in the fiscal 2022 third quarter as compared to the prior year period, due to a 5.6% sales decrease at H Contract. On a positive note, as COVID vaccination rates have increased, especially among the senior population, H Contract's incoming orders have increased three consecutive quarters in fiscal 2022 and finished the quarter with backlog 150% higher than the prior year third quarter end. Despite the sales decrease, All Other still reported a 10.7% operating margin for the quarter. Cash, Debt and Inventory Cash and cash equivalents stood at $57.2 million at fiscal 2022 third quarter-end, down $8.6 million compared to the balance at the fiscal 2021 year-end as the Company increased inventory levels somewhat to service the high level of demand it has experienced all year. During the first nine months of fiscal 2022, the Company used cash on hand and $5 million generated from operations to pay $6.4 million in cash dividends to our shareholders and $6.6 million of capital expenditures to enhance our business systems and facilities. Outlook "Consumer and retail demand remain historically strong, with consolidated backlogs nearly triple compared to pre-pandemic level," Hoff said. "However, we expect some level of continued supply chain turbulence and product and raw materials cost inflation to impact our net sales and income in the short term, at least through the second quarter of next fiscal year." "We expect our Hooker Branded and Domestic Upholstery segments will continue to be less challenged than Home Meridian primarily due to more than 70% of Home Meridian's business being direct container versus domestic warehouse distribution. In addition, higher freight costs have a greater impact as a percentage on lower price points for HMI. In the shorter-to-medium-term, we look forward to the expected efficiencies and cost savings from HMI's new Savannah facility. The facility puts us in an excellent position to grow HMI's warehouse business." "We will continue to focus on items we can control such as developing relevant new products to meet consumer needs, operational improvements, managing overhead and costs, and executing our strategic growth initiatives. We remain very optimistic as we manage through a challenging environment," Hoff said. Dividends On December 7, 2021, the Company's board of directors declared a quarterly cash dividend of $0.20 per share, an increase of $0.02, or 11%, over the most recent dividend, payable on December 31, 2021, to shareholders of record at December 17, 2021. Conference Call Details Hooker Furnishings will present its fiscal 2022 third quarter financial results via teleconference and live internet web cast on Thursday morning, December 9, 2021 at 9:00 AM Eastern Time. The dial-in number for domestic callers is 877.665.2466 and the number for international callers is 678.894.3031. The conference ID number is 1241039. The call will be simultaneously web cast and archived for replay on the Company's web site at www.hookerfurniture.com in the Investor Relations section. Hooker Furnishings Corporation, in its 98th year of business, is a designer, marketer and importer of casegoods (wooden and metal furniture), leather furniture and fabric-upholstered furniture for the residential, hospitality and contract markets. The Company also domestically manufactures premium residential custom leather and custom fabric-upholstered furniture. It is ranked among the nation's largest publicly traded furniture sources, based on 2020 shipments to U.S. retailers, according to a 2021 survey by a leading trade publication. Major casegoods product categories include home entertainment, home office, accent, dining, and bedroom furniture in the upper-medium price points sold under the Hooker Furniture brand. Hooker's residential upholstered seating product lines include Bradington-Young, a specialist in upscale motion and stationary leather furniture, Sam Moore Furniture, a specialist in upscale occasional chairs, settees, sofas and sectional seating with an emphasis on cover-to-frame customization, Hooker Upholstery, imported upholstered furniture targeted at the upper-medium price-range and Shenandoah Furniture, an upscale upholstered furniture company specializing in private label sectionals, modulars, sofas, chairs, ottomans, benches, beds and dining chairs in the upper-medium price points for lifestyle specialty retailers. The H Contract product line supplies upholstered seating and casegoods to upscale senior living facilities. The Home Meridian division addresses more moderate price points and channels of distribution not currently served by other Hooker Furniture divisions or brands. Home Meridian's brands include Accentrics Home, home furnishings centered around an eclectic mix of unique pieces and materials that offer a fresh take on home fashion, Pulaski Furniture, casegoods covering the complete design spectrum in a wide range of bedroom, dining room, accent and display cabinets at medium price points, Samuel Lawrence Furniture, value-conscious offerings in bedroom, dining room, home office and youth furnishings, Prime Resources, value-conscious imported leather upholstered furniture, and Samuel Lawrence Hospitality, a designer and supplier of hotel furnishings. Hooker Furnishings Corporation's corporate offices and upholstery manufacturing facilities are located in Virginia and North Carolina, with showrooms in High Point, N.C. and Ho Chi Minh City, Vietnam. The company operates distribution centers in North Carolina, Virginia, Georgia, California and Vietnam. Please visit our websites hookerfurnishings.com, bradington-young.com, sammoore.com, hcontractfurniture.com, homemeridian.com, pulaskifurniture.com, accentricshome.com and slh-co.com. Certain statements made in this release, other than those based on historical facts, may be forward-looking statements. Forward-looking statements reflect our reasonable judgment with respect to future events and typically can be identified by the use of forward-looking terminology such as "believes," "expects," "projects," "intends," "plans," "may," "will," "should," "would," "could" or "anticipates," or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy.  Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.  Those risks and uncertainties include but are not limited to: (1) disruptions involving our vendors or the transportation and handling industries, particularly those affecting imported products from Vietnam, China, and Malaysia, including customs issues, labor stoppages, strikes or slowdowns and the availability and cost of shipping containers and cargo ships; (2) the effect and consequences of the coronavirus (COVID-19) pandemic or future pandemics on a wide range of matters including but not limited to U.S. and local economies; our business operations and continuity; the health and productivity of our employees; and the impact on our global supply chain, inflation, the retail environment and our customer base; (3) general economic or business conditions, both domestically and internationally, and instability in the financial and credit markets, including their potential impact on our (i) sales and operating costs and access to financing or (ii) customers and suppliers and their ability to obtain financing or generate the cash necessary to conduct their respective businesses; (4) adverse political acts or developments in, or affecting, the international markets from which we import products, including duties or tariffs imposed on those products by foreign governments or the U.S. government, such as the prior U.S. administration's imposition of a 25% tariff on certain goods imported into the United States from China including almost all furniture and furniture components manufactured in China, which is still in effect, with the potential for additional or increased tariffs in the future; (5) risks associated with our reliance on offshore sourcing and the cost of imported goods, including fluctuation in the prices of purchased finished goods, ocean freight costs, including the price and availability of shipping containers, vessels and domestic trucking, and warehousing costs and the risk that a disruption in our offshore suppliers could adversely affect our ability to timely fill customer orders; (6) risks associated with domestic manufacturing operations, including fluctuations in capacity utilization and the prices and availability of key raw materials, as well as changes in transportation, warehousing and domestic labor costs, availability of skilled labor, and environmental compliance and remediation costs; (7) changes in U.S. and foreign government regulations and in the political, social and economic climates of the countries from which we source our products; (8) difficulties in forecasting demand for our imported products; (9) risks associated with product defects, including higher than expected costs associated with product quality and safety, and regulatory compliance costs related to the sale of consumer products and costs related to defective or non-compliant products, including product liability claims and costs to recall defective products and the adverse effects of negative media coverage; (10) disruptions and damage (including those due to weather) affecting our Virginia, Georgia, North Carolina or California warehouses, our Virginia or North Carolina administrative facilities, our North Carolina showrooms or our representative offices or warehouses in Vietnam and China; (11) risks associated with our newly leased warehouse space in Georgia, including risks associated with our move to and occupation of the facility, including information systems, access to warehouse labor and the inability to realize anticipated cost savings; (12) the risks specifically related to the concentrations of a material part of our sales and accounts receivable in only a few customers, including the loss of several large customers through business consolidations, failures or other reasons, or the loss of significant sales programs with major customers; (13) our inability to collect amounts owed to us or significant delays in collecting such amounts; (14) the interruption, inadequacy, security breaches or integration failure of our information systems or information technology infrastructure, related service providers or the internet or other related issues including unauthorized disclosures of confidential information or inadequate levels of cyber-insurance or risks not covered by cyber insurance; (15) the direct and indirect costs and time spent by our associates associated with the implementation of our Enterprise Resource Planning system ("ERP"), including costs resulting from unanticipated disruptions to our business; (16) achieving and managing growth and change, and the risks associated with new business lines, acquisitions, including the selection of suitable acquisition targets, restructurings, strategic alliances and international operations; (17) the impairment of our long-lived assets, which can result in reduced earnings and net worth; (18) capital requirements and costs; (19) risks associated with distribution through third-party retailers, such as non-binding dealership arrangements; (20) the cost and difficulty of marketing and selling our products in foreign markets; (21) changes in domestic and international monetary policies and fluctuations in foreign currency exchange rates affecting the price of our imported products and raw materials; (22) the cyclical nature of the furniture industry, which is particularly sensitive to changes in consumer confidence, the amount of consumers' income available for discretionary purchases, and the availability and terms of consumer credit; (23) price competition in the furniture industry; (24) competition from non-traditional outlets, such as internet and catalog retailers; (25) changes in consumer preferences, including increased demand for lower-quality, lower-priced furniture; and (26) other risks and uncertainties described under Part I, Item 1A. "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2021. Any forward-looking statement that we make speaks only as of the date of that statement, and we undertake no obligation, except as required by law, to update any forward-looking statements whether as a result of new information, future events or otherwise and you should not expect us to do so. Table I HOOKER FURNISHINGS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)     For the     Thirteen Weeks Ended   Thirty-Nine Weeks Ended     Oct 31,   Nov 1,   Oct 31,   Nov 1,       2021     2020   2021     2020                     Net sales $ 133,428     $ 149,687   $ 458,807   $ 384,821                     Cost of sales   113,421       116,204     373,501     305,684                     Gross profit   20,007       33,483     85,306     79,137                     Selling and administrative expenses   21,139       19,850     63,343     57,920   Goodwill impairment charges   -       -     -     39,568   Trade name impairment charges   -       -     -     4,750   Intangible asset amortization   596       596     1,788     1,788                     Operating (loss)/income   (1,728 )     13,037     20,175     (24,889 )                   Other income, net   133       158     160     107   Interest expense, net   27       106     81     433                     (Loss)/income before income taxes     (1,622 )     13,089     20,254     (25,215 )                   Income tax (benefit)/expense   (403 )     2,996     4,563     (6,263 )                   Net (loss)/income $ (1,219 )   $ 10,093   $ 15,691   $ (18,952 )                   (Loss)/Earnings per share               Basic $ (0.10 )   $ 0.85   $ 1.32   $ (1.61 ) Diluted $ (0.10 )   $ 0.84   $ 1.30   $.....»»

Category: earningsSource: benzingaDec 9th, 2021

Why Coal Shortages in Asia Might Be Good News for Clean Energy

Power crises in China and India that have caused blackouts and factory shutdowns are highlighting the region’s reliance on the world’s dirtiest fossil fuel: coal. But some experts say the energy supply problems facing two of the world’s largest economies might lead to more support for renewable energy and help to accelerate the sector’s growth.… Power crises in China and India that have caused blackouts and factory shutdowns are highlighting the region’s reliance on the world’s dirtiest fossil fuel: coal. But some experts say the energy supply problems facing two of the world’s largest economies might lead to more support for renewable energy and help to accelerate the sector’s growth. China is facing its worst energy crisis in a decade, with coal shortages driving power outages and rationing. India is teetering on the edge of a power crisis, with stocks of coal at unprecedentedly low levels and states warning of impending blackouts. Some states, like Rajasthan have scheduled power cuts and several thermal power stations across the country have shut due to shortages. [time-brightcove not-tgx=”true”] The issues have been caused by myriad factors, including soaring global coal prices, increasing economic activity, flood and monsoon-related supply disruptions and geopolitical tensions. (China has imposed an unofficial ban on coal from Australia, one of the world’s largest coal exporters.) Experts say that the instability of the coal supply chain is likely to be a boon for clean energy, prompting more investment in the sector. “The investment response I’m expecting will be a doubling or trebling of Indian and Chinese renewable energy installs because the best way to solve a crisis is to remove your energy security problem,” says Tim Buckley, the director of energy finance studies for Australia and South Asia at the Institute for Energy Economics and Financial Analysis (IEEFA). Despite global concern about greenhouse gas emissions and urgent calls for action to avoid the worst impacts of climate change, much of the Asia-Pacific remains reliant on coal, which is widely considered the most polluting fossil fuel. China and India are the world’s biggest consumers of coal. The fossil fuel accounts for around 70% of India’s electricity generation, while 56% of China’s electricity is generated by burning coal. That has harmful consequences; China is the world’s biggest polluter, and India comes in third, after the U.S. More than half of all coal consumed globally in 2020 was used in China, making Asia is the largest consumer of coal by region, according to British Petroleum’s (BP) Statistical Review of World Energy 2021. After China and India, Indonesia and Japan were the largest coal consumers in Asia. Added together, the latter two countries consumed more coal than all of Africa in 2020. Read More: Why China’s Promise to Stop Funding Coal Plants Around the World Is a Really Big Deal The region also produces more than 75% of the world’s coal, with China, Indonesia, Australia, and India leading the way, according to the BP report. China and four other countries—India, Indonesia, Japan and Vietnam—account for more than 80% of the coal power stations planned across the world, according to a June report by the think-tank Carbon Tracker. Environmentalists have raised concerns that the current energy shortages might be used to justify increasing domestic coal production in India and China. India announced in 2019 plans to boost domestic production of coal to a billion tons by 2024. In the first half of 2021, China announced plans to build 43 new coal-fired power plants. Qilai Shen—Bloomberg/Getty Images Coal is unloaded from barges at a dock servicing the Wangting Power Plant in Wangting, Jiangsu province, China, on Sept. 30, 2021. China’s central government officials ordered the country’s top state-owned energy companies — from coal to electricity and oil — to secure supplies for this winter at all costs, according to people familiar with the matter. Dimitri de Boer, China head for the environmental law charity ClientEarth, says that the Chinese government’s response to the crisis has been to ramp up coal production, and to relax production quotas on certain mines. “The instruction right now is to quickly produce enough coal to meet demand to get through the winter,” he says. More potential for renewable energy But the argument for cleaner energy is becoming increasingly convincing. The skyrocketing cost of coal and other fossil fuels, one of the drivers of the energy crises, means that renewables are becoming more cost competitive. “Economics have already won this race,” says Buckley, of IEEFA. The current coal supply problems might prompt Indian Prime Minister Narendra Modi to refocus efforts on his goal to transform India into an “energy independent” nation by 2047, with less reliance on fossil fuels—a target he announced in August. “Countries like China and India can’t face extreme unprecedented price volatility and not respond by protecting their people,” says Buckley. “What will Modi do? Double down on his renewable energy pledge,” He says that would mean the country is no longer at the mercy of global fossil fuel markets. “It’s 100% predictable, it’s got no volatility and it’s domestic.” Unlike many other countries around the world, India has not made a pledge to reduce its carbon dioxide emissions to net-zero, and it has argued that it shouldn’t have to make deep cuts like developed countries because it needs to prioritize growth. But it has set a target to reach 450 gigawatts (GW) of renewable capacity by 2030, and solar power is set for explosive growth in the country, according to the International Energy Agency. That’s already starting to playing out. Last month, a state-owned coal miner that accounts for more than 80% of the country’s coal production put out a tender for partners for a proposed 4 GW solar manufacturing facility in India. Meanwhile, India’s biggest company, Reliance Industries, has announced several clean energy deals in recent days, including the acquisition of a large European solar manufacturing company. Read More: Will China’s Energy Crisis Make It More Reluctant to Fight Climate Change? China has pledged to be carbon neutral by 2060 and to start tapering off its coal use from 2026. ClientEarth’s de Boer says the government won’t let go of those targets, despite the shortages. He says that, even as coal production is increased, controls on high energy-consuming projects are being strengthened. China is already a renewable energy leader, accounting for about 50% of the world’s growth in renewable energy capacity in 2020. De Boer says the current shortages will provide incentive to ramp up clean energy even faster. “It’s giving a very strong impetus and a boost to do everything to ramp up the supply of renewable energy,” he says......»»

Category: topSource: timeOct 13th, 2021

China On Verge Of Stagflationary Shock With 30% Wholesale Inflation On Deck

China On Verge Of Stagflationary Shock With 30% Wholesale Inflation On Deck Back on Sept 30, China stunned markets when reeling from soaring energy prices, widespread blackouts, mass factory closures and a shortage of coal - it's most popular source of power - Beijing ordered energy firms to "secure supplies at all costs." Local producers did not need a second invitation to do just that, and in less than two weeks, the Chinese thermal coal futures have soared by over 16% to an all time high, spiking above 1,500 yuan per ton overnight, where the jump triggered even more stops ensuring that the move higher would continue. The move in Chinese coal prices, seen in its long-term context, has been nothing short of staggering. But while we can certainly admire the view from up there, that doubling in coal prices in just the past month is terrible news for Beijing which is under increasing pressure to cut rates or ortherwise ease financial conditions to contain - or "ringfence" in the parlance of our times - the "disaster" taking place in the Chinese bond market, the commodity price inflation means Xi's hands may be tied for one simple reason. Historically, Chinese coal prices - due to their core role as the anchor of China's energy-intensive economy - have been the asset the most closely has correlated with Chinese wholesale, or factory gate inflation, also known as Producer Prices. And while we wait to get the latest Chinese CPI and PPI print this week, we can already predict what it will be either next month or the month after. While coal prices were relatively contained one month ago, they have since then exploded. And if the historical correlation between Coal prices and PPI holds, were may be soon looking at a tripling of China's PPI, which from 9.5% Y/Y in August, is about to soar to 30% or more. Needless to say, if Chinese PPI does hit 30%+, even if CPI somehow stay in the single digits, the results would be catastrophic: profit margins would collapse, the plunge in already thin cash flows would lead to even more defaults and supply chain bottlenecks, even as the scramble to obtain commodities "at any price" keeps pushing costs - and PPI - even higher. Meanwhile, if producers do try to pass on some of the costs and CPI spikes (the gap between CPI and PPI was already record wide before the recent surge in coal prices). ... then Beijing will have social unrest on its hands. And all this is happening as China's property sector desperately needs a massive liquidity infusion which is - you guessed it - inflationary. And while China may be facing its first "galloping inflation" PPI print, it's only downhill from there, because as Citigroup wrote over the weekend, power cuts (with over 20 provinces, making up >2/3 of China’s GDP, have rolled out electricity-rationing measures since August) and contractionary PMI "seem to suggest China could enter into at least a short period of stagflation." Some more details from Citi on the recent blackouts: The three NE provinces were hardest hit, with power cuts from factories to homes. Costal manufacturing and export hubs like Guangdong, Jiangsu and Zhejiang were also seriously impacted. The outages are attributable to: 1. Electricity supply shortage. Thermal power (73% of total power production in 21H1) was limited by the low supply and surging prices of coal. China’s coal industry just emerged out of a prolonged de-capacity and is subject to tighter safety regulations. The geopolitical tensions (e.g., between China-Australia) and the COVID disruptions (e.g., in Mongolia) affected coal imports. Coal inventories in key coal-handling ports like Qinhuangdao are now around the new lows since the supply-side reform. 2. Export-led industrial boom. China’s uneven recovery, with electricity-consuming industrials (67% of total power consumption in 2020) outpacing services (16%), pushed up the power demand. 3. “Dual energy control”. To peak carbon emissions by 2030, the NDRC added more effective incentive measures for the “dual control of energy consumption and intensity” – for example, missing the targets may lead to delays or suspensions in the NDRC’s approvals of new energy-intensive projects for localities. Such measurable KPIs appear even more important amid the ongoing reshuffle of local officials ahead of the 20th Party Congress (in 22H2). China aimed to cut energy intensity by 13.5% during 2021-25 and by 3% in 2021. Total energy consumption growth is capped at 2.9% for 2021, which would require a more aggressive intensity reduction by 5.3%. The barometer released by the NDRC on August 17, showing 19 provinces lagging behind, further served as a wake-up call for local governments in achieving their “dual control” targets. This led to a series of factory shutdowns and production cuts in energy-intensive and high-emissions sectors. Other than executive orders and window guidance, the cut of electricity supply has been used by some as a policy tool. It’s exerting material impacts on sectors like steel, non-ferrous metals, cement, glass, coking, chemicals, industrial silicon, paper making and electroplating, among others. What are the implications? As noted above, Citi believes that "China seems to be entering into at least a short period of “stagflation”: 1. PPI inflation to remain elevated. The supply disruptions in the peak season should outweigh the demand weakness induced by the property down-cycle in the near term, keeping energy and industrial prices up. Citi expects PPI inflation to stay above 9% toward the year-end; we expect it to more than double from 9% in coming months, leading to catastrophic results for profit margins. 2. Inflation divergence to deepen. Power rationing and production cuts may drive up consumer prices more directly than the market-based pass-through from PPI shocks. However, lingering public health risks still hold back the recovery of services. Recent regulatory actions may also reduce household expenses on education, healthcare and other services. The room for pork price declines has narrowed, but the down-cycle hasn’t bottomed yet. These would help keep CPI muted. The enduring PPI-CPI divergence would squeeze the profit margin of mid/downstream sectors, especially SMEs. 3. China as an exporter of inflation. China’s environmental initiatives can be inflationary for the world over the medium term. The tight supply of industrial products would prompt the government to prioritize domestic demand over exports by, for example, cutting export tax rebates (already done for steel). The impact of disruptions with manufacturers/suppliers/assemblers would ripple through global supply chains (think electroplating for electronics as an example). As a result of the above, Citi warns that China's growth risks tilted toward downside; the bank recently downgraded its growth forecasts to 4.9% (vs 6% previously) for 21 Q3 and 4.5% (vs 5.1%) for 21 Q4 earlier, but it did not anticipate the abrupt widespread power-related production cuts. Some high-frequency activity indicators (e.g., daily crude steel outputs) have weakened quickly since. And the pièce de résistance, Beijing is now trapped: if it eases, inflation - already at nosebleed levels - will soar further crushing margins and sparking a deep stagflationary recession; if it does not ease, the property market - already imploding - will crater. Tyler Durden Mon, 10/11/2021 - 14:25.....»»

Category: dealsSource: nytOct 11th, 2021

In Deep Ship: What"s Really Driving The Supply-Chain Crisis

In Deep Ship: What's Really Driving The Supply-Chain Crisis By Michael Every and Matteo Iagatti of Rabobank Summary It is impossible to ignore the current shipping crisis and its impact on global supply chains  A common view is that this is all the result of Covid-19. Yet while Covid has played a key role, it is only part of a far larger interconnected set of problems This report examines current shipping market dynamics; overlooked “Too Big to Sail” structural issues; a brewing political tsunami as a backlash; possible Cold War icebergs ahead; and the ‘ship of things to come’ if maritime past is a guide to maritime future  The central argument is that while central banks and governments both insist inflation is transitory and will fall once supply-chain bottlenecks are resolved, shipping dynamics suggest they are closer to becoming systemically entrenched Moreover, both historical and current trends towards addressing such problems suggest potential global market disruptions at least equal to the shocks we have already experienced. Many ports will get caught in this storm, if so Ready to ship off? It is impossible to ignore the current shipping crisis and its impact on global supply chains and economies. Businesses face huge headaches as supply dries up. Consumers see bare shelves and rising prices. Governments have no concrete solutions – save the army? Economists have to discuss the physical economy rather than a model. Central banks still assume this will all resolve itself. And shippers make massive profits. The giant Ever Given, which blocked the Suez Canal for six days in March 2021, is emblematic of these problems, but they run far deeper. This report will explore the shipping issue coast-to-coast, and past-to-present in six ‘containers’: “Are you shipping me?”, a deep-dive into market dynamics and supply-demand causes of soaring shipping prices; “To Big to Sail”, a key structural issue driving things; “Tsunami of politics” of the looming backlash to what is happening; “Cold War icebergs” of fat geopolitical tail risks; “Ship of things to come?”, asking if the maritime past is a potential guide to maritime future; and “Wait and sea?”, a strategic overview and conclusion. Are You Shipping Me? Since 2020, global shipping has been frenetic, with equally frenetic shipping rates (figure 2); difficulties for both businesses and consumers; and container-carrier profits. Is Covid-19 driving these developments, or are there other structural and cyclical factors at play? Let’s take stock. One root of the problem… In 2020, COVID-19 become a global pandemic, and lockdowns ensued: factories, restaurants, and shops all closed, bringing global supply chain almost to a halt. In this context, container carriers had no visibility on future demand and did the only reasonable thing: cut capacity. There is no economic sense in moving half-empty ships across the globe; it is costly, especially for a sector operated on tiny margins for a very long time. The consequence was widespread vessel cancellations, which soared in the first months of 2020 (figure 3). Progressively, more trade lines and ports were involved as containment measures were enacted globally. By H2-2020, virus containment measures were over in China, and many other nations eased them too. Shipping cancellations did not stop, however, just continuing at a slower pace. Indeed, capacity cuts have plagued supply-chains in 2021. Excluding the January-February peaks, from March to September 2021, an average of 9.2 vessels per week were cancelled, four vessels per week more than the previous off-peak period of July to December 2020 (figure 3). Cumulative cancellations (figure 4) underline the problems. Transpacific (e.g., China-US) and Asia-Northern Europe lines saw the largest capacity cuts, but Transatlantic and Mediterranean-North America vessels also reached historic levels of cancellations. Transpacific and Asia-Europe lines are the backbone of global trade, each representing 40% of the total container trade. More than 3 million TEUs (Twenty-foot Equivalent Units, a standard cargo measure) are moved on Transpacific and Asia-Europe lines in total per month. Due to cancellations, more than 10% of that capacity was lost in early 2020. In such a context, it was only normal to expect a rise in container rates. Over January-December 2020 the Global Baltic index (the world reference for box prices) increased by 115% from $1,460 to $3,140/TEU. However, as figure 2 shows, things then changed dramatically in 2021 for a variety of reasons. As can be seen (figure 5), cancellations alone cannot explain the price surge seen in the Baltic Dry Index -- the leading international Freight Rate Index, providing market rates for 12 global trade lines-- and on key global shipping routes (figure 6). So what did? We have instead identified five key themes that have pushed up shipping costs, which we will explore in turn: Suez – and what happened there; Sickness – or Covid-19 (again); Structure – of the shipping market; Stimulus – most so in the US; and “Stuck” – as in logistical congestion. Suez On March 23rd 2021, a 20,000TEU giant vessel, the Ever Given, owned by the Taiwanese carrier Evergreen, was forced by strong winds to park sideways in the Suez Canal, ultimately obstructing it. For the following six days, one of the fundamental arteries of trade between Europe, the Gulf, East Africa, the Indian Ocean, and South East Asia was closed for business. While the world realized how fragile globalized supply chains are, carriers and shippers were counting the costs. 370 ships could not pass the Canal, with cargoes worth around $9.5bn. Every conceivable good was on those ships. The result was more unforeseen delays, more congestions and, of course, more upward pressure on container rates. Sickness New COVID-19 Delta variant outbreaks in 20201 forced the closure of major Chinese ports such as Ningbo and Yantian causing delays and congestion that reverberated both in the region and globally. Vietnamese ports also suffered similar incidents. These closures, while not decisive blows, contributed to taking shipping capacity off the global grid, hindering the recovery trend. They were also signals of how thin the ice is that global supply chain are walking on. Indeed, Chinese and South-east Asian ports are still suffering the consequences of those earlier closures, with record queues of ships waiting to unload. Structure When external shocks cause price spikes it is always wise to look at structure of the sector in which disruption caused the price spike. This exercise provides precious hints on what the “descent” from the spike might look like. Crucially, in the shipping sector, consolidation and concentration has achieved levels that few other sectors of the economy reach. In the last five years, carriers controlling 80% of global capacity became more concentrated, with fewer operators of even larger size (figure 7). However, this is just the most obvious piece of the puzzle. In our opinion, the real change started in 2017, when the three main container alliances (2M, THE, and Ocean) were born. This changed horizontal cooperation between market leaders in shipping. The three do not fix prices, but via their networks capacity is shared and planned jointly, fully exploiting economies of scale that are decisive to making a capital-intensive business profitable and efficient. Unit margins can stay low as long as you move huge volume with high precision, and at the lowest cost possible. To be able to move the huge volumes required by a globalized and increasingly e-commerce economy at the levels of efficiency and speed demanded by operators up and down supply chains, there was little other options than to cooperate and keep goods flowing for the lowest cost possible at the highest speed possible. A tight discipline of cost was imposed on carriers, who also had to get bigger. This strategy more than paid off in the Covid crisis, when shippers demonstrated clear minds, efficiency in implementing capacity control, and a key understanding of the elements they could use to their advantage: in other words – how capitalism actually works. Carriers did not decide on the lockdowns or port closures; but they exploited their position in the global market when the pandemic erupted. In a recent report, Peter Sands from BIMCO (the Baltic and International Maritime Council) put it as follows: “Years of low freight rates resulting in rigorous cost-cutting by carriers have left them in a great position to maximise profits now that the market has turned.” Crucially, this market structure is here to stay - for now. It is a component of the global system. Carriers will continue to exert pressure and find ways to make profit but, most importantly, they will make more than sure that, this time, it is not only them that end up paying the costs of rebalancing within the global system. In short, the current market allows carriers to make historic levels of profits. However, in our view this is not the end of the story – as shall be shown later. Stimulus 2020 and 2021 saw unprecedented economic shocks from Covid-19, as well as unprecedented economic stimulus from some governments. In particular, the US government sent out direct stimulus cheques to taxpayers. With few services to spend the money on, it was instead centred on goods. Hence, consumer demand for some items is red-hot (figures 8-10). The consequences of this surge in buying on top of a workforce still partly in rolling lockdowns, and against a backlog of infrastructure decades in the making, was obvious: logistical gridlock. Moreover, with the US importing high volumes, and not exporting to match, and its own internal logistics log-jammed, there has been a build-up of shipping containers inside the US, and a shortage elsewhere. Shippers are, in some cases, even dropping their cargo and returning to Asia empty: the same has been reported in Australia. Against this backdrop, the US is perhaps close to introducing further major fiscal stimulus, with little of this able to address near-term infrastructure/logistical shortfalls. Needless to say, the impact on shipping, if such stimulus is passed, could be enormous. As such, while central banks and governments still insist that inflation is transitory, supply-chain dynamics suggest it is in fact closer to becoming systemically entrenched. Stuck In normal times, a surge in consumer spending would be a bonanza for everyone: raw material producers, manufacturers, carriers, shippers, and retailers alike. In Covid times, this is all a death-blow to global supply chains. Due to misplaced global capacity, high export volumes cannot be moved fast enough, intermediate goods cannot reach processors in time, and everybody is fighting to get a container spot on the ships available. Ports cannot handle the throughput given the backlog of containers that are still waiting to be shipped inland or loaded on a delayed boat. It is not by chance that congestion hit record peaks at the same time in Los Angeles – Long beach (LALB), and in the main ports in China, the two main poles of transpacific trade. Clearly, LALB cannot handle the surge in imports, the arrival queue keeps on growing by the day (figure 11). There are now plans to shift to working 24/7. However, critics note that all this would do is to shift containers from ships to clog other already backlogged areas of the port, potentially reducing efficiency even further. Meanwhile, in Shanghai and Ningbo there were also 154 ships waiting to unload at time of writing. The power-cuts seeing Chinese factories only operating 3-4 day weeks in many locations suggest a slow-down in the pace of goods accumulating at ports, but also imply disruption, shortages, and delays in loading, still making problems worse overall. Imagine large-scale US stimulus on top of a drop in supply! Overall, “endemic congestion” is the perfect definition for the state of the global shipping market. It is the results of many factors: vessels cancellations and capacity control; Covid; bursts of demand in some trade lines; imbalances in container distribution; regular disruption in key arteries and ports; a backlog and increasing volumes cannot be dealt with at the same time, all creating an exponentially amplifying effect. The epicenter is in the Pacific, but the problem is global. At present 10% of global container capacity is waiting to be unloaded on ship at the anchor outside some port. Solutions need to be found quickly – but can they be? The Transpacific situation is particularly delicate, stemming from a high number of cancellations, ongoing disruption, and the highest demand surge in the global economy. However, this perfect recipe for a disaster is also affecting Asia–Europe lines where shipping rates hikes also do not show any signs of slowing down. …and unstuck? The shipping business would logically seem best-placed to get out of this situation by increasing vessel capacity. Indeed, orders of new ships spiked in 2021, and in coming years 2.5m TEUs will come on stream (figure 12). However, this will not arrive for some time, and may not sharply reduce shipping prices when it does. Indeed, the industry --which historically operates on thin margins, and has seen many boom and bust cycles—knows all too well the old Greek phrase: “98 ships, 101 cargoes, profit; 101 ships, 98 cargoes, disaster”. They will want to preserve as much of the current profitability as possible, which a concentrated ‘Big 3’ makes easier. Tellingly, a recent article stressed: “Ship-owners and financiers should avoid sinking money into new container vessels despite a global crunch because record orders have driven up prices, according to industry insiders.” True, CMA CGM just froze shipping spot rates until February 2022, joining Hapag-Lloyd. Yet in both cases the new implied benchmark is of price freezes at what were once unthinkable levels – not price falls. To conclude, shipping prices are arguably very high for structural reasons, and are likely to stay high ahead – if those structures do not change. On which, we even need to look at the structure of ships themselves. Too Big to Sail Shipping, like much else, has become much larger over the years. Small feeder ships of up to 1,000TEU are dwarfed by the largest Ultra-Large Container Vessels (ULCVs), which start from 14,501 TEUS up, and are larger than the US Navy’s aircraft carriers. Of course, there is a reason for this gigantism: economy of scale. It is a sound argument. However, the same was said in other industries where painful experience, after the fact, has shown such commercial logic is not the best template for systemic stability. In banking we are aware of the phenomenon, and danger, of “Too Big to Fail”. In shipping, ULCVs and their associated industry patterns could perhaps be seen as representing “Too Big to Sail”. After all, there are downsides to so much topside beyond the obvious incident with the Ever Given earlier in the year: ULVCs cannot fit through the Panama Canal; Not all ports can handle ULCVs; They are slow at sea; They are slow to load and unload; They require more complex cargo placement / handling; They force carriers to maximize efficiency to cover costs; They force all in-land logistics to adapt to their scale; They force a hub-and-spokes global trade model; and They are vulnerable to accident or disruption, i.e., they were designed for an entirely peaceful shipping environment at a time of rising geopolitical tensions (which we will return to later). In short, current ULCV hub-and-spokes trade models are the antithesis of a nimble, distributed, flexible, resilient system, and actually help create and exacerbate the cascading supply-chain failures we are currently experiencing. However, we do not have a global shipping regulator to order shippers to change their commercial practices! Specifically, building ULVCs takes time, and shipyard capacity is more limited. As shown, the issue is not so much a lack of ULCVs, but limited capacity from ports onwards. That means we need to expand ports, which is a far slower and more difficult process than adding new containers or ships, given the constraints of geography, and the layers of local and international planning and politics involved in such developments. There is also then a need for matching warehousing, roads, trucks, truckers, rail, and retailer warehousing, etc. As we already see today, just finding truckers is already a huge issue in many  economies. Meanwhile, any incident that impacts on a ULCV port --a Covid lockdown, a weather event, power-cuts, or a physical action-- exacerbates feedback loops of supply-chain disruption more than any one, or several, smaller ports servicing smaller feeder ships would do. So why are we not adapting? Economic thinking, partly dictated by the need to survive in a tough industry; massive sunk costs; and equally massive vested interests – which we can collectively call “Too Big to Sail”. Naturally, some parties do not wish to move to a nimbler, less concentrated, more widely-distributed, locally-produced, more resilient supply-chain system --with lower economies of scale-- while some do: and this is ultimately a political stand-off. Crucially, nobody is going to make much-needed new investments in maritime logistics until they know what the future map of global production looks like. Post-Covid, do we still make most things in China, or will it be back in the US, EU, and Japan – or India, etc.? Are we Building Back Better? Where? Resolving that will help resolve our shipping problems: but it will of course create lots of new ones while doing so. Tidal Wave of Politics Against this backdrop, is it any surprise that a tsunami of politics could soon sweep over global shipping? In July, US President Biden introduced Executive Order 14036, “Promoting Competition in the American Economy”. This puts forward initiatives for federal agencies to establish policies to address corporate consolidation and decreased competition - which will include shipping. Ironically, the US encouraged “Too Big to Sail” for decades, but real and political tides both turn. Indeed, in August a bipartisan bill was introduced in Congress --“The Ocean Shipping Reform Act of 2021”-- which proposes radical changes to: Establish reciprocal trade to promote US exports as part of the Federal Maritime Commission’s (FMC) mission; Require ocean carriers to adhere to minimum service standards that meet the public interest, reflecting best practices in the global shipping industry; Require ocean carriers or marine terminal operators to certify that any late fees --known in maritime parlance as “detention and demurrage” charges-- comply with federal regulations or face penalties; Potentially eliminate “demurrage” charges for importers; Prohibit ocean carriers from declining opportunities for US exports unreasonably, as determined by the FMC in new required rulemaking; Require ocean common carriers to report to the FMC each calendar quarter on total import/export tonnage and TEUs (loaded/empty) per vessel that makes port in the US; and Authorizes the FMC to self-initiate investigations of ocean common carrier’s business practices and apply enforcement measures, as appropriate. Promoting reciprocal US trade would either slow global trade flows dramatically and/or force more US goods production. While that would help address the global container imbalance, it would also unbalance our economic and financial architecture. Fining carriers who refuse to pick up US exports would also rock many boats. Moreover, forcing carriers to carry the cost of demurrage would change shipping market dynamics hugely. At the moment, the profits of the shipping snarl sit with carriers and ports, and the rising costs with importers: the US wants to reverse that status quo. While global carriers and US ports obviously say this bill is “doomed to fail”, and will promote a “protectionist race to the bottom”, it is bipartisan, and has been endorsed by a large number of US organisations, agricultural producers and retailers. Even smaller global players are responding similarly. For example, Thailand is considering re-launching a national shipping carrier to help support its economic growth: will others follow suite ahead? Meanwhile, shipping will also be impacted by another political decision - the planned green energy transition. The EU will tax carbon in shipping from 2023, and new vessels will need to be built. For what presumed global trade map, as we just asked? The green transition will also see a huge increase in the demand for resources such as cobalt, lithium, and rare earths. Economies that lack these, e.g., Japan and the EU, will need to import them from locations such as Africa and Australia. That will require new infrastructure, new ports, and new shipping routes – which is also geopolitical. Indeed, the US, China, the EU, UK, and Japan have all made clear that they wish to hold commanding positions in new green value chains - yet not all will be able to do so if resources are limited. Therefore, green shipping threatens to be a zero-sum game akin to the 19th century scramble for resources. As Foreign Affairs noted back in July: “Electricity is the new oil” – meant in terms of ugly power politics, not more beautiful power production. Before the green transition, energy prices are soaring (see our “Gasflation” report). On one hand, this may lift bulk shipping rates; on another, we again see the need for resilient supply chains, in which shipping plays a key role. In short, current zero-sum supply-chains snarls, already seeing a growing backlash, are soon likely to be matched by a zero-sum shift to new green industrial technologies and related raw materials. In both dimensions, shipping will become as (geo)political as it is logistical. Notably, while tides may be turning, we can’t ‘just’ reshape the global shipping system, or get from “just in time” to “just in case”, or to a more localized “just for me” just like that: it will just get messy in the process. Cold War Icebergs The US is now pushing “extreme competition” between “liberal democracy and autocracy”; China counters that US hegemony is over. For both, part of this will run through global shipping. Both giants are happy to decouple supply chains from the other where it benefits them. However, the larger geostrategic implications are even more significant. Piracy and national/imperial exclusion zones used to be maritime problems, but post-WW2, the US Navy has kept the seas safe and open to trade for all carriers equally. This duty is extremely expensive, and will get more so as new ships have to be built to replace an ageing fleet. Meanwhile, China is building its own navy at breath-taking speed, and a maritime Belt and Road (BRI). As a result, a clear shift has occurred in US maritime strategy: 2007’s “A Co-operative Strategy for 21st Century Sea Power”, stressed: “We believe that preventing wars is as important as winning wars.” 2015’s update argued: “Our responsibility to the American people dictates an efficient use of our fiscal resources.” 2020’s title was changed to “Advantage at Sea: Prevailing with Integrated All-Domain Naval Power”, and stressed: “...the rules-based international order is once again under assault. We must prepare as a unified Naval Service to ensure that we are equal to the challenge.” The US is also pressing ahead with the AUKUS defence alliance and the ‘Quad’ of Japan, India, and Australia to maintain naval superiority in the Indo-Pacific. This is generating geopolitical frictions, and fears of further escalation of maritime clashes in the region. The Quad has also agreed to key tech and supply-chain cooperation, with Australia a key part of a new green minerals strategy – a race in which China is still well ahead, and the EU lags. Should any kind of major incident occur, shipping costs would escalate enormously, as can easily be seen in the case of US-UK shipping from 1887-1939: this leaped 1,600% during WW1, and these shipping data stopped entirely in September 1939 due to WW2. Crucially, US naval strategy is rooted in the post-WW2 power structure in which it benefitted from such control commercially. That architecture is crumbling - and there is a matching US consensus to shift towards “America First”, or “Made in America”. The thought progression from here is surely: “Why are we paying to protect shipping from China, or economies that do not support us against China?” In short, the strategic and financial logic is: surrender control of the seas, or ensure commercial gains from it. There are enormous implications for shipping if such a shift in thinking were to occur - and such discussions are already taking place. July 2020’s “Hidden Harbours: China’s State-backed Shipping Industry” from the Center for Strategic and International Studies argued: “The time is long overdue for the US to reinvigorate its maritime industries and challenge the Chinese in the same game by using the very same techniques the Chinese have used to gain dominance in the global maritime industry. The private-sector maritime industry cannot do this alone—the US maritime industry simply cannot compete against the power of the Chinese state. The US and allied governments must bring to bear substantial and sustained political action, policies, and financial support. To do anything less is to cede control of the world’s maritime industry and global supply chains to China, and perhaps to force the US and its allies to enter their own ‘century of shame.’” Meanwhile, stories link ports and shipping to national security (see here and here), underlining logistics are no longer seen as purely commercial areas, but rather fall within the “grey zone” between war and peace – as was the case pre-WW2. This again has major implications for the shipping business. Expect that trend to continue ahead if the maritime past as guide, as we shall now explore. The Ship of Things to Come? US maritime history in particular holds some clear lessons for today’s shipping world if looked at carefully. First, the importance of the sea to what we now think of as a land-based US: the US merchant marine helped it win independence from the powerful naval forces of the British, and the first piece of legislation Congress passed in 1789 was a 10% tariff on British imports, both to build US industry and merchant shipping. Indeed, the underlying message of US maritime history is that the US is a major commercial force at sea – but only when it sees this as a national-security goal. Following independence, US commercial shipping and industry surged in tandem, with an understandable dip only due to war with the British in 1812. The gradual normalisation of maritime trade with the UK after that saw a gradual decline in the share of trade US shipping carried, which accelerated with the end of steamship subsidies --which the British maintained-- and the US Civil War. By the start of the 20th century, W. L. Marvin was arguing: “A nation which is reaching out for the commercial mastery of the world cannot long suffer nine-tenths of its ocean-carrying to be monopolized by its foreign rivals.” Yet 1915 saw the welfare-focused US Seaman’s Act passed and US flags move to Panama, where costs were lower. However, WW1 saw US shipping surge, and the Jones Act in 1920 reaffirmed ‘cabotage’ – only US flagged and crewed vessels can trade cargo between US ports. The 1930s saw global trade and the US maritime marine dwindle again – until 1936, when the Federal Maritime Commission was set up "to promote the commerce of the US, and to aid in the national defense." WW2 then saw US mass production of Liberty Ships account for over a third of global merchant shipping – and then post-1945, this lead slipped away again, and the US merchant marine now stands at around just 0.4% of the world fleet. Indeed, in 2020, US sealift capability was reported short on personnel, hulls, and strategy such that the commercial fleet would be unlikely to meet the Pentagon’s needs for a large-scale troop build-up overseas. As we see, the US has been here several times before. If the past is any guide for the future response, this suggests the following US actions could be seen ahead: Use its market size to force shippers to change pricing – which may already be happening; Raise tariffs again (on green grounds?); Refuse to take goods from some foreign ships or ports; Force vessels to re-flag in the US, at higher cost; Build a rival to China’s marine BRI with allies; Massive ship-building, for the 3rd time in the last century; Charter US private firms to bring in green materials; or The US Navy stops protecting some sea lanes/carriers, or forces the costs of their patrols onto others. It goes without saying that any of these steps would have enormous implications for global shipping and the global economy – and yet most of them are compatible with both the strategic military/commercial logic previously underlined, as well as the lessons of history. Wait and Sea? We summarize what we have shown in the key points below: Markets For markets, there are obvious implications for inflation. How can it stay low if imported prices stay high? How will central banks respond? Rate hikes won’t help. Neither will loose monetary policy – and less it is directed to a directly-related government response on supply chains and logistics. This suggests greater impetus for a shift to more localised production on cost grounds, at least at the lower end of the value chain, if not the more-desirable higher end. Yet once this wave starts to build, it may be hard to stop. Look at EU plans for strategic autonomy in semiconductors, for example, which are echoed in the US, China, and Japan. For FX, the countries that ride that wave best will float; the ones that don’t will sink. Helicopter view of ships Clearly, shipping will continue to boom. There are huge opportunities in capex on ships, ports, logistics, and infrastructure ahead – as well as in new production and supply chains. Yet one first needs to be sure what, or whose, map of production will be used for them! As the industry sits and waits for the wind and tide to change, logically one wants to position oneself best for what may be coming next. That implies global consolidation and/or vertical integration: Large shippers looking at smaller shippers to snuff out alternative routes and capacity; shippers looking at ports; ports looking at shippers; giant retailers/producers looking at shippers; importers banding together for negotiating power in ultra-tight markets. Of course, nationally, governments are looking at shippers, or at starting new carriers. If this is to be a realpolitik power struggle for who rules the waves --“Too Big to Sail”, or a new more national/resilient map of production-- then having greater scale now increases your fire-power. Of course, it also makes you a larger target for others. Let’s presume current trends continue. Could we even end up with a return to older patterns of production, e.g., where oil used to be produced by company X, refined in its facilities, shipped on its vessels, to its de facto ports, and on to its retail distribution network. Might we even see the same for consumer goods? That is the logic of globalisation and geopolitics, as well as the accumulation of capital. However, if history is a guide, and (geo)politics is a tsunami, things will look very different on both the surface and at the deepest depths of the shipping industry and the global economy. Much we take as normal today could become flotsam and jetsam. To conclude, who benefits from the huge profits of the current shipping snarl, and who will pay the costs, is ultimately a (geo)political issue, not a market one. Many ports are likely going to be caught up in that storm. Tyler Durden Sun, 10/03/2021 - 12:15.....»»

Category: blogSource: zerohedgeOct 3rd, 2021

Financiers With US$29 Trillion Ask 1600 Companies For Science-Based Targets Ahead Of COP26

220 global financial institutions holding US$29.3 trillion in assets call on world’s highest impact companies to urgently set science-based emissions reduction targets in line with 1.5°C warming scenarios;1 Q2 2021 hedge fund letters, conferences and more Number of investors and lenders writing to corporate CEOs grows 60% year on year, targeting companies responsible for more emissions than the EU and US combined;  Boeing, Alaska Air, Fedex and Catalyst Paper Corporationamong high-emitting companies specifically requested; Coordinated by non-profit CDP, the 2021 SBT Campaign is […] 220 global financial institutions holding US$29.3 trillion in assets call on world’s highest impact companies to urgently set science-based emissions reduction targets in line with 1.5°C warming scenarios;1 if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get Our Activist Investing Case Study! Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below! (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more Number of investors and lenders writing to corporate CEOs grows 60% year on year, targeting companies responsible for more emissions than the EU and US combined;  Boeing, Alaska Air, Fedex and Catalyst Paper Corporationamong high-emitting companies specifically requested; Coordinated by non-profit CDP, the 2021 SBT Campaign is the world’s largest investor engagement campaign specifically requesting companies to set science-based targets through the SBTi2; Following last year’s campaign, over 154 new companies with emissions equal to Germany joined the Science Based Targets initiative (SBTi) - 8% of all those targeted by the campaign. Companies with science-based targets in place have typically cut emissions by 6.4% per year, well above the average rate needed for 1.5°C alignment Financial Institutions Are Calling On Businesses To Set Science-Based Targets September 28, 2021 (New York): Financial institutions holding US$29.3 trillion in assets are today calling on the world’s most impactful businesses to set science-based emissions reduction targets in line with 1.5°C warming scenarios, ahead of COP26 in November.3 The request is signed by 220 financial institutions across 26 countries, and whose collective assets are worth more than the GDP of the U.S., China ore the entire EU.4 It represents significant growth in support by 60% on last year, with an increase of 51% in assets behind the call to action. The group includes some of North America’s biggest investors and lenders including Manulife Investment Management, Neuberger Berman, Lazard Asset Management, Wespath Benefits and Investments and Caisse de dépôt et placement du Québec. They are pressing 433 North American companies (361 U.S and 72 Canadian companies) to set emissions reduction targets through the Science Based Targets initiative to ensure that corporate ambition is independently verified against the de-facto industry standard for robust and credible climate targets. From July 2022, these must be aligned with a 1.5°C pathway to be approved. The 2021 CDP Science-Based Targets campaign is coordinated by the non-profit CDP, which runs the world’s largest environmental disclosure platform. Joining the financial institutions in asking for SBTs this year are 26 CDP supply chain members - large corporate buyers using CDP to green their supply chain – including L’Oréal, Renault Group, Bayer, AstraZeneca and HP Inc, with US$500 billion in annual procurement. CDP sent the letter to over 1,600 companies worldwide, including Anhui Conch Cement, China’s biggest cement manufacturer, Hyundai Motor Company, Duke Energy, Associated British Foods, Nippon Steel, Tata Steel, Lufthansa and Samsung.  In North America, Boeing Company, Alaska Air Group, FedEx Corporation, Caterpillar inc. and Catalyst Paper Corporation were among the companies sent letters. The businesses targeted have a market capitalization of over US$41 trillion, make up 36% of the entire MSCI World Index, and account for 11.9 million tonnes of emissions (scope 1 and scope 2), equivalent to more than the annual total of the U.S. and European Union combined.5 Over 20% of companies by global market capitalization are already part of the SBTi.6 Adaptation To Climate Change Are Critical To Corporate Success Sophia Cheng, Chief Investment Officer at Cathay Financial Holdings, said:  “Cathay FHC has participated in CDP Non-Disclosure Campaign for four years and we believe timely transition and adaptation to climate change are critical to corporate success in the low-carbon future. SBT is a valuable scientific tool well received by the international community and offers a useful evaluation framework for corporates planning toward net zero emissions.” Barnaby Wiener, Head of sustainability and Stewardship at MFS Investment Management, commented:  “Climate change is creating risks and opportunities for all businesses. In order to effectively respond to the climate challenge companies must have a plan and act. As long-term investors seeking to allocate capital responsibly, we expect our portfolio companies to develop, commit to and execute on science-based emissions reduction plans aligned with the Paris Agreement. The CDP Science-Based Targets Campaign is well aligned with our engagement priorities and we believe a collective voice carries further. For MFS it is an easy decision to participate.” Last year’s CDP Science Based Targets campaign contributed to strong momentum of the number of companies joining the SBTi. 154 companies, with emissions approximately equivalent to Germany’s annual total and a market capitalization of US$5.2 trillion, joined since this time last year. It represents 8.1% of the companies targeted in this campaign last year. 56% of companies asked by CDP reported that the campaign had a direct influence over their decision, while 96% reported that general investor pressure led to them setting a target.7 The campaign also shows the major role played by European financial institutions in corporate engagement on climate issues. 75% of all investors and lenders signing the letter are based in Europe (including the UK), with 79% of the total assets. Asset managers and pension funds are the most supportive of the campaign, making up nearly 9 out of 10 organizations. Achieving Net Zero By 2050 Laurent Babikian, Joint Global Director Capital Markets at CDP, said:  “2021 has been a year when global financial institutions have committed en masse to achieve net zero by 2050. But these goals are impossible to achieve without the companies they lend to and invest in having robust science-based targets that drive rapid decarbonization in the entire value chain in line with a maximum of 1.5°C of global warming. It is that simple, and when so many investors and lenders are collectively saying the same thing, companies must act or risk seeing their cost of capital rise. Not having an SBT raises a red flag that they are failing to manage climate risk. Ahead of COP26, we must see greater ambition from the companies accountable for the bulk of global emissions if we are to achieve a net-zero emissions economy, and mitigate the most serious impacts of climate change, which have been all too visible in 2021 so far.” Globally, over 1775 companies are already part of the SBTi, among which over 550 have approved targets in line with 1.5°C. Analysis has shown that the typical company with a target has cut emissions by 6.4% per year – well above the 4.2% linear reduction rate required to meet the Paris agreement’s 1.5°C goal. Alberto Carrillo Pineda, Managing Director and Co-Founder of the Science Based Targets initiative, said:  “Money talks and this call from global financiers is loud and clear. A decarbonised business model is the only sensible business choice for a climate safe and prosperous economy. The call for rapid decarbonisation is clear, not only from the scientific community, but also, from the financial community. We are calling now on all companies to set science-based decarbonisation targets and for financial institutions to build on the leadership shown in these campaign and to also set science-based climate targets for their investment and lending portfolios. This is essential if we are to halve emissions by 2030 and achieve net-zero before 2050 – and vital for the future of humankind.” Over the last two decades, CDP has created a system that has resulted in unparalleled engagement on environmental issues worldwide with investors and businesses alike. This campaign combines CDP’s track record, and expertise as a founding partner of the SBTi, to use investor authority to take disclosure and carbon mitigation further. While companies can set science-based targets at any point throughout the year, CDP will be engaging these companies to join the SBTi before September 2022, when the impact of this campaign will be evaluated. About CDP CDP is a global non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions. Founded in 2000 and working with more than 590 investors with over $110 trillion in assets, CDP pioneered using capital markets and corporate procurement to motivate companies to disclose their environmental impacts, and to reduce greenhouse gas emissions, safeguard water resources and protect forests. Over 10,000 organizations around the world disclosed data through CDP in 2020, including more than 9,600 companies, worth over 50% of global market capitalization, and over 940 cities, states and regions, representing a combined population of over 2.6 billion. Fully TCFD aligned, CDP holds the largest environmental database in the world, and CDP scores are widely used to drive investment and procurement decisions towards a zero carbon, sustainable and resilient economy. CDP is a founding member of the Science Based Targets initiative, We Mean Business Coalition, The Investor Agenda and the Net Zero Asset Managers initiative. Visit cdp.net or follow us @CDP to find out more. 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Category: blogSource: valuewalkSep 28th, 2021

PPG to Boost Waterborne Coatings Production With $10M Investment

PPG's $10-million investment in Germany will bolster its capability to produce waterborne basecoats to cater to automakers' rising demand for sustainable materials. PPG Industries, Inc. PPG recently announced its decision to invest more than $10 million (€9 million) in its plant in Weingarten, Germany, to boost production of automotive original equipment manufacturer (OEM) coatings.The Pennsylvania-based paints giant plans to build a 10,000-square-foot extension to its existing facility in Weingarten, which will have a capacity to produce more than 5,000 metric tons of waterborne basecoats annually. The project is anticipated to conclude in the second quarter of 2022.Waterborne coatings create lower volatile organic compound (VOC) emissions and replace the solvents found in conventional basecoats with distilled water. This helps provide reduced odor and enhanced air quality in the work environment for both PPG and its customers. VOC regulations in regions like Europe and China have fueled demand for waterborne technology.The latest investment will help PPG capitalize on the revved-up demand from automakers to include more sustainable materials in their products. This vital investment aims to solidify PPG’s production capabilities in Europe and will leverage its best-in-class waterborne technology to help its customers meet their carbon-neutrality goals. In fact, the company considers Weingarten as a crucial location due to its closeness to several key German OEM customers.This project forms part of the series of investments PPG makes in its automotive OEM coatings production in Europe. It parallels the company’s recently announced investment of €3 million to expand clearcoat production at its plant in Erlenbach, Germany. These investments will aid PPG in reducing its total operational carbon footprint by more than 1,000 metric tons of CO2 equivalent per year.PPG, having a long record of supplying paints and coatings to automotive manufacturers, stated that the latest investment will bolster its capabilities to produce more environment-friendly products and ensure continued value creation for its customers.Shares of PPG have gained 10.8% in the past year compared with a 6.5% rise of the industry.Image Source: Zacks Investment ResearchThe company, in its last earnings call, stated that it expects the ongoing supply-chain crisis to continue throughout the fourth quarter of 2021, with potential additional impacts from the recent industrial production curtailments in China. Nonetheless, it anticipated these disruptions to ease modestly in overall quantity and magnitude as the quarter progresses.PPG will continue to prioritize further selling price hikes and expects price realization to offset raw material cost inflation early this year. Moreover, the recovery of the automotive OEM, aerospace and automotive refinish coatings businesses will be a key catalyst for the company’s growth in 2022.PPG Industries also expects net sales volumes to be down 8-10% year over year in the fourth quarter of 2021. The company also sees adjusted earnings for full-year 2021 at $6.67-$6.73 per share.Zacks Rank & Key PicksPPG Industries currently carries a Zacks Rank #4 (Sell).Some better-ranked stocks worth considering in the basic materials space include Albemarle Corporation ALB, Commercial Metals Company CMC and AdvanSix Inc. ASIX.Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 51.5% for 2022. The Zacks Consensus Estimate for Albemarle’s 2022 earnings has been revised 5.4% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB has rallied around 34% in a year.Commercial Metals, flaunting a Zacks Rank #1, has a projected earnings growth rate of 10.5% for the current fiscal year. The consensus estimate for Commercial Metals’ current fiscal year has been revised 6.6% upward in the past 60 days.Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 13.1%, on average. CMC has rallied around 67.6% in a year.AdvanSix has a projected earnings growth rate of 3.9% for 2022. The Zacks Consensus Estimate for AdvanSix’s 2022 earnings has been revised 2% upward in the past 60 days.AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied 102.3% in a year. It currently carries a Zacks Rank #2 (Buy). Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PPG Industries, Inc. (PPG): Free Stock Analysis Report Albemarle Corporation (ALB): Free Stock Analysis Report Commercial Metals Company (CMC): Free Stock Analysis Report AdvanSix (ASIX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 13th, 2022

Lamb Weston (LW) Gains 25% in 3 Months: Will It Continue?

Lamb Weston (LW) is benefiting from the robust demand in the food away-from-home channels. The company's capacity expansion efforts are also impressive. Lamb Weston Holdings, Inc. LW is gaining on strategic growth efforts like boosting offerings and expanding capacity. The company has been benefiting from robust demand in the food away-from-home channels. In addition, its efficient price/mix is yielding well. Thanks to such upsides, Lamb Weston’s stock has gained 25.9% in the past three months compared with the industry’s growth of 6.1%.Let’s delve deeper.Away-From-Home Demand SolidLamb Weston is gaining from strong demand for away-from-home frozen potato products. Such trends contributed to the top line in second-quarter fiscal 2022, wherein net sales amounted to $1,007 million, up 12% year over year. Volume increased 6%, driven by the ongoing recovery in demand for frozen potato products in its restaurant and foodservice channels across North America.Speaking of segments, volumes rose 4% in the Global unit, driven by solid growth in shipments to restaurant chain customers across the United States. Foodservice volumes increased 22%, driven by the solid demand at small and regional chain restaurants combined with independently owned restaurants. For fiscal 2022, management expects net sales growth to exceed its long-term goal of low to mid-single digits. Image Source: Zacks Investment Research Other DriversLamb Weston’s top line has been benefiting from a robust price/mix, as witnessed in the second quarter of fiscal 2022. In the quarter, price/mix went up 6% on the back of initial benefits from product pricing actions along with better prices charged to customers for product delivery.For the second half of fiscal 2022, the company expects net sales growth to be mainly driven by price/mix. For the fiscal third quarter, management anticipates the price mix to improve sequentially, owing to benefits from the earlier announced product pricing actions in its core segments.Lamb Weston’s sturdy balance sheet and capacity to generate cash keep it well-placed to boost production capacity and fuel long-term growth. In July 2021, the company announced the expansion plan of french fry processing capacity at its existing American Falls, ID-based facility, with an envisioned capacity to manufacture more than 350 million pounds of frozen french fries and other potato products annually.The company earlier highlighted that the construction would be finished by the middle of 2023. In March 2021, the company unveiled plans to build a french fry processing facility in Ulanqab, Inner Mongolia, China. The construction of the facility was anticipated to be concluded in the first half of fiscal 2024.Lamb Weston’s efforts to boost offerings and expand capacity enable it to effectively meet rising demand conditions for snacks and fries. Apart from this, the company is continuing with investments to boost supply-chain, commercial and information technology operations. In the fiscal second quarter, capital expenditure (including IT expenditure) amounted to $148.1 million. For fiscal 2022, the company expects $450 million cash to be used for capital expenditure (excluding buyouts).Cost HurdlesLamb Weston has been seeing escalated costs for a while. In second-quarter fiscal 2022, gross profit declined $18 million to $205.5 million, led by increased manufacturing and distribution costs on a per-pound basis. Increased costs per pound reflect double-digit cost inflation from key inputs, mainly edible oils, ingredients like grains and starches, transportation and packaging. Adverse impacts of labor shortages on production run-rates and reduced raw potato utilization rates also led to increased costs per pound.Net income and adjusted EBITDA (including unconsolidated joint ventures) are likely to be under pressure for the rest of fiscal 2022, as it continues to navigate through major inflation for key production inputs, transportation and packaging compared with the fiscal 2021 levels.Also, industry-wide operational challenges like labor shortages, upstream and downstream supply-chain disruptions might be concerning. The company also expects raw potato costs on a per-pound basis to increase through the year. Apart from this, growth in sales volumes might be hampered by the disruptions in production and logistics networks along with the impacts of COVID-19 variants on restaurant traffic and consumer demand.The aforementioned upsides are likely to help the Zacks Rank #3 (Hold) company stay afloat amid such hurdles. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Hot Consumer Staples BetsSome better-ranked stocks are Flower Foods FLO, United Natural Foods UNFI and Sanderson Farms, Inc. SAFM.Flower Foods, the producer of packaged bakery foods in the United States, currently sports a Zacks Rank #1. Shares of FLO have gained 10.9% in the past three months.The Zacks Consensus Estimate for Flower Foods’ 2022 sales suggests growth of 1.9% from the year-ago reported figure. FLO has a trailing four-quarter earnings surprise of 15.4%, on average.Sanderson Farms, the producer of fresh, frozen and minimally prepared chicken, currently sports a Zacks Rank #1. Shares of SAFM have risen 0.7% in the past three months.The Zacks Consensus Estimate for Sanderson Farms’ current financial year’s earnings per share (EPS) suggests significant growth from the year-ago reported figure. SAFM has a trailing four-quarter earnings surprise of 496.3%, on average.United Natural Foods, the leading distributor of natural, organic and specialty food and non-food products in the United States and Canada, carries a Zacks Rank #2 (Buy) at present. Shares of UNFI have moved down 1.4% in the past three months.The Zacks Consensus Estimate for United Natural Foods’ current financial year’s EPS suggests growth of 7.7% from the year-ago reported number. UNFI has a trailing four-quarter earnings surprise of 35.4%, on average. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flowers Foods, Inc. (FLO): Free Stock Analysis Report United Natural Foods, Inc. (UNFI): Free Stock Analysis Report Sanderson Farms, Inc. (SAFM): Free Stock Analysis Report Lamb Weston (LW): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 13th, 2022

Lamb Weston (LW) Q2 Earnings Top Estimates, Sales Rise Y/Y

Lamb Weston's (LW) second-quarter fiscal 2022 results reflect year-over-year sales growth on increased sales volumes and price/mix. However, earnings declined year over year. Lamb Weston Holdings, Inc. LW posted second-quarter fiscal 2022 results, with the top and the bottom line surpassing the Zacks Consensus Estimate. Sales increased year on year, while earnings reflected a decline. Quarter in DetailThe company’s bottom line came in at 50 cents per share came, which surpassed the Zacks Consensus Estimate of 33 cents. Earnings declined 24% from 66 cents reported in the prior-year quarter.Net sales amounted to $1,007 million, up 12% year on year. The top line surpassed the Zacks Consensus Estimate of $1,001.8 million. Volume and price/mix increased 6% each. Sales volumes benefited from the ongoing recovery in demand for frozen potato products in its restaurant and foodservice channels across North America. Price/mix increased on the back of initial benefits from product pricing actions along with better prices charged to customers for product delivery.Lamb Weston Price, Consensus and EPS Surprise  Lamb Weston price-consensus-eps-surprise-chart | Lamb Weston Quote Gross profit declined $18 million to $205.5 million, as gains from higher sales volumes and favorable price/mix were more than countered by increased manufacturing and distribution costs on a per-pound basis. Increased costs per pound reflects double-digit cost inflation from key inputs, mainly edible oils, ingredients like grains and starches, transportation and packaging. Adverse impacts from labor shortages on production run-rates and reduced raw potato utilization rates also led to an increase in costs per pound. Such cost increases were somewhat offset by supply chain productivity savings.SG&A expenses increased $7.2 million to $91.1 million due to higher advertising and promotion expenses, sales commissions related to higher sales volumes as well as expenses mainly associated with employee recruiting and retention. These were somewhat offset by some reduced consulting expenses andlower expenses for the company’s new enterprise resource planning system.Adjusted EBITDA (including unconsolidated joint ventures) declined $32.3 million to $180.9 million, due to lower income from operations and equity method investment earningsSegment AnalysisSales in the Global segment increased 9% to $516.7 million. Volumes rose 4% and price/mix increased 5%. Price/mix reflects gains from pricing actions, including increased prices charged for freight. Sales volumes benefited from solid growth in shipments to restaurant chain customers across the United States. Product contribution margin in the segment declined 13% to $80.9 million.Foodservice sales soared 30% to $313.9 million. Volumes and Price/mix increased 22% and 8%, respectively. Sales volumes were driven by solid demand at small and regional chain restaurants, combined with independently-owned restaurants. Shipments to non-commercial customers like lodging and hospitality, schools and universities, sports and entertainment, healthcare as well as workplace environments improved year over year, though it remained below pre-pandemic levels. Product contribution margin increased 19% to reach $104.4 million.In the Retail segment, sales inched up 1% to $142.6 million. Price/mix advanced 5% but volumes declined 4%. Price/mix mainly benefited from favorable prices in the branded portfolio, including higher prices charged for freight and better mix. Sales volume was affected by reduced shipments of private label products. This was somewhat offset by higher branded product sales volumes. Product contribution margin slumped 29% to $21.4 million.Other Financial DetailsLamb Weston ended the quarter with cash and cash equivalents of $621.9 million, long-term debt and financing obligations (excluding current portion) of $2,692.1 million and total shareholders’ equity of $365.2 million. The company generated $207.5 million as net cash from operating activities for the 26 weeks ended Nov 28, 2021. Capital expenditures (including IT expenditure) amounted to $148.1 million. For fiscal 2022, the company expects cash used for capital expenditures (excluding buyouts) to be nearly $450 million.During the second quarter, management paid out dividends worth $34.3 million and bought back shares worth $50 million, thereby returning $84.3 million to its shareholders. Lamb Weston has shares worth $344 million remaining under its updated share buyback plans.Image Source: Zacks Investment ResearchGuidanceFor fiscal 2022, management expects net sales growth to exceed its long-term goal of low-to-mid single digits. For the second half of fiscal 2022, the company expects net sales growth to be mainly driven by price/mix. It continues to reap benefits from strong demand for frozen potato products globally. That being said, growth in sales volumes might be hampered by the disruptions in production and logistics networks along with impacts from COVID-19 variants on restaurant traffic and consumer demand.Net income and adjusted EBITDA (including unconsolidated joint ventures) are likely to be under pressure for the rest of fiscal 2022, as it continues to navigate through major inflation for key production inputs, transportation and packaging when compared with fiscal 2021 levels. Also, industry-wide operational challenges like labor shortages, upstream and downstream supply chain disruptions might be a cause of concern. It also expects raw potato costs on a per pound basis to increase through the year.As a result, management anticipates fiscal 2022 gross margin in the range of 18-20% percent, down 600-700 basis points (bps) when compared with a pre-pandemic gross margin of 25%-26%. Earlier, the company had anticipated the metric to come in the range of 17- 21%, down 500- 800 bps from the pre-pandemic gross margin.Apart from these, management expects operating expenses to rise in the back half of fiscal 2022 due to continued investments in information technology. These investments are, however, likely to boost long-term growth and margin enhancement.Shares of the Zacks Rank #4 (Sell) company have declined 21% in the past six months compared with the industry’s fall of 0.8%.Hot Consumer Staples BetsSome better-ranked stocks are Flower Foods FLO, United Natural Foods UNFI and Medifast MED.Flower Foods, the producer of packaged bakery foods in the United States, currently sports a Zacks Rank #1 (Strong Buy). Shares of FLO have increased 16.4% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Flower Foods’ 2022 sales suggests growth of 1.9% from the year-ago reported figure. FLO has a trailing four-quarter earnings surprise of 15.4%, on average.United Natural Foods, the leading distributor of natural, organic and specialty food and non-food products in the United States and Canada, carries a Zacks Rank #2 (Buy) at present. Shares of UNFI have moved up 33.4% in the past six months.The Zacks Consensus Estimate for United Natural Foods’ current financial year earnings per share suggests growth of 7.7% from the year-ago reported number. UNFI has a trailing four-quarter earnings surprise of 35.4%, on average.Medifast, the manufacturer of healthy living products and other consumable health and nutritional products, currently carries a Zacks Rank of 2. Shares of MED have lost 26.6% in the past six months.The Zacks Consensus Estimate for Medifast’s2022 sales suggests growth of 10% from the year-ago reported figure. MED has a trailing four-quarter earnings surprise of 17.3%, on average. Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First To New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flowers Foods, Inc. (FLO): Free Stock Analysis Report United Natural Foods, Inc. (UNFI): Free Stock Analysis Report MEDIFAST INC (MED): Free Stock Analysis Report Lamb Weston (LW): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 6th, 2022

Best Performing ETFs of 2021

Last year was another banner year for stocks; we highlight 3 top performing ETFs 2021 was a banner year for stocks. Major indexes posted double-digit gains for the third consecutive year, thanks mainly to the ultra-accommodative monetary policy and a massive fiscal stimulus.The S&P 500 (SPY) was up 27% and posted 70 record highs during 2021. It has more than doubled since the start of 2018, its highest 3-year return since 1997-1999, just before the bursting of the internet bubble. Tech heavy Invesco QQQ ETF (QQQ) gained 26% during the year.The Breakwave Dry Bulk Shipping ETF (BDRY), the iPath Series B Carbon ETN (GRN) and the iPath Series B Bloomberg Tin Subindex Total Return ETN (JJT) were the top performing ETFs of 2021, up more than 245%, 140% and 120% respectively.Container shipping rates have surged due to supply chain disruptions around the world caused by the pandemic. The rapid spread of the Omicron variant has created more headaches for the industry. Further outbreaks are likely to worsen port congestion and delays.BDRY is the first and only freight futures exchange-traded product exclusively focusing on dry bulk shipping, which is an important part of global commodity marketThe governments around the world are focused on moving towards goal of net-zero emissions by 2050 set by the 2015 Paris agreement. In the cap-and-trade system, a government sets a limit on overall emissions which is tightened over time.Big carbon emitters need to buy these pollution permits to stay under regularity limits. GRN provides diversified exposure to global carbon markets through futures contacts.Tin, the most expensive of the major base metals, is used to produce solder that connects semiconductor chips to circuit boards.  It is also used in heat resistant plastics for homebuilding products.The demand for the metal has skyrocketed with the surge in sales of consumer electronics, and a hot housing market, while supplies are disrupted as key producers including Indonesia, Malaysia and Myanmar are struggling to prevent the spread of Covid-19. JJN tracks an index of tin futures.Please watch the short video above to learn more. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco QQQ (QQQ): ETF Research Reports SPDR S&P 500 ETF (SPY): ETF Research Reports iPath Series B Bloomberg Tin Subindex Total Return ETN (JJT): ETF Research Reports iPath Series B Carbon ETN (GRN): ETF Research Reports Breakwave Dry Bulk Shipping ETF (BDRY): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 4th, 2022

MillerKnoll, Inc. Reports Second Quarter Fiscal 2022 Results

ZEELAND, Mich., Jan. 4, 2022 /PRNewswire/ -- Strong demand drove quarterly orders of $1.2 billion; an increase of 83.9% over the prior year, up 26.4%* organically Our diversified go-to-market strategy helped drive growth in every segment Integration of the Knoll acquisition is progressing as planned; we remain confident in our ability to deliver $100 million of run rate cost synergies within two years of the closing, and now expect $120 million by the end of year three Webcast to be held Tuesday, January 4, 2022, at 5:30 PM ET Second Quarter Fiscal 2022 Financial Results (Unaudited) (Unaudited) Three Months Ended Six Months Ended (Dollars in millions, except per share data) November 27, 2021 November 28, 2020 % Chg. November 27, 2021 November 28, 2020 % Chg. Net Sales $ 1,026.3 $ 626.3 63.9 % $ 1,816.0 $ 1,253.0 44.9 % Gross Margin % 34.2 % 39.0 % N/A 34.6 % 39.4 % N/A Adjusted Gross Margin %* 34.6 % 39.0 % N/A 35.2 % 39.5 % N/A Operating Expenses $ 346.8 $ 173.2 100.2 % $ 677.1 $ 327.8 106.6 % Adjusted Operating Expenses* $ 294.4 $ 170.8 72.4 % $ 529.6 $ 326.6 62.2 % Operating Earnings (Loss) % 0.4 % 11.3 % N/A (2.7) % 13.3 % N/A Adjusted Operating Earnings %* 5.9 % 11.7 % N/A 6.0 % 13.5 % N/A Net (Loss) Earnings Attributable to MillerKnoll, Inc. $ (3.4) $ 51.3 N/A $ (64.9) $ 124.2 N/A (Loss) Earnings Per Share – Diluted $ (0.05) $ 0.87 N/A $ (0.92) $ 2.10 N/A Adjusted Earnings Per Share – Diluted* $ 0.51 $ 0.89 (42.7) % $ 1.00 $ 2.13 (53.1) % Orders $ 1,157.9 $ 629.7 83.9 % $ 2,074.4 $ 1,185.7 75.0 % Backlog $ 967.3 $ 403.4 139.8 % *Items indicated represent Non-GAAP measurements; see the reconciliations of Non-GAAP financial measures and related explanations below. To our shareholders: During the second quarter of fiscal year 2022 we reached exciting and symbolic milestones.  It was our first full quarter as MillerKnoll, our company name officially changed, and we began trading with our new stock ticker symbol, NASDAQ: MLKN. We are making excellent progress on our integration journey and remain confident that we will deliver our cost synergies target of $100 million within two years of closing. Furthermore, as our teams completed integration planning, they identified additional synergy opportunities and we now expect to increase run rate savings to $120 million by the end of year three. In bringing together the best of Herman Miller and Knoll, we've created a stronger and more resilient organization, built for long-term success. Second quarter demand shows the power of MillerKnoll and we are confident in our ability to drive continued growth and shareholder value.  Financial Results The following table highlights non-comparable items that impacted U.S. GAAP net earnings per diluted share, defined as earnings per diluted share adjusted, to exclude the impact of special charges, acquisition and integration-related expenses, expense related to debt extinguishment, and intangible asset amortization related to the Knoll acquisition. Three Months Ended Six Months Ended November 27,2021 November 28, 2020 November 27, 2021 November 28, 2020 (Loss) Earnings per Share - Diluted $ (0.05) $ 0.87 $ (0.92) $ 2.10 Non-comparable items: Add: Special charges, after tax — — — 0.01 Add: Amortization of purchased intangibles, after tax 0.16 — 0.52 — Add: Acquisition and integration charges, after tax 0.40 — 1.26 — Add: Debt extinguishment, after tax — — 0.14 — Add: Restructuring expenses, after tax — 0.02 — 0.02 Adjusted Earnings per Share - Diluted $ 0.51 $ 0.89 $ 1.00 $ 2.13 Weighted Average Shares Outstanding (to Calculate Adjusted Earnings per Share) – Diluted 75,304,752 59,267,398 70,803,483 59,043,928 Note: The adjustments above are net of tax. For the three and six months ended November 27, 2021, the tax impact of the adjustments were $0.20 and $0.51, respectively. For the three and six months ended November 28, 2020, the tax impact of the adjustments was immaterial. MillerKnoll Consolidated Results Second quarter consolidated net sales were $1.0 billion, reflecting an increase of 63.9% on a reported basis and 11.1% organically compared to prior year. Orders in the quarter of $1.2 billion were 83.9% higher than the prior year. Notably, order levels were up over prior year across all four reporting segments. On an organic basis, orders of $795.7 million reflected sequential improvement of 6.4% compared to the first quarter, and were up 26.4% over the prior year.  While order demand was strong, our ability to produce and ship orders was impacted in the near-term by continued global supply chain and labor supply disruptions. We estimate these disruptions adversely impacted net sales by approximately $50 million during the quarter. We continue to implement a range of countermeasures to combat these pressures, but expect to continue to feel their effects in the second half of this fiscal year.   Gross margin for the quarter was 480 basis points lower than the prior year, due largely to the impact of rising commodity prices, particularly steel, and other inflationary pressures including labor and transportation. The price increase we implemented in the first quarter helped mitigate some of these inflationary pressures. Additional price increases implemented in the second and third quarters are expected to help further offset these pressures.  Consolidated operating expenses for the quarter were $346.8 million, compared to $173.2 million in the prior year. Consolidated adjusted operating expenses of $294.4 million, were up $123.6 million from last year, primarily due to the inclusion of Knoll adjusted operating expenses of $99.1 million and additional variable selling expenses as a result of increased sales in the current year. We are managing operating expenses carefully and will continue to adapt based on evolving market dynamics.  Operating margin for the quarter was 0.4% compared to 11.3% during the prior year. On an adjusted basis, which excludes acquisition and integration-related charges of $57.2 million, consolidated operating margin was 5.9% compared to 11.7% in the prior year. Despite inflationary pressures, our Global Retail business delivered another strong quarter of profitability with adjusted operating margins of 11.3%. We reported a net loss per share of $0.05 for the quarter. Adjusted earnings per share were $0.51 in the quarter, compared to $0.89 in the prior year. At the end of our second quarter, our liquidity position reflected cash on hand and availability on our revolving credit facility totaling $573.8 million. Using the Power of MillerKnoll and Delivering Cost Synergies We are making progress bringing Herman Miller and Knoll together, unleashing the power of our combined brands and delivering cost synergies. At the close of the second quarter, we had implemented $43 million in run rate savings. This meaningful progress toward our goal, and along with our robust integration roadmap, gives us confidence that we will achieve our planned cost synergies, even with inflationary and supply chain pressures.  During the quarter, we completed the work behind creating our new MillerKnoll organizational structure. This involved selecting talent and integrating the two teams into a new structure to execute our strategies and drive the business forward. Our new structure ensures we are capturing operational efficiencies across our collective of brands while strengthening the unique position of each individual brand to drive continued growth and create future development opportunities for our employees. The most compelling reason for creating MillerKnoll is the power of our combined portfolio and distribution network. MillerKnoll will have the largest and most capable dealer network in the world and together we will offer our customers the most comprehensive suite of products and services in the industry. Creating the MillerKnoll dealer network is our top priority and we are well on our way. Our first MillerKnoll dealer pilots in Texas and Arizona have been successful, and the learnings will inform the plan for operationalizing the network. We are on track with our plans to transition from the legacy Herman Miller and Knoll dealer networks to a unified MillerKnoll dealer network in the middle of calendar 2022.  As MillerKnoll, we also have a greater impact in our communities. November 2 was MillerKnoll's Global Day of Purpose. Our combined 11,000 employees took the day to give back to their communities in a variety of meaningful ways. It was an extraordinary culture-building moment for our organization and a testament to the good we can, and will, do together.  Driving Growth Across Geographies With a Diversified Go-To-Market Strategy That Combines Contract and Retail Retail Momentum Continues Second quarter Global Retail sales were up 18.2% and orders were up 20.6% compared to the prior year. This growth was fueled, in part, by investments we've made to drive customer acquisition and by continued assortment expansion. We are focused on improving our operational capabilities with new order management, planning and allocation, and point-of-sale systems coming later in the fiscal year.  Following the opening of our San Jose and San Francisco stores in the quarter, our total fleet of Herman Miller retail stores now stands at 13. These stores, which highlight Herman Miller's unmatched collection of ergonomic seating products, are an important entry point for customers experiencing our brands for the first time and we expect to build on our initial success with this concept through an expanded brick-and-mortar presence in 2022.   International Retail, which includes Herman Miller and HAY International, was another bright spot in the quarter, with sales up 22.1% and orders up 10.9% versus the prior year. We launched new Herman Miller websites in Germany and France, and both exceeded sales and orders expectations for the quarter. The Global Retail segment also felt the macro-economic pressures the industry is experiencing. We increased shipping fees on furniture and implemented a shipping fee on task seating. These actions helped offset freight costs without impacting demand. We also implemented targeted price increases across our retail product lineup in the second quarter to help offset inflationary pressures.   We entered the important holiday shopping season with momentum. The Retail team delivered our strongest performance during the Black Friday-Cyber Monday period. In addition, our gaming product sales were strong during this timeframe and throughout the second quarter. We will continue to drive growth in the gaming segment through new product introductions, regional expansion in Europe, and strategic partnerships. We expect the Retail business to continue delivering double-digit revenue growth and low teens operating margin in the near term. Longer term, we expect our growth investments in retail will enable further margin expansion from current levels. Growth initiatives in the second half of the fiscal year include upgrading our Herman Miller Japan and China eCommerce platforms, expanding our product assortment with a steady drumbeat of new products across our brands, including gaming, and expanding studios and stores.  Strong Demand Environment During the second quarter, we saw continued improvement in the demand environment in each of our other segments- Americas Contract, International Contract and Knoll. Americas Contract Americas Contract sales of $361.5 million increased 4.1% over the prior year. Business fundamentals in the Americas reflect continued improvement in the demand environment as organizations accelerated their return to the workplace. Order entry levels of $407.2 million were strong across all regions and sectors and were 29.3% higher than the prior year. The Americas segment felt the impact of supply chain and internal manufacturing capacity disruptions in the quarter, which impacted our ability to ship orders in the period. Our teams are actively working on initiatives to help mitigate these pressures, but we do expect them to remain a factor in our operations in the second half of the fiscal year. International Contract International Contract performance was strong across all geographies and brands in the quarter. Orders were up 30.3% and sales were up 23.3% over the prior year. Many regions met or exceeded pre-COVID performance as the global return to the workplace continued to accelerate through the quarter. Demand in Europe, including the UK, was especially strong, with orders in Europe up 42% over prior year. Cost pressure impacts have been less of a factor in the International Contract segment compared to Americas Contract segment. Global account activity drove a significant portion of the strong orders performance in this segment during the quarter, with significant wins in India and Japan. We expect this trend to continue as more customers bring employees back to the workplace in 2022. At the same time, we are seeing an increase in activity from local domestic companies which is driving new and sustained growth, especially in Australia and China.  With the global return to offices pacing ahead of the Americas, we are gaining a clearer picture of workplace design trends. More mature markets are leaning into floorplates with more collaborative spaces, while developing markets like India and China continue to favor a more traditional floorplate, albeit with a gradual shift to more collaborative spaces. HAY Contract's performance in Europe speaks to the demand for collaborative solutions in that region, with orders up 55% and sales up 48% from prior year. Knoll Knoll sales were up 5.3% and orders were up 29.6% versus the prior year. Both the Knoll workplace and residential categories grew in the quarter. Notably, Holly Hunt and Muuto both experienced record sales in the quarter. Through the pandemic, these two brands have demonstrated consistent growth across channels, including to-the-trade and consumer retail. This performance points to the power of our diversified strategy and strong business fundamentals. Applying Our Research and Firsthand Experience to Deliver Innovative Future of Work Solutions MillerKnoll is the global leader in providing adaptable solutions to create innovative, productive environments for the workplace and homes of our clients. We are sharing our firsthand experiences with hybrid workplaces and leveraging our global insight partnerships to inform the future of work.  While the world continues to grapple with the impacts of the pandemic, including new variants and regional surges in cases, leasing data indicates that companies are returning to the office. In our conversations with C-suite executives from a variety of industries, there is a strong desire among leaders to bring their teams back together for the purposes of culture building, collaboration, and problem-solving efficiency. Research also indicates that most people want the option to return to the office. According to Future Forum's consortium of companies working on the Future of Work, more than 80% of employees want access to an office, but not every day and not from 8:00 am to 5:00 pm. In fact, 76% of employees want more flexibility in where they can work, and far more, 93%, want flexibility in when they can work. Employers are recognizing their workplaces need to be reimagined as desirable and on-demand resources that are designed to meet the changed expectations of the post-pandemic workforce. We have the products, the services, and the tools to help them achieve their goals for their workplaces. Leveraging Our Competitive Advantages to Drive Growth and Create Value for Our Shareholders We believe in the power of design to solve problems. While we are facing many of the same headwinds as the rest of our industry, our people are delivering creative and sustainable solutions to overcome these challenges. We are leveraging our global distribution, production, design, and sales capabilities to combat supply chain issues, shipping delays, and inflationary pressures. We've ramped up production capacity in facilities closer to our customers and built inventory behind higher demand items. We are also leaning into the partnerships that exist across our collective of brands to increase global shipping capacity even during this period of extreme scarcity. Our pricing and discount strategies are helping to offset margin pressures – contract pricing increases began in Q1 and continued through the quarter, with Global Retail price increases to take effect in the third quarter.  We are innovating across our brands and leveraging our relationships with a global network of designers to bring new solutions such as the Knoll Iquo indoor/outdoor café chairs in partnership with Ini Archibong. Across MillerKnoll's expansive textile capability we introduced several new products this quarter, including Knoll's New Fundamentals Collection, and expanded Maharam's Textiles of the 20th Century series with the reissue of six of Alexander Girard's most enduring designs across three applications (upholstery, wallcoverings, and a hand-woven rug).  Outlook We expect sales in the third quarter of fiscal year 2022 to range between $1,010 million and $1,050 million. The mid-point of this range implies a revenue increase of 74% compared to the same quarter last fiscal year on a reported basis and 18% on an organic basis, excluding the impact of the Knoll acquisition. We anticipate earnings per share to be between $0.24 and $0.30 for the period. Our forecast for the third quarter also considers the near-term impacts of supply chain disruptions and inflationary pressures.  Designing the Future MillerKnoll is built for growth. We are powered by the most comprehensive portfolio of complementary brands in our industry. With our enhanced capabilities and the financial strength of our diversified business, we are well positioned to drive growth and increase value for all our stakeholders as we design our future as MillerKnoll.  We appreciate your continued support of our company and look forward to an exciting 2022 together.  Andi Owen Jeff Stutz President and Chief Executive Officer Chief Financial Officer Financial highlights for the three and six months ended November 27, 2021 follow: MillerKnoll, Inc. Condensed Consolidated Statements of Operations (Unaudited) (Dollars in millions, except per share and common share data) Three Months Ended Six Months Ended November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020 Net Sales $ 1,026.3 100.0 % $ 626.3 100.0 % $ 1,816.0 100.0 % $ 1,253.0 100.0 % Cost of Sales 675.7 65.8 % 382.1 61.0 % 1,187.9 65.4 % 758.8 60.6 % Gross Margin 350.6 34.2 % 244.2 39.0 % 628.1 34.6 % 494.2 39.4 % Operating Expenses 294.4 28.7 % 170.8 27.3 % 529.6 29.2 % 326.6 26.1 % Restructuring Expenses — — % 2.4 0.4 % — — % 1.2 0.1 % Acquisition and Integration Charges 52.4 5.1 % — — % 147.5 8.1 % — — % Operating Earnings (Loss)  3.8 0.4 % 71.0 11.3 % (49.0) (2.7) % 166.4 13.3 % Other Expenses, net 8.2 0.8 % 2.2 0.4 % 26.1 1.4 % 3.7 0.3 % (Loss) Earnings Before Income Taxes and Equity Income (4.4) (0.4) % 68.8 11.0 % (75.1) (4.1) % 162.7 13.0 % Income Tax (Benefit) Expense (3.4) (0.3) % 16.2 2.6 % (14.1) (0.8) % 36.9 2.9 % Equity (Loss) Income, net of tax (0.1) — % 0.2 — % — — % 0.4 — % Net (Loss) Earnings (1.1) (0.1) % 52.8 8.4 % (61.0) (3.4) % 126.2 10.1 % Net Earnings Attributable to Redeemable Noncontrolling Interests 2.3 0.2 % 1.5 0.2 % 3.9 0.2 % 2.0 0.2 % Net (Loss) Earnings Attributable to MillerKnoll, Inc. $ (3.4) (0.3) % $ 51.3 8.2 % $ (64.9) (3.6) % $ 124.2 9.9 % Amounts per Common Share Attributable to MillerKnoll, Inc. (Loss) Earnings Per Share – Basic ($0.05) $0.87 ($0.92) $2.11 Weighted Average Basic Common Shares 75,304,752 58,908,094.....»»

Category: earningsSource: benzingaJan 4th, 2022

NexTier Provides Operational Update and Guidance for the Fourth Quarter of 2021

HOUSTON, Jan. 3, 2022 /PRNewswire/ -- NexTier Oilfield Solutions Inc. (NYSE:NEX) ("NexTier" or the "Company") today provided an operational update and guidance for the fourth quarter of 2021.  Fourth Quarter 2021 Guidance & Recent Highlights Total revenue guidance of $500-510 million for Q4 2021, reflecting an increase of more than 25% compared to Q3 2021 Reported adjusted EBITDA(1) guidance of $75-80 million for Q4 2021, includes approximately $18 million in expected gain on sale of assets Averaged 30 deployed and 29 fully-utilized fleets in Q4 2021 vs. 25 deployed and 24 fully-utilized fleets in Q3 2021 Consistent with prior guidance, exited Q4 2021 with 31 deployed fleets with 1 additional staffed fleet ready for Q1 2022 deployment Management Commentary "The strong momentum we experienced when exiting the third quarter continued through year-end," said Robert Drummond, President and Chief Executive Officer of NexTier. "The expected sequential gains resulted from solid growth across the entire NexTier enterprise, enhanced by the inclusion of a full quarter of Alamo contribution versus just one month in Q3 2021. Further, market indicators suggest that the pace of market recovery is increasing and frac service supply is rapidly tightening. "We're only just beginning to see the financial benefits of our integrated completion service model, which offers our customers higher efficiency and a path to lower costs and emissions," Drummond continued. "Our integrated model will be a distinct competitive advantage for NexTier and our partners as we enter the next phase in US shale's evolution. Supply chain disruptions and the newest COVID variant will continue to pose a challenge for our operations, but we're confident we have the right team in place to minimize disruptions and any related financial impacts." "NexTier is beginning to experience the benefits from our countercyclical investment strategy, with the guidance revealing signs of strong, profitable growth as we exited 2021," said Kenny Pucheu, Executive Vice President and Chief Financial Officer of NexTier. "Despite typical holiday seasonality, our Q4 2021 guidance suggests a step change in profitability per active frac fleet relative to Q3 2021 and we anticipate further gains throughout 2022. "As an early adopter of low cost and emission technologies, NexTier is reaching the end of its two-year strategic conversion to a predominately natural gas capable fleet," Pucheu added. "These investments were funded substantially by the sale of non-core businesses and assets, allowing us to minimize new capital deployed while repositioning the company as a leader in natural gas powered frac solutions. We enter 2022 with momentum, the industry's largest natural gas capable fleet, and a supportive market backdrop." Fourth Quarter Expected One-Time Gains Adjusted EBITDA guidance of $75-80 million for the fourth quarter includes an expected $18 million in one-time gain on the sale of assets. During Q4 2021, NexTier continued down the path of divesting diesel-powered frac equipment and other non-core assets to fund conversions of equipment to be powered by natural gas.  These divestitures and resulting significant accounting gains in Q4 2021 came via previously announced equipment sales outside of the US as well as through trade-ins of excess diesel equipment in exchange for Tier 4 DGB conversions and conversion kits. These gains reflect our commitment to reallocate capital through the sale and trade in of conventional diesel equipment for conversion to dual fuel. Outlook Consistent with prior commentary, for the first quarter of 2022, NexTier expects to operate an average of 32 deployed frac fleets. The company was operating 31 fleets exiting Q4 2021 and intends to deploy one additional upgraded Tier 4 dual fuel frac fleet in Q1 2022. Sequentially, we anticipate net pricing gains in Q1 2022 and increased utilization, with the expectation that we can achieve double-digit annualized EBITDA per fleet by the end of Q1 2022. "We see a constructive demand backdrop for US onshore completion services as we begin 2022," added Robert Drummond. "Supply of frac services has tightened considerably over the past year, and NexTier is in a great position to recapture a significant portion of the pricing concessions we made to help our customers through COVID while also benefitting from value provided by its leading position of premium horsepower. We remain confident that pricing can exit 2022 up double-digits from 2021's exit. NexTier remains intently focused on Free Cash Flow ("FCF") and we anticipate being on a sustained path to significant FCF generation beginning in 2022."  Coronavirus Monitoring The Company continues our coronavirus protocols focused on compliance with regulatory requirements and the safety of our ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaJan 3rd, 2022

8 Top CEOs Give Their Predictions for the Wild Year Ahead

(To receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.) Nearly two years into the COVID-19 pandemic, business leaders are heading into 2022 facing the strong headwinds of the Omicron variant, continued pressure on supply chains, and the great resignation looming over the labor market. TIME asked top leaders… (To receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.) Nearly two years into the COVID-19 pandemic, business leaders are heading into 2022 facing the strong headwinds of the Omicron variant, continued pressure on supply chains, and the great resignation looming over the labor market. TIME asked top leaders from across the world of business to share their priorities and expectations for the year ahead. Albert Bourla, CEO of Pfizer, wants to leverage the advances his pharmaceutical company has made in fighting COVID-19 to tackle other diseases, while Rosalind “Roz” Brewer, CEO of Walgreens Boots Alliance, has made improving access to healthcare one of her goals over the next year. GoFundMe CEO Tim Cadogan says building trust will be at the heart of decision-making at the crowdfunding platform—both with workers and its wider community. [time-brightcove not-tgx=”true”] Innovation is key to Intel CEO Patrick P. Gelsinger and Forerunner Ventures founder and managing partner Kirsten Green. And Rothy’s CEO Stephen Hawthornthwaite, Albemarle CEO Kent Masters, and Gene Seroka, executive director of the Port of Los Angeles, shared their suggestions for how companies and policymakers can respond to persistent supply chains problems. Read on to see how some of the most powerful people in business envision the coming year. (These answers have been condensed and edited for clarity.) What are the biggest opportunities and challenges you expect in the year ahead? Albert Bourla, CEO of Pfizer: The scientific advancements made by Pfizer and others over the past year have brought us very powerful tools to battle the worst pandemic of our lives. But, unfortunately, we don’t see everyone using them. I am concerned about the limited infrastructure and resources in the poorest countries as they struggle to administer their supply of COVID-19 vaccines to their people. Some of these countries have asked us to pause our deliveries of doses while they work to address these issues. While I am proud of the work Pfizer has done to make vaccines available to low- and lower middle-income countries over the past year, we need to find new ways to support the World Health Organization as they work with NGOs and governments to address these infrastructure issues. Getty ImagesAlbert Bourla, CEO, Pfizer Over the next year I’d like us to help find solutions to issues like the shortage of medical professionals, vaccine hesitancy due to limited educational campaigns, lack of equipment and even roads to allow timely delivery of vaccines. Throughout every chapter of this pandemic, we have been reminded of the importance of collaboration and innovative thinking. We need to work harder than ever before to address these health inequities so that people around the globe are protected from the virus. Pat Gelsinger, CEO of Intel: Throughout the history of technology, we’ve seen the pendulum swinging between centralized and decentralized computing. And there is still a tremendous untapped opportunity in edge computing as we bring greater intelligence to devices such as sensors and cameras in everything from our cars to manufacturing to the smart grid. Edge computing will not replace cloud; we’re swinging back to where decentralized compute becomes the primary growth for new workloads because the inference and AI analysis will take place at the edge. Technology has the power to improve the lives of every person on earth and Intel plays a foundational role within. We aim to lead in the opportunity for every category in which we compete. Roz Brewer, CEO of Walgreens: The pandemic affirmed Walgreens as a trusted neighborhood health destination to help our customers and patients manage their health. We provide essential care to our communities, including administering more than 50 million COVID-19 vaccines as of early December 2021. The opportunity ahead of us at Walgreens Health—our new segment launched this past fall—is to create better outcomes for both consumers and partners, while lowering costs across the care continuum. A year from now I want to look back on this time as an inflection point and a moment in time where real, lasting change happened—that we will all have collectively banded together to get through the pandemic and at the same time delivered real change toward improving accessible and affordable healthcare. I feel inspired and hopeful that some good will come out of this very difficult time in our country and the world’s history. Jason Redmond—AFP/Getty ImagesRosalind Brewer, CEO of Walgreens, speaks in Seattle, Washington on Mar. 20, 2019. Tim Cadogan, CEO of GoFundMe: We’re going to see continued disruption in the world and the workplace in 2022—this will require more people to come together to help each other. Our opportunity is to use our voice and platform to bring more people together to help each other with all aspects of their lives. Asking for help is hard but coming together to help each other is one of the most important and rewarding things we can do in life. We are continuously improving our product to make it easier for more people to both ask for and give help, whether it’s helping an individual fulfill a dream, working on a global cause like climate change, or supporting a family during a difficult time. Kirsten Green, founder and managing partner of Forerunner Ventures: We are nearly two years into the pandemic, and it is still ongoing. We must embrace this new normal and figure out how to make that reality work for our businesses, our consumers, and our people. Thankfully, we often see innovation come out of these periods of change and fluctuation. At the same time, it’s hard to come to terms with the fact that the world has evolved, and it is still important to understand that the ‘reset’ button just got hit for a lot of people. Values, goals, and core needs are being reevaluated and reestablished, and we as a society need to figure out how to move forward during a volatile period. Gene Seroka, executive director of the Port of Los Angeles: Our industry needs to help drive the American economic recovery amid the impact of the COVID-19 pandemic. The top priority remains getting goods to American consumers and creating a more fluid supply chain. We also need to address the growing trade imbalance. Imports are at all-time highs while U.S. exports have declined nearly 40% over the past three years in Los Angeles. We have to help American manufacturers and farmers get their products to global markets. With the passage of the Infrastructure Investment and Jobs Act, our team is working to get our fair share of federal funds to accelerate projects to improve rail infrastructure, local highways and support facilities. The Port of Los Angeles is the nation’s primary trade gateway, yet east and gulf coast ports have received most of the federal funding in the past decade. The best return on port infrastructure investment is in Los Angeles, where the cargo we handle reaches every corner of the country. Kent Masters, CEO of Albemarle: Challenges will likely continue to include competition for top talent, supply chain disruptions due to possible pandemic impacts to raw material availability and logistics, and potential inflation impacts to material and freight costs, all of which we’re monitoring closely so we can respond quickly. With the global EV market growing rapidly, we have a tremendous opportunity ahead of us for years to come. Next year, we’ll advance our lithium business through new capacity ramp-ups in Chile, Australia and China, and restart the MARBL Lithium Wodgina hard rock resource in Australia to help feed our new conversion assets and meet customer needs. We’re also keenly focused on organizational goal alignment and continuous improvement to drive greater productivity through our global workforce next year. What do you expect to happen to supply chains in 2022? Gelsinger: The unprecedented global demand for semiconductors—combined with the impact of the global pandemic—has led to an industry-wide shortage, which is impacting technology providers across the industry. Intel is aggressively stepping in to address these issues and build out more capacity and supply around the globe for a more balanced and stable supply, but it will take time and strong public-private partnerships to achieve. Read more: From Cars to Toasters, America’s Semiconductor Shortage Is Wreaking Havoc on Our Lives. Can We Fix It? Brewer: We learned a lot over the past two years and companies are taking action with investments in capacity, resiliency and agility for supply chains across the world. We will continue finding creative ways to increase manufacturing and shipping capacity. Manufacturers will continue expanding capacity and increasing the diversity in their supplier base to reduce reliance of single sourcing. Companies will continue to invest to increase resiliency through expanded inventory positions, extended planning horizons and lead-times, and increased agility in manufacturing and logistics capabilities to fulfill customer needs. As the marketplace changes, we must be agile and adapt quickly as we respond to shifts in consumer behavior. Investments in technology, such as real time supply chain visibility and predictive/prescriptive analytics, will enable companies to deliver the speed and precision expected by today’s consumer. Seroka: Goods and products will get to market. The maritime logistics industry must raise the bar and make advances on service levels for both our import and export customers. Retailers will be replenishing their inventories in the second quarter of the year. And by summer, several months earlier than usual, we’ll see savvy retailers bringing in products for back to school, fall fashion and the winter holidays. Despite the challenges, retail sales reached new highs in 2021. Collectively, supply chains partners need to step up further to improve fluidity and reliability. Stephen Hawthornthwaite, CEO of Rothy’s: In 2022, pressure from consumers for transparency around manufacturing and production, coupled with pandemic learnings about existing supply chain constraints, will push businesses to condense their supply chains and bring in-house where possible. I also predict that more brands will test make-to-demand models to better weather demand volatility and avoid supply surpluses—a benefit for businesses, consumers and the planet. Nimbleness and a willingness to innovate will be crucial for brands who wish to meet the demands of a post-pandemic world. At Rothy’s, we’ve built a vertically integrated model and wholly-owned factory, enabling us to better navigate the challenges that production and logistics present and unlock the full potential of sustainability and circularity. Courtesy of Rothy’sStephen Hawthornthwaite, chairman and CEO, Rothy’s Green: The pandemic crystallized what a lot of us knew to be true, but hadn’t yet evaluated: There’s not nearly as much innovation in the supply chain as a flexible world is going to need. What we’re seeing now is a giant wake-up call to the entire commerce ecosystem. This is more than a rallying cry; it’s a mandate to reevaluate how we’re managing our production processes, and 2022 will be the start of change. Expect a massive overhaul of the system, and expect to see more investment building innovation, efficiency, and sustainability into the supply chain space. Read more: How American Shoppers Broke the Supply Chain Masters: As the pandemic continues with new variants, we expect global supply chain issues to persist in 2022. To what degree remains to be seen, but I would expect impacts to some raw materials, freight costs, and even energy costs. On a positive note, we can successfully meet our customer obligations largely because of our vertically integrated capabilities. This helps us continue to be a reliable source of lithium, as well as bromine. Worldwide logistics issues are a factor, but more marginal in the supply question when the determining factor is the ability to convert feedstock to product and bolster the supply chain. In lithium, we have active conversion facilities running at full capacity now. As we bring more capacity online (La Negra III/IV, Kemerton I/II, Silver Peak expansion, and our Tianyuan acquisition in China) while making more efficient use of our feedstocks, it will help strengthen the global supply chain. How will the labor market evolve and what changes should workers expect in the coming year? Brewer: The labor market will continue to be competitive in 2022. I often say to my team: as an employer, it’s not about the products we make, it’s not about our brand. It’s about how are we going to motivate team members to feel good about themselves, fulfilled and passionate about their work, to contribute at their highest level of performance. How do we create a culture that means Walgreens Boots Alliance is the best place to work—so our team members say, “Yes, pay me for the work that I do, but help me love my job.” In the coming year and beyond, broadly across the market, we will see that managers will continue to become even more empathetic and listen more actively to their team members as people. Workers will expect that employers and their managers accept who they are as their whole, authentic selves, both personally and professionally. Read more: The ‘Great Resignation’ Is Finally Getting Companies to Take Burnout Seriously. Is It Enough? Gelsinger: Our employees are our future and our most important asset, and we’ve already announced a significant investment in our people for next year. As I’ve said, sometimes it takes a decade to make a week of progress; sometimes a week gives you a decade of progress. As I look to 2022, navigating a company at the heart of many of the pandemic-related challenges, we must all carefully consider what shifts are underway and what changes are yet to come. It will continue to be a competitive market and I expect you’ll continue to see companies establish unique benefits and incentives to attract and retain talent. We expect the “hybrid” mode that’s developed over the past years to become the standard working model going forward. Al Drago/Bloomberg—Getty ImagesPatrick Gelsinger, chief executive officer of Intel Corp., speaks during an interview at an Economic Club of Washington event in Washington, D.C., U.S., on Dec. 9, 2021. Bourla: The past couple of years have challenged our workforce in ways that we never would have imagined. Companies have asked employees to demonstrate exceptional flexibility, commitment, courage and ingenuity over the past two years—and they have risen to the challenge. I predict that we are likely to see an increase in salaries in the coming year due to inflation—and I believe this is a good thing for workers, as it will help close the gap in income inequality. That said, financial rewards are no longer the only thing that employees expect from their employers. Increasingly, people want to work for a company with a strong culture and a defined purpose. As such, companies will need to foster and promote a culture in which employees feel respected and valued for their contributions and made to feel that they are integral to furthering the purpose of their company. Businesses that are able to create such a culture will not only be able to attract the best talent, but also maximize the engagement, creativity and productivity of their people by enabling them to bring their best selves to every challenge. Green: For many years, Forerunner has been saying, “It’s good to be a consumer. Consumers want what they want, when they want it, how they want it, and they’re getting it.” That same evolution of thought has now moved into the labor market: It’s a worker’s market, not a company’s market, and the relationship between the worker and the employer needs to evolve because of that. Workers should expect to get more flexibility, respect, benefits, and pay in some cases—but they still need to show up and deliver impact at work. It’s a two-way street, and we need to tap into a broader cultural work ethic. As a society, we need to be more holistic in our approach to meeting both company and worker needs. Read more: The Pandemic Revealed How Much We Hate Our Jobs. Now We Have a Chance to Reinvent Work Seroka: There’s a need for more truck drivers and warehouse workers in southern California. President Biden’s new Trucking Action Plan funds trucker apprentice programs and recruit U.S. military veterans. It’s an important step forward to attract, recruit and retain workers. Private industry needs to look at improved compensation and benefits for both truckers and warehouse workers. We need to bring a sense of pride and professionalism back to these jobs. On the docks, the contract between longshore workers and the employer’s association expires June 30. Both sides will be hard at work to negotiate and reach an agreement that benefits the workers and companies while keeping cargo flowing for the American economy. Courtesy Port of Los AngelesGene Seroka, executive director, Port of Los Angeles. Masters: I think there will still be a fight for talent next year. It’s a tight labor market overall and Covid-19 restrictions are a challenge in some regions. Albemarle has a really attractive growth story and profile, especially for workers interested in combatting climate change by contributing in a meaningful way to the clean energy transition. We are embracing a flexible work environment, much like other companies are doing, and upgrading some benefits to remain an employer of choice in attracting and retaining the best people on our growth journey. And, of course, we should all expect pandemic protocols to continue next year to ensure everyone’s health and safety. How do you see your role as a leader evolving over the coming year? Bourla: We are entering a golden age of scientific discovery fueled by converging advancements in biology and technology. As an industry, we must leverage these advancements to make disruptive changes in the way we discover, develop and bring new medicines to patients. Since I became CEO of Pfizer, we have been working to reimagine this process by operating as a nimbler, more science-driven organization, focused on delivering true breakthroughs for patients across our six therapeutic areas. In the past few years, we have demonstrated our ability to deliver on this promise of bringing true scientific breakthroughs through our colleagues’ tireless work in COVID-19. But there is more work to be done to address the unmet need in other disease areas—and now is the time to do it. In the year ahead, my leadership team and I will focus on leveraging these advancements in biology and technology, as well as the lessons learned from our COVID-19 vaccine development program, so that we may continue to push this scientific renaissance forward. This is critical work that we must advance for patients and their families around the world who continue to suffer from other devastating diseases without treatment options. Gelsinger: We are in the midst of a digital renaissance and experiencing the fastest pace of digital acceleration in history. We have immense opportunities ahead of us to make a lasting impact on the world through innovation and technology. Humans create technology to define what’s possible. We ask “if” something can be done, we understand “why,” then we ask “how.” In 2022, I must inspire and ensure our global team of over 110,000 executes and continues to drive forward innovation and leadership on our mission to enrich the lives of every person on earth. Brewer: Purpose is the driving force at this point in my career. I joined Walgreens Boots Alliance as CEO in March of 2021, what I saw as a rare opportunity to help end the pandemic and to help reimagine local healthcare and wellbeing for all. Seven months later, we launched the company’s new purpose, vision, values and strategic priorities. My role as CEO now and in 2022 is to lead with our company’s purpose—more joyful lives through better health—at the center of all we do for our customers, patients and team members. I’m particularly focused on affordable, accessible healthcare for all, including in traditionally medically underserved communities. Healthcare is inherently local, and all communities should have equitable access to care. John Lamparski—Getty Images for Advertising Week New YorkTim Cadogan, CEO of GoFundMe, speaks in New York City on Sept. 26, 2016. Cadogan: The last two years were dominated by a global pandemic and social and geopolitical issues that will carry over into 2022. The role of leaders in this new and uncertain environment will be to deliver value to their customers, while helping employees navigate an increasingly complex world with a completely new way of working together. Trust will be at the center of every decision we make around product development and platform policies—do the decisions we are making align with our mission to help people help each other and do they build trust with our community and our employees? Green: Everything around us is moving at an accelerated pace, and being a leader requires you to operate with a consistent set of values while still leaning into opportunity. Arguably, the pandemic has been the most disruptive time in decades—a generational disruption on par with the Depression or WWII. People’s North Stars are in the process of transforming, and leaders need to figure out what that means for their companies, their cultures, and their work processes. How does this change require leaders to shift their priorities as a business? Courtesy, Forerunner VenturesKirsten Green, founder and managing partner, Forerunner Ventures Masters: My leadership style is to make decisions through dialogue and debate. I encourage teams to be curious about other perspectives, be contrarian, actively discuss, make decisions, and act. I wasn’t sure how well we could do this from a strictly remote work approach during the pandemic, but watching our teams thrive despite the challenge changed my mind. Our people adapted quickly to move our business forward. We’ve worked so well that we’re integrating more flexibility into our work environment in 2022. With this shift to hybrid work, it will be important for all leaders, myself included, to empower employees in managing their productivity, and ensure teams stay engaged and focused on our key objectives. We’re facing rapid growth ahead, so our culture is vital to our success. I’ll continue to encourage our teams to live our values, seek diverse viewpoints, be decisive, and execute critical work to advance our strategy. Courtesy of Albemarle Kent Masters, CEO of Albemarle Seroka: Overseeing the nation’s busiest container port comes with an outsized responsibility to help our nation—not just the Port of Los Angeles—address the challenges brought about by the unprecedented surge in consumer demand. That means taking the lead on key fronts such as digital technology, policy and operational logistics. On the digital front, our industry needs to use data better to improve the reliability, predictability, and efficiency in the flow of goods. Policy work will focus on improving infrastructure investment, job training and advocating for a national export plan that supports fair trade and American jobs. Operationally, we’ll look for new ways to improve cargo velocity and efficiency......»»

Category: topSource: timeJan 2nd, 2022

Global Steel November Production Drops as Green Push Hits China

World steel production slipped 9.9% in November, dragged down by a sharp decline in output in China on Beijing's actions to curb production to combat pollution. Global crude steel production fell for the fourth consecutive month in November, pulled down by a slump in output from top producer China on Beijing’s aggressive measures to curb production to reduce pollution and weaker domestic steel demand. Production went up across India, the United States and Japan for the reported month with the United States logging the biggest gain.According to the latest World Steel Association (“WSA”) report, crude steel production for 64 reporting nations dropped 9.9% year over year to 143.3 million tons (Mt) in November. A double-digit decline in output in Asia and Oceania along with lower production in the Middle East more than offset higher production across other regions in the reported month.China Production Slumps on Decarbonization DriveCrude steel production from China fell for the fifth straight month in November on government’s actions to cut production to clean up the environment in a bid to reach its carbon neutrality goal by 2060. Weak steel demand in the construction sector, softness in domestic steel prices and power shortages also contributed to the decline.Per the WSA, production in China, which accounts for nearly half of the global steel output, tumbled 22% year over year to 69.3 Mt in November. Output is also down from 71.6 Mt in October. Production slipped 2.6% year over year to 946.4 Mt in the first eleven months of 2021. China’s monthly steel output has been declining since July after hitting a record high of 99.5 Mt in May 2021.China is aiming to keep 2021 steel output within last year’s record levels. Beijing has been pushing steel mills in the country since early July to implement output and capacity curbs to comply with the norms to cut carbon emissions. The steel sector is among the biggest sources of carbon emissions in China, accounting for roughly 15% of national carbon emissions. China has set a national goal to achieve peak carbon emissions for the steel sector by 2025.China’s steel output is expected to continue to shrink through December due to mandatory production cuts. Output is also likely to be capped by softer steel demand in the country, partly resulting from a slowdown in demand in the construction sector. However, production is likely to rebound in first-quarter 2022 as steel mills in the country complete the required curtailments for 2021.Steel demand in China has softened since the second half of 2021 due to a slowdown in the country’s economy. China's GDP expanded 4.9% year over year in the third quarter of 2021, slowing from a 7.9% growth in the second quarter, per China's National Bureau of Statistics.A slowdown in construction and manufacturing activities has led to the contraction of demand for steel in China. Manufacturing is being hurt by semiconductor shortages, supply-chain disruptions and power outages. Beijing’s move to take the heat out of its property market partly through credit tightening measures bodes ill for construction steel demand. The debt crisis at one of China top property developers, Evergrande, also increases the risk of a financial contagion in the country’s property sector. Real estate accounts for roughly 40% of China's steel consumption. A boom in the property sector played a major role in driving China's steel production last year. The WSA expects steel demand in China to contract 1% year over year in 2021 factoring in the negative trends in the country’s real estate sector.How Other Major Producers Fared in November?Among the other major Asian producers, India — the second-largest producer — saw a 2.2% rise in production to 9.8 Mt in November. Steel demand is picking up in India on a revival in economic activities post the deadly second wave. Government’s infrastructure push and focus on accelerating the rural economy augur well for steel demand in the country.Production in Japan jumped 10.7% to 8 Mt in the reported month. Output rose for the ninth consecutive month as steel makers in the country are seeing an upturn in domestic demand from the pandemic-induced lows. Higher demand and steel prices are also driving profit margins of Japanese steel makers. Crude steel output in South Korea rose 2.7% to 5.9 Mt. Consolidated output went down 15.5% to 98.3 Mt in Asia and Oceania reflecting the sharp decline in China.In North America, crude steel production climbed 13.8% to 7.2 Mt in the United States in November. Steel demand has rebounded in the Unites States with the resumption of operations, leading to an uptick in capacity utilization and domestic steel production. U.S. capacity utilization rate broke above the important 80% level in May 2021 for the first time since the start of the pandemic last year, and remains above that level amid strong domestic demand. Overall production in North America rose 9.3% to roughly 9.7 Mt.  In the Europe Union (EU), production from Germany, the largest producer in the region, ticked down 0.3% to 3.4 Mt. Total output was up 3.7% in the EU to 12.9 Mt. European steel makers are facing headwinds from a slowdown in automotive steel demand. The semiconductor shortage is hurting demand from car manufacturers. The spike in electricity costs is also weighing on steel producers in Europe, especially electric arc furnace producers, due to an increase in steelmaking costs.  Output in the Middle East slipped 5.3% to 3.8 Mt in November. Iran, the top producer in the region, saw a 5.2% decline to 2.7 Mt. Africa recorded a 37.4% surge to 1.5 Mt.Among other notable producers, output from Turkey went up 6.1% to 3.4 Mt. Production from Brazil, the biggest producer in South America, increased 2.5% to 3.1 Mt in November.Steel Prices Cooling Off, but Industry Fundamentals Remain FavorableThe steel industry has staged a strong comeback this year after being rattled by the fallout from the coronavirus pandemic last year, thanks to a strong revival in end-market demand and an upswing in steel prices.The pandemic hurt demand for steel across major end-use markets for much of the first half of last year. However, the industry has rebounded strongly on solid pent-up demand and a rally in steel prices. The resumption of operations across major steel-consuming sectors such as construction and automotive following the easing of lockdowns and restrictions globally has led to an uptick in steel demand.Steel prices have also escalated to record highs this year. Strong demand and persistent supply shortages have also led to a spike in U.S. steel prices this year to historically high levels, allowing U.S. steel companies to churn out record profits despite an uptick in costs of raw materials including ferrous scrap and headwinds from supply-chain and logistics issues.After plummeting to a pandemic-led low of roughly $440 per short ton in August 2020, the benchmark hot-rolled coil (“HRC”) prices witnessed a significant rally, breaking above the $1,900 per short ton level in August 2021 on the back of a mismatch between supply and demand.However, HRC prices have come under pressure since October after peaking in September 2021, dragged down by shorter lead times, imports of lower-priced steel and a slowdown in demand in automotive resulting from production cuts by carmakers in the wake of the semiconductor shortage. Nevertheless, HRC prices (currently hovering around $1,600) remain elevated notwithstanding the recent correction, as they are well above the year-ago levels and nearly four-times higher than the August 2020 low.Demand weakness in automotive is likely to continue as the chip shortages are unlikely to abate anytime soon.  Despite a slowdown in steel demand in the automotive space amid the ongoing chip crunch, healthy demand in other end markets including construction and supply disruptions due to mill outages and scheduled maintenance are likely to lend support to HRC prices through the balance of this year and into 2022, driving profit margins of steel companies.Steel Stocks Worth A LookA few stocks currently worth considering in the steel space are TimkenSteel Corporation TMST, EVRAZ plc EVRZF, Commercial Metals Company CMC and United States Steel Corporation X.TimkenSteel sports a Zacks Rank #1 (Strong Buy) and has a projected earnings growth rate of 425.8% for the current year. The Zacks Consensus Estimate for TMST’s current-year earnings has been revised 25.2% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.TimkenSteel beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 59.2%. TMST shares have surged around 237% in a year.EVRAZ has a projected earnings growth rate of 244.8% for the current year. EVRZF's consensus estimate for the current year has been revised 2% upward over the last 60 days.Shares of EVRAZ have gained around 36% in the past year. EVRZF currently carries a Zacks Rank #1.Commercial Metals carries a Zacks Rank #1 and has an expected earnings growth rate of 10.5% for the current fiscal year. The consensus estimate for CMC's current fiscal year earnings has been revised 6.6% upward over the last 60 days.Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 7.4%, on average. CMC has rallied around 75% over the past year.United States Steel carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for X’s current-year earnings has been revised 7% upward over the last 60 days.United States Steel has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 24.5%. X shares have gained around 38% over the past year. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report United States Steel Corporation (X): Free Stock Analysis Report Commercial Metals Company (CMC): Free Stock Analysis Report Timken Steel Corporation (TMST): Free Stock Analysis Report EVRAZ (EVRZF): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 24th, 2021

4 Chemical Stocks That Have More Than Doubled in 2021

Driven by the industry's strong rebound on the back of an upswing in demand, a few chemical stocks have performed well year to date. Notable among them are OLN, ASIX, GPRE and LAC. The chemical industry has witnessed a strong rebound in 2021 from the crisis wrought by coronavirus, courtesy of an uptick in demand across major end-use industries such as automotive, construction, healthcare and electronics. The industry bore the brunt of demand shocks for much of the first half of last year as global industrial activities were halted amid the pandemic.However, with the reopening of the major economies around the world, demand for chemicals started to pick up from the third quarter of 2020 on a rebound in economic activities worldwide. The recovery has continued on a global upswing in manufacturing and industrial activities.Several chemical companies have delivered handsome returns this year on the back of the positive momentum in the industry. Notable among them are Olin Corporation OLN, AdvanSix Inc. ASIX, Green Plains Inc. GPRE and Lithium Americas Corp. LAC.The companies in the chemical place are benefiting from strong demand and higher prices. Demand for both commodity and specialty chemicals remains healthy in key end-use markets. Higher demand and prices are driving sales volumes, top lines and margins.Chemical makers are seeing higher demand from the automotive market notwithstanding the chip shortage, which continues to affect automotive builds globally. The automotive industry has witnessed a recovery after last year’s virus-led slump on the back of strong pent-up demand. Strength is also being witnessed in residential construction globally, supported by lower interest rates and higher demand for new properties due to the rising work-from-home trend. Companies in the chemical space are also benefiting from higher demand across healthcare and packaging markets, thanks to coronavirus. These companies are seeing a recovery in demand across the aerospace and energy markets.The upswing in manufacturing activities is also a major driving force behind the strong recovery of the U.S. chemical industry this year. Despite continued supply-chain disruptions and labor constraints, the U.S. manufacturing sector has kept the momentum going, aided by strong demand for goods and an upturn in the overall economy. The sector has staged a strong rebound from the coronavirus blues with activities showing a V-shaped recovery.U.S. manufacturing activities expanded in November on an uptick in new orders. The U.S. Manufacturing Purchasing Managers’ Index registered 61.1% in November, rising from 60.8% in October, reflecting expansion in the overall economy for the 18th straight month, per the Institute for Supply Management. A reading above 50 indicates expansion in activity. New orders rose for the 18th consecutive month in November, indicating higher demand for manufacturing products.The manufacturing sector is a major driver for the chemical industry, which touches around 96% of manufactured goods. As such, the strength in the sector augurs well for the U.S. chemical industry.The American Chemistry Council earlier this month said that it expects the U.S. chemical industry to accelerate next year on the back of strong consumer demand, aided by the resumption of manufacturing activities and restocking of inventories. The trade group envisions total domestic chemical production volumes (barring pharmaceuticals) to rise 4.3% in 2022, following a 1.4% growth this year.However, chemical companies are grappling with raw material cost inflation as well as higher supply chain and logistics costs. Supply chain disruptions due to coronavirus and weather-related events have led to a spike in raw material costs. Supply tightness continues for a number of key raw materials.Hurricane Ida dealt another blow to the supply chain. Force majeures and plant shutdowns associated with Ida further squeezed the supply of raw materials, including ethylene and propylene and pushed up their prices, the impacts of which had been witnessed in third-quarter 2021. The effects of supply chain and logistic bottlenecks, worsened by the unfavorable weather events globally and the resurgence of coronavirus infections, are expected to continue through the balance of 2021 and into 2022.Nevertheless, actions to raise selling prices of chemical products to counter the cost inflation and tightness in the supply chain, productivity improvement measures and operational efficiency improvement are likely to help the chemical industry sustain margins.4 Significant Gainers of 2021Driven by the industry’s upward momentum, a few chemical stocks have performed well year to date. Below we discuss four such stocks, which have seen their prices pop more than 100% this year. Image Source: Zacks Investment ResearchOlin: Based in Missouri, Olin flaunts a Zacks Rank #1 (Strong Buy). It is benefiting from the Lake City U.S. Army ammunition contract, productivity actions and investment in the Information Technology (IT) project. Its Winchester segment is benefiting from the Lake City contract, which is driving sales in this unit. OLN also remains committed to improving its cost structure and efficiency, and also driving productivity through a number of projects. It is also expected to gain from cost and other benefits from its investment in the IT project. You can see the complete list of today’s Zacks #1 Rank stocks here.Driven by these factors, OLN’s shares have shot up 127.3% year to date. Olin has an expected earnings growth rate of 4.2% for 2022. The Zacks Consensus Estimate for 2022 earnings has moved up 22.2% in the past 60 days.AdvanSix: New Jersey-based AdvanSix sports a Zacks Rank #1. It is benefiting from improved end-market conditions and growth of its differentiated products. ASIX is seeing a recovery in demand across a number of markets, including automotive, building & construction, electronics and packaging. Higher demand is driving its volumes. Strong agricultural industry fundamentals also bode well. Favorable market conditions and tight industry supply support demand for nylon in North America. Strong demand for chemical intermediates is also being witnessed across several markets. Higher prices are also contributing to its top-line growth.These factors have resulted in ASIX’s share price rally of 121.7% this year. AdvanSix has a projected earnings growth rate of 3.9% for 2022. The consensus estimate for earnings for 2022 for ASIX has moved up 10.8% in the past 60 days.Green Plains: Nebraska-based Green Plains carries a Zacks Rank #3 (Hold). It remains focused on executing its transformation plan. The ongoing deployment of Ultra-High Protein technology is expected to boost contributions of its high-protein initiative. GPRE is also making notable progress in its key areas of growth — renewable corn oil, clean sugar technology, carbon capture and sequestration initiatives.These factors have contributed to Green Plains’ share price appreciation of 171.4% year to date. GPRE has an expected earnings growth rate of 190.3% for 2022.Lithium Americas: Canada-based Lithium Americas carries a Zacks Rank #3. It remains focused on advancing two significant lithium projects — Cauchari-Olaroz and Thacker Pass. Lithium Americas remains committed to advancing these projects to address the rising global demand for lithium. LAC will also benefit from its recently announced acquisition of Millennial Lithium for $400 million. The buyout reinforces the company’s growth pipeline and provides a compelling growth opportunity close to its Cauchari-Olaroz lithium brine project in Argentina along with significant synergies. The company’s recently increased strategic interest in Arena Minerals also strengthened its long-term resource development plans in Argentina.These factors have contributed to Lithium Americas’ share price rally of 133.4% this year. LAC has an expected earnings growth rate of 92.3% for 2022. Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Olin Corporation (OLN): Free Stock Analysis Report Green Plains, Inc. (GPRE): Free Stock Analysis Report AdvanSix (ASIX): Free Stock Analysis Report Lithium Americas Corp. (LAC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 23rd, 2021

MasTec (MTZ) to Acquire Henkels, Expand Market Presence

MasTec (MTZ) to expand in the fast-growing electric utility services market with the buyout of Henkels. MasTec, Inc. MTZ has inked a deal to acquire a leading U.S. private electrical power transmission and distribution utility services firm — Henkels & McCoy Group Inc. (Henkels). The transaction is valued at $600 million, with approximately $420 million in cash and nearly 2 million shares of MasTec’s common stock, subject to customary purchase price adjustments.The deal is likely to close by 2021-end, subject to receiving the required Hart-Scott-Rodino approvals and the satisfaction of other customary closing conditions. MasTec projects post-acquisition leverage metrics to remain within the targeted range and ample liquidity.Henkels is the 14th largest U.S. specialty contractor according to the recent 2021 Engineering News-Record ranking. Founded in 1923, the company has generated approximately $1.5 billion revenues in fiscal 2021, primarily owing to long-tenured relationships across a diverse blue chip customer base, with expansive geographic operations across the United States.The acquisition is in line with its long-term strategy of expanding in the fast-growing electric utility services market on the back of incremental recurring master service agreement revenues. Henkels is likely to register comparable results in fiscal 2022 as well. In fiscal 2021, it reported approximately $1.5 billion of revenues and $70 million of adjusted EBITDA. Both fiscal 2021 and expected post-acquisition 2022 results reflect impacts of underperforming communications and pipeline services operations, which are anticipated to improve gradually.Jose Mas, MasTec's chief executive officer, stated, "Henkels' operating excellence is well known in the industry, and together with MasTec, our expanded resources and footprint will help serve expected significant growth demand in the utility sector.” He continued, “We believe that Henkels' expertise, scale and capacity, when combined with our existing operations, will provide a compelling suite of service offerings to support our customers' needs as they work to transition to renewable energy generation, modernize power grid systems and reduce carbon emissions."Share Price PerformanceShares of MasTec have gained 28.6% so far this year, outperforming the Zacks Building Products - Heavy Construction industry’s 20.5% rally. Despite uncertain market conditions, its performance in 2021 is expected to grow year over year, given a strong backlog and accelerating growth potential, especially across communications, transmission, and power generation as well as renewable portfolios.Image Source: Zacks Investment ResearchThe company has been making the most of the country’s diligent focus on carbon neutrality. Furthermore, MTZ’s substantial presence in the telecommunications market and recent expansion into heavy infrastructure will prove conducive to its growth profile.Although MasTec has enough visibility throughout 2021, the biggest risks to its guidance are governmental permitting, crew social distancing mitigation, and the impact they may have on project schedules along with any potential project delays.Zacks RankMasTec currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Some Better-Ranked Stocks in the Construction SectorSterling Construction Company, Inc. STRL: Headquartered in The Woodlands, TX, this company is engaged in heavy civil construction, specialty services and residential construction activities. It is currently reaping benefits from the transformed business portfolio and overall project mix toward higher value, lower risk, and more profitable work. Its diverse portfolio of end customers and geographies, coupled with the strength of end-markets served, has been driving growth despite headwinds from inflation and the supply chain.Sterling currently carries a Zacks Rank #1 and has gained 29.1% in the past year. Earnings for 2021 are expected to grow 41.5%.EMCOR Group, Inc. EME: Headquartered in Norwalk, CT, this company provides electrical and mechanical construction and facilities services in the United States. EMCOR has been benefiting from solid execution in the U.S. Construction segment — comprising the U.S. Mechanical and Electrical Construction units — as well as disciplined cost control amid the COVID-19 pandemic. Also, accretive buyouts have been strengthening its overall results by adding new markets, opportunities and capabilities.EMCOR, currently carrying a Zacks Rank #2, has gained 32% in the past year. Earnings for 2021 are expected to grow 10.6%.Weyerhaeuser Company WY is one of the leading U.S. forest product companies. The company has been benefiting from solid new residential construction activity, which in turn is leading to improved demand. Also, its focus on operational excellence has been advantageous over time.Weyerhaeuser’s earnings estimates for the current fiscal year have increased 0.9% over the past seven days. Shares of the company have jumped 18.1% in the past year.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Weyerhaeuser Company (WY): Free Stock Analysis Report EMCOR Group, Inc. (EME): Free Stock Analysis Report Sterling Construction Company Inc (STRL): Free Stock Analysis Report MasTec, Inc. (MTZ): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 21st, 2021

5 ETF Areas Up At Least 70% in 2021

The S&P 500 hit a record high of 4,743.83 for the first time. The index is up now 21.6% this year. But these ETFs topped the key U.S. index. We are fast approaching the end of 2021 and it’s been a stellar year so far for Wall Street. The S&P 500 hit a record high of 4,743.83 for the first time. The index is up now 21.6%. The S&P 500 has emerged as the best among the key U.S. indexes, with the Dow Jones (up 14.1%), the Nasdaq Composite (up 16.2%) and the Russell 2000 (up 8.4%) trailing it.The key events of this year that pulled the strings of the markets were record-high inflation, the start of Fed’s QE tapering from November, the likelihood of rate hikes in 2022, President Biden’s $1.2-trillion infrastructure bill, COVID-19 threat (first Delta and now Omicron variant) and hopes for more COVID-19 therapies from the likes of Merck and Pfizer.On the international market front, Chinese markets caught attention for regulatory crackdown especially on its tech sector, the property market bubble and toughening of diplomatic ties with the United States. Plus, global economies seesawed between economic reopening and lockdowns, depending on the respective COVID-19 scenarios with Europe facing a huge threat in winter.Against this backdrop, below we highlight a few ETF areas that have been the winners in 2021.ShippingThe ongoing supply chain issues have kept the demand for shipping at pretty high levels, leading to higher freight rates. The rate for a single shipping container has shot up materially over the last 18 months as the pandemic disrupted supply chains and trade channels.As a result, Breakwave Dry Bulk Shipping ETF BDRYhas jumped 211% this year.The underlying Capesize 5TC Index, Panamax 4TC Index & Supramax 6TC Index measure the rates for shipping dry bulk freight.Rising freight rates are likely to push up global import prices by 11% by 2023, according to a UN report, as shipping lines reported record profits for the third quarter.     Carbon Credit ETFsGoing green has become a mantra to save the earth. The governments around the world are focused on moving toward the goal of net-zero emissions by 2050 set by the 2015 Paris agreement. Some companies are trying to reduce their carbon footprint voluntarily.Another way for companies to manage their carbon footprint is to buy and sell emission allowances. In the cap-and-trade system, a government sets a limit on overall emissions which is tightened over time. Big carbon emitters need to buy these pollution permits to stay under regularity caps.This is where products like iPath Series B Carbon ETN GRN (up 127.1%), Kfa Global Carbon ETF KRBN (up 90.7%) win.The Barclays Global Carbon II TR USD Index of GRN seeks to provide exposure to the price of carbon as measured by the return of futures contracts on carbon emissions credits from the European Union Emission Trading Scheme and the Kyoto Protocol Clean Development Mechanism. The underlying IHS Markit Global Carbon Index of KRBN tracks the most-liquid segment of the tradable carbon credit futures markets.TinIndustrial metals had a sizzling 2021. Vaccines, therapies and President Biden’s $1.2-trillion infrastructure bill instilled considerable optimism in the markets. This, in turn, boosted global economic recovery and industrial activities. No wonder, industrial metals have soared (read: Industrial Metal ETFs Win in 2021: What Next in 2022?).Among many winners in this space, tin grabbed eyeballs. Tin prices have been hovering around a record high on supply crunch. Prices for the metal have been powered by supply disruptions in key producing countries and surging demand for electronics, in which the metal is used for soldering to connect components, according to a mining.com article.The global tin market deficit is expected to increase to 12,700 tons in 2022 from 10,200 tons this year, International Tin Association (ITA) predicted in June, as quoted on mining.com. Indonesia — a key producer — plans to stop the soldering metal’s exports from 2024 to attract investments in downstream industries. This metal is also a beneficiary of the rise in clean energy.Energy2021 can easily be accredited as a year of comeback for energy. WTI crude United States Oil Fund LP (USO) has added 54% this year. Brent crude United States Brent Oil Fund LP (BNO) has gained 53.2% in the year-to-date frame. The rally has been spurred by economic reopening, which has called for higher demand and subdued valuation. OPEC and non-OPEC partners, a group collectively referred to as OPEC+, have also maintained a protocol of a gradual increase in oil supply.  Moreover, bets that the new COVID-19 variant Omicron may cause milder illness than previously feared lessened chances of further lockdowns, which in turn pushed oil prices higher. Apart from the easing concerns about the impact of the Omicron variant on global fuel demand, the fact that Iran nuclear talks hit a snag, deferring the return of Iranian crude supplies, boosted oil pricesNatural Gas ETF First Trust FCG (up 87.6%), Dynamic Energy Exploration & Production Invesco (PXE) (up 84.1%) are two toppers of this space.Uranium Uranium stocks have been on a tear buoyed by growing social media attention, the restart of nuclear reactors in Japan after 10 years and the growing uranium supply deficit, being accelerated by the COVID-related production cuts. North Shore Global Uranium Mining ETF URNM has jumped 74.2% this year.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report United States Brent Oil ETF (BNO): ETF Research Reports First Trust Natural Gas ETF (FCG): ETF Research Reports iPath Series B Carbon ETN (GRN): ETF Research Reports Breakwave Dry Bulk Shipping ETF (BDRY): ETF Research Reports North Shore Global Uranium Mining ETF (URNM): ETF Research Reports KraneShares Global Carbon Strategy ETF (KRBN): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 21st, 2021

Alibaba"s (BABA) Carbon Neutrality Goals Boost Climate Pledge

Alibaba (BABA) commits to achieve carbon neutrality by 2030. It also targets to facilitate 1.5 gigatons of decarbonization by 2035. Alibaba BABA gears to zero down its carbon footprints to boost its environmental sustainability goals.The company has recently announced its carbon neutrality commitments to bolster its climate strategy. Alibaba has pledged to achieve carbon neutrality by 2030.Precisely, Alibaba Group aims to achieve the target in its direct emissions — Scope 1 — as well as its indirect emissions — Scope 2. Notably, indirect emissions are derived from electricity consumption.The company also targets reducing its carbon intensity by 50% by 2030 in Scope 3 (emissions produced by participants in its platform’s ecosystem from areas such as transportation, purchased goods and services, and waste).Meanwhile, Alibaba Cloud aims to achieve the latest carbon neutrality target in three defined scopes.The company has announced Scope 3+ target, according to which it aims to achieve 1.5 gigatons of decarbonization by 2035.We note that the latest move is likely to benefit Alibaba in today’s world, where the demand for lowering the hazardous environmental impacts of business operations is increasing at a fast pace.Further, switching to the use of clean and renewable energy is expected to help the company gain investor optimism.Alibaba Group Holding Limited Price and Consensus  Alibaba Group Holding Limited price-consensus-chart | Alibaba Group Holding Limited QuoteCarbon Neutrality Gaining SteamWith the latest move, Alibaba peps up the carbon neutrality game for the other bigwigs like Amazon AMZN, Alphabet GOOGL and Analog Devices ADI, which are also taking initiatives to adopt alternative energy sources for lowering overall carbon emissions and cutting energy bills substantially.Amazon has turned out to be the biggest corporate investor in renewable energy by bringing its total count of renewable energy projects to 274 globally.The e-commerce giant aims at powering its infrastructure with 100% renewable energy on the back of its growing investments in these projects. Notably, the goal was initially targeted to be met by 2030, which is now expected to be achieved by 2025. Further, Amazon has pledged to meet net-zero carbon emission goals by 2040.Alphabet’s aggressive three-fold strategy — which includes energy efficiency, renewable energy procurement and carbon offsets — is a testament to its commitment to carbon neutrality.Moreover, the company’s division, Google, which has been carbon neutral since 2007, is now aiming to be carbon-free by 2030.Meanwhile, Analog Devices pledged to reach carbon neutrality and net-zero emissions by 2030 and 2050, respectively. Moreover, it is committed to Science-Based Targets.Further, it intends to shift its operations to 100% renewable energy by 2025. Also, it is gearing up to address emissions across the full value chain by 2030.Bottom LineThe latest move of Alibaba is in sync with its strong efforts to bolster its presence in the e-commerce as well cloud industry by deepening its focus on maximizing the sustainability impacts of its technologies and solutions.However, this Zacks Rank #5 (Strong Sell) company is currently facing stiff competition from the domestic as well as foreign e-commerce companies despite its strong e-commerce strategies and platform. Further, the company is reeling under competitive pressure from major cloud players like Amazon Web Service, Microsoft Azure and Google Cloud.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Additionally, Alibaba’s increasing regulatory concerns in China along with rising expenses associated with new initiatives remain overhangs. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Analog Devices, Inc. (ADI): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report Alibaba Group Holding Limited (BABA): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 20th, 2021

5 Must-Buy High-Flying Stocks With More Upside in 2022

We have narrowed our search to five large-cap stocks that have skyrocketed more than 60% in 2021 with more upside left for 2022. These are: CF, OXY, DVN, MRVL and BX. We are approaching the end of 2021 with just nine days of trading left. Wall Street is likely to close a highly successful 2021 unless something drastic crops up in the last few days. After an astonishing 2020, the performance of U.S. stock markets is commendable as both years have been marred by the pandemic.Several stocks have skyrocketed in 2021 with more room to grow next year. Investment in such stocks with a favorable Zacks Rank should be lucrative going forward. Here we have selected five stocks, namely, Blackstone Inc. BX, Devon Energy Corp. DVN, CF Industries Holdings Inc. CF, Occidental Petroleum Corp. OXY and Marvell Technology Inc. MRVL.A Solid 2021 for Wall StreetYear to date, the major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have rallied 17.3%, 24.3% and 17.8%, respectively. In 2020, the Dow, the S&P 500 and the Nasdaq Composite — advanced 7.3%, 16.3% and 43.6%, respectively.The Market rally in 2021 is more commendable as it is more broad-based. Last year’s performance was mainly technology sector based. This year, aside from technology, cyclical sectors like energy, financials, industrials, materials and consumer discretionary have gained impressively with the reopening of the economy.Nationwide COVID-19 vaccination and faster-than-expected recovery of the U.S. economy have acted as the catalysts of 2021. On the other hand, this year has been negatively impacted by the highest inflation rate in four decades and shortage of skilled manpower. Inflation has skyrocketed in 2021 primarily due to the pandemic-led global breakdown of the supply-chain system. This year has also been affected by the resurgence of coronavirus in various variants.Near-Term PositivesThe fundamentals of the U.S. economy are robust. Both consumer spending and business spending remain strong despite mounting inflation and global supply-chain disruptions. Both manufacturing and services PMIs have remained elevated.On Nov 15, President Joe Biden signed a bipartisan infrastructure bill of $550 billion in addition to the previously approved funds of $450 billion for five years. Total spending may go up to $1.2 trillion if the plan is extended to eight years.The infrastructure development project will be a major catalyst for the U.S. stock markets in 2022. Various segments of the economy such as basic materials, industrials, utilities and telecommunications will benefit immensely with more job creation for the economy.On Nov 19, the House of Representatives passed a massive $1.75 trillion social safety net and climate bill proposed by the Biden administration. The bill will now head toward the Senate.Moreover, the White House has put pressure on Congress to quickly pass legislation providing $52 billion to help computer chip manufacturers and ease the shortage of components vital to many industries.Our Top PicksWe have narrowed our search to five large-cap stocks (market capital > $10 billion) that have skyrocketed more than 60% in 2021 with more upside left for 2022. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The chart below shows the price performanc of our five picks year to date.Image Source: Zacks Investment ResearchDevon Energy aims for strong oil production from the Delaware Basin holdings. Devon Energy’s presence in Delaware has expanded due to its all-stock merger deal with WPX Energy. DVN is using new technology in production process to lower expenses.Devon Energy’s divestiture of Canadian and Barnett Shale gas assets will allow it to focus on its five high-quality oil-rich U.S. basins assets. DVN’s stable free cash flow generation allows it to pay dividend and buy back shares. Devon Energy has ample liquidity to meet near-term debt obligations.Devon Energy has an expected earnings growth rate of 54.1% for next year. The Zacks Consensus Estimate for next-year earnings improved 1.7% over the last 30 days. The stock price of DVN has soared 155.3% year to date.The Blackstone Group remains well-poised to benefit from its fund-raising ability, revenue mix and inorganic expansion strategies. To provide ESG-focused investment opportunities, BX inked a deal to acquire Sphera, while the buyout of DCI will further enhance its digital capabilities.The Blackstone Group’s fee-earning AUM and total AUM consistently demonstrate strong growth, aided by increasing net inflows. Over the last four years (2017-2020), fee-earning AUM witnessed a CAGR of 11.9% and total AUM saw a CAGR of 12.5%. Both metrics witnessed an uptrend in the first nine months of 2021. BX’s diversified products, revenue mix and superior position in the alternative investments space will likely continue to support AUM growth.The Blackstone Group has an expected earnings growth rate of 18.2% for next year. The Zacks Consensus Estimate for next-year earnings improved 15.4 % over the last 60 days. The stock price of BX has jumped 91.3% year to date.Marvell Technology is benefiting from solid demand for its storage and networking chips from the 5G infrastructure and data-center end markets. Strong supply-chain executions are helping MRVL to address the strong demand from cloud datacenters for its Smart NICs and security adapters.Moreover, the wireless infrastructure business of Marvel Technology is showing signs of improvements. The recent acquisition of Inphi is boosting the top line of MRVL. Further, the storage business is steadily recovering from the coronavirus impacts.Marvel Technology has an expected earnings growth rate of 42.6% for next year (ending January 2023). The Zacks Consensus Estimate for next-year earnings improved 10.5% over the last 30 days. The stock price of MRVL has climbed 75.9% year to date.CF Industries is well placed to benefit from higher nitrogen demand in major markets. Demand for nitrogen is expected to be strong in North America, driven by healthy corn acres in the United States. Lower domestic urea production is also likely to drive demand in Brazil.  CF Industries is also seeing a rebound in industrial demand from the pandemic-led disruptions. CF will also likely gain from a recovery in nitrogen prices on the back of lower supply availability due to reduced operating rates across Europe and Asia. Higher nitrogen prices will lend support to CF’s bottom line.CF Industries has an expected earnings growth rate of more than 100% for next year. The Zacks Consensus Estimate for next-year earnings improved 1% over the last 7 days. The stock price of CF has appreciated 66.2% year to date.Occidental Petroleum continues to increase hydrocarbon production volumes from its high-quality asset holdings and lower outstanding debts through the proceeds from non-core assets sale. The acquisition of Anadarko, investment to strengthen infrastructure and its Permian Basin exposure continue to boost the performance of OXY.Occidental Petroleum has achieved the $10-billion divestiture goal through non-core assets sale. Its cost-management initiatives will boost margins going forward. OXY is also working to lower emission and aims for net-zero emissions by 2050.Occidental Petroleum has an expected earnings growth rate of 41.3% for the current year. The Zacks Consensus Estimate for current-year earnings improved 35.7% over the last 7 days. The stock price of OXY has surged 64% year to date. Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Blackstone Inc. (BX): Free Stock Analysis Report Devon Energy Corporation (DVN): Free Stock Analysis Report Occidental Petroleum Corporation (OXY): Free Stock Analysis Report CF Industries Holdings, Inc. (CF): Free Stock Analysis Report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 17th, 2021

FirstEnergy (FE) to Bring Electric Bucket Trucks on Road

FirstEnergy (FE) to introduce electric bucket trucks on the roads of New Jersey soon. The move is inline with its clean-energy mission. FirstEnergy Corp. FE will soon bring its first cleaner-powered hybrid electric bucket trucks on the road, thereby offering better services to Jersey Central Power & Light (JCP&L) customers in New Jersey. Five new hybrid electric bucket trucks are currently receiving final inspections at JCP&L line shops.The deliveries are expected in the areas served by FirstEnergy's West Virginia utilities and Ohio Edison areas early next year. Its feature will help extend the life of the vehicle by reducing engine operation time, eliminating certain maintenance expenses and cutting fuel costs over time.Motive Behind the MoveThis move will help FE reduce greenhouse gas (GHG) emissions as hybrid bucket trucks reduce emissions using a high-capacity battery pack motor to power the hydraulic lift rather than idling the diesel engine. It is part of FirstEnergy's plans to electrify 30% light duty and aerial fleet vehicles by 2030, with a further goal of reaching complete electrification by 2050. If FE reaches its 30% target, it can eliminate approximately 10,000 metric tons of GHG emissions – equivalent to removing nearly 2,200 cars from the road each year.FE is focused on lowering its emission levels and took initiatives to that end. The latest move is in fact a testament to that.In April 2019, FirstEnergy released its Climate Report titled “Energy for a Brighter Future,” which uses a 2-degree scenario (2DS) analysis from the International Energy Agency’s 2DS vision. This will determine the potential impacts of reducing carbon dioxide (CO2) emissions to moderate levels for limiting the global temperature rise to less than 2 degrees Celsius.Peer MovesOther electric utilities also adopting measures to supply clean and reliable energy to their customers include Duke Energy DUK, Xcel Energy XEL and Alliant Energy LNT. All three stocks are planning to provide absolute clean energy by 2050.DUK aims to reduce carbon emissions between approximately 55% and 75% through 2035 and cut methane emissions to net-zero by 2030 for its natural gas distribution companies. By 2050, renewables are projected to be Duke Energy’s largest energy source, covering more than 40% of its generation capacity.The long-term earnings growth rate and the dividend yield for DUK are pegged at 5.3% and 3.9%, respectively. Earnings surprise of Duke Energy in the last four quarters is 2.29%,on average.Xcel Energy reached 51% carbon reduction in June 2021 from its 2005 baseline. According to XEL’s plan, it will achieve 85% carbon reduction and completely exit the usage of coal by 2030. Overall, XEL aims to generate 100% carbon-free electricity by 2050.The long-term earnings growth rate and the dividend yield for XEL are pegged at 6.4% and 2.7%, respectively. Earnings surprise delivered by XEL in the last four quarters is 2.09%, on average.LNT announced retiring all the existing coal-fired generation units by 2040 to lower emissions from the 2005 levels by 50% and 100% within 2030 and 2050, respectively. In total, Alliant Energy will replace 2 gigawatts of coal-fired generation with clean energy sources over the next few years.The long-term earnings growth rate for LNT is pegged at 6.1%, while its dividend yield is 2.7%. Earnings surprise delivered by LNT in the last four quarters is 4.41%, on average.Zacks Rank & Price PerformanceIn the past month, shares of FE, presently a Zacks Rank #3 (Hold) player, have gained 2.2%, underperforming the industry’s rise of 2.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.One Months' Price PerformanceImage Source: Zacks Investment Research Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Xcel Energy Inc. (XEL): Free Stock Analysis Report FirstEnergy Corporation (FE): Free Stock Analysis Report Duke Energy Corporation (DUK): Free Stock Analysis Report Alliant Energy Corporation (LNT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 16th, 2021