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Category: videoSource: reutersMay 15th, 2020

35 Brands That Start With E

You cannot go wrong with good brand products. They are a fabric of our culture. It is something we all have tried or used at one point or another. Brands offer us something with a small promise of the item being great quality. Looking at brands that start with A was fun as we got […] The post 35 Brands That Start With E appeared first on 24/7 Wall St.. You cannot go wrong with good brand products. They are a fabric of our culture. It is something we all have tried or used at one point or another. Brands offer us something with a small promise of the item being great quality. Looking at brands that start with A was fun as we got to talk about Apple, Adidas, and many exciting brands. It allowed us to see so many brands that we use in our daily lives. Brands came in all shapes and sizes. Likewise, they are all pretty important in the grand scheme of things. When looking at brands that start with E, we will also look at what they are and the ultimate purpose they serve in our lives. With that said, let’s dig deep and take a look at brands that start with the letter E. Catgory 1: Clothing Brands Embed from Getty Imageswindow.gie=window.gie||function(c){(gie.q=gie.q||[]).push(c)};gie(function(){gie.widgets.load({id:'2Nrnta9HRnNs2Y001Vs4GQ',sig:'84C0k1zyC5kuZLZoLdDcFmNiNOtYw9dWnz_6og7BGCY=',w:'594px',h:'396px',items:'1853184325',caption: false ,tld:'com',is360: false })}); 1. Eastpak Eastpak brings its brand to backpacks, luggage, and other shoulder bags. However, the brand also has a lot of collaborations and customized products. They recently did a collaboration with Cartoon Network. One of their classic collaborations is with the Simpsons. 2. ECCO ECCO brings out shoes, bags, and other accessories. You can find shoes for hiking, or for that fancy wedding you are planning to go to. The brand always offers something new and exciting for customers. 3. Ed Hardy The first thing you notice when you check out the Ed Hardy brand is some trendy jean jackets and pantyhose. Ed Hardy creates specific branding designs for every occasion or holiday. The brand is very high on T-shirts and dresses. They also heavily promote hoodies and denim. It is one of the unique brands that start with E. 4. Eddie Bauer When talking about comfortable footwear, you cannot go wrong with Eddie Bauer. Let’s look at what they offer. The first thing you notice about this brand is that they flow with the seasons. Currently, the focus is on outerwear and shoes for the snow. They are an outdoor brand that promotes going outside, touching the grass, and being one with nature. 5. Emporio Armani Perhaps you are more of the type to go strutting into business meetings while looking like the best person in the room. Emporio Armani is a classic brand that offers all the latest and stylish suits for you. But it does more than just that. You can also find jackets, pants, and sweaters with the brand design all over it. Emporio Armani believes you can wear their products for fashion or lifestyle. 6. ELLE Fashion is fun. When it comes to ELLE, you can get all the latest fashion trends. Wool coats and leather pants are some of the highlights you will see with this brand. There are all sorts of unique designs for every occasion. 7. Emerica Emerica is the exact opposite of ELLE. This brand is all about the skateboard lifestyle. You can get all the latest t-shirts, jackets, and footwear before riding that skateboard on the ramp. You also will get belts and beanies of all kinds with this brand. 8. Espirit Espirit is in over 40 countries. This brand is unique, with a heavy emphasis on three colors: blue, pink, and purple. You can get all the latest in t-shirts, hoodies, jackets, pants, and shorts. They are constantly mixing things up for the seasons, so there is always something new to check out. 9. Etsy Maybe you want something with a handmade design that is unique. That is what Etsy offers. The Etsy brand has 17 different categories to choose from. You will likely find what you want with something interesting and new to choose from. The brand has been around for a while and continues to thrive. Category 2: Cosmetic and Bath Brands Embed from Getty Imageswindow.gie=window.gie||function(c){(gie.q=gie.q||[]).push(c)};gie(function(){gie.widgets.load({id:'qSJFLvelT6lvbAaydU6OXg',sig:'znzmi-71nkX-h7Xg9z6Mw0J8diEfsyfgHR5d8r675z8=',w:'594px',h:'426px',items:'72019023',caption: false ,tld:'com',is360: false })}); 1. Earth Baby Earth Baby offers organic products that are perfect for cleansing your baby’s body. The heavy focus on infants makes it stand out among the brands that start with E because it is a specialized niche that has a lot of reach. With Earth Baby, you will get lotion, cream, body wash, and sunscreen. 2. e.l.f. Cosmetics With e.l.f. Cosmetics, you can get everything you can for your best skin treatment. You get the best brand versions of sunscreen, face concealer, and primer. Makeup and skincare are the two biggest selling points for this brand. It is all about the glow as the brand continues emphasizing products that will make you shine at your best. 3. Elemis Freshkin Maybe you need something for your skin that is a little more fancy than others? Elemis Franklin offers just that. In this case, you get an award-winning luxury brand. This brand is a big hit. It is also a brand that has been popular with celebrities such as Catherine Zeta-Jones and Kate Hudson. You will get plenty of good reviews from this brand. 4. Elizabeth Arden Makeup, perfume, and skincare are what you will get when you go for the Elizabeth Arden brand. You can get all of the newest fragrances available. Elizabeth Arden also offers suncare and eyecare. It is a staple of the brand. 5. Estee Lauder You have probably heard of Estee Lauder. It offers everything you can possibly want in all the latest cosmetics care, always offering the highest quality products. Estee Lauder offers numerous options for the lips, including lipstick and lipgloss. You can also get all the best brushes and tools to finish your collection. Estee Lauder provides everything you need for your cosmetics collection. 6. EVE PEARL You can get EVE PEARL beauty brands through their website or even on Amazon. It offers products for the face, lips, and eyes. You can also find everything you need for your skin. EVE PEARL also offers makeup tips to help its consumers apply makeup properly. Category 3: Food Brands 1. Earl of Sandwich If you desire a great sandwich, Earl of Sandwich is a popular brand that provides great hoagies. The brand has spawned restaurants all over the place. In fact, you can find one if you go to Downtown Disney in Anaheim. 2. Edy’s Ice Cream Maybe you like ice cream? Edy’s Ice Cream is a brand that has been screaming for ice cream since 1928. You will love all the flavors that this brand offers. Some of the classics that Edy’s offers include vanilla, chocolate chip, and vanilla bean. There is also a Rocky Road Ice Cream Collection that you will enjoy with seven different combos. It is a tasty brand that will work out for you on a hot summer day. 3. Eden Creamery You may want some cheese. There are plenty of cheese offerings with Eden Creamery. This brand comes from a farm in Idaho. The focus of this brand is on goat cheese and creme. It is a brand that is all over the country. 4. Eggo The Eggo brand has grown. It even tripled its sales after the brand was featured in the show ‘Stranger Things’, according to a report by the Los Angeles Times. It is a brand that has taken control of the breakfast food competition. You can get eggo in many different flavors and enjoy it with many different variations. 5. Eckrich You might want to have some smoked sausage with those waffles. Eckrich comes in with that assistance and has been delivering sausages since 1894. You can combine Eckrich sausages with anything. The brand is promoting three seasonal recipes right now. You can make a turkey sausage taco, smoked sausage hoagie, or BBQ sliders. It goes well with anything. 6. El Pollo Loco Chicken may be your favorite food, and that is where El Pollo Loco comes in. This brand has numerous restaurants throughout the world. They are also famous for their dipping sauces, which you can get on eBay. The focus of this brand is grilled chicken that sizzles after cooking and also offers numerous dipping sauces to try. 7. El Torito The El Torito brand evolved beyond its chain restaurants. They even have some lounges that are located underneath apartment buildings. You get all the branded chips along with the signature dishes. The brand is heavy on Mexican food and offers all the latest dishes. The cake mix and salad dressing are among the brand products you can find in some Mexican grocery stores. 8. Enzo Olive Oil Company If you are making a salad and need the perfect compliment, then the Enzo Olive Oil brand may be the thing to finish the meal prep. You get some amazing products like red wine vinegar or white wine vinegar. Either works for planting on your favorite salad dishes. You can even use it to cook or bake. It is the perfect finishing touch. 9. Essential Living  Essential Living promotes itself as raw skin foods that is trustworthy. There are many products under this brand with raw ingredients. Most of the items you will see on this brand are compliments of what you are making. It is not just for food. Essential Living also produces products that help clean the house or your skin. It also has items that help you smell nice. 10. Explore Cuisine You might want plant protein. You also might want food from other cultures. Explore Cuisine gives you that option. You will see many of their products at Sprouts Farmers Market or Mothers Market. Many of the products under this brand are organic. It is one of the healthier brands that start with E. Category 4: Financial, Technology and Media Brands 1. EA Games If you have ever played a sports video game, then you know all about EA Games. This is a popular brand that has created some of your favorite sports video game moments. EA  Games currently has its hands on game franchises like Madden and NHL. The brand continues to grow and produce more changes to its yearly titles while making more exciting sports video games. 2. E*TRADE E*TRADE is all about investments, trading, and retirement. This brand is famous in the stock market and one you have probably seen numerous commercials about. They just had a Super Bowl commercial that featured babies playing pickleball while talking about investments. This brand is so popular that it is everywhere and hard to miss. 3. eBay You might need to sell something or buy a product for cheaper prices. Then, you might have gone through eBay. This brand is so prominent in internet transactions. The brand lets you buy and sell items for a set price or let people bid on them, like an auction. You can find items for super cheap prices on eBay, at least at the start of the bid. It is one of the more popular brands that start with E. 4. eHarmony Online dating has become a big thing for people looking for love. It is a brand that has become large because most people know what it is. Moreover, you can use eHarmony to find people around your area who have a common interest. This brand continues to thrive and grow yearly. 5. Electrolux The Electrolux brand is all products for the home. Their washers and dryers were even given the best rating. Other products under the Electrolux brand include microwaves and wall ovens. You can also get kitchen air filters. 6. Emirates If you have ever flown on an airline, you know about Emirates. But their brand is more than just a normal airline. You will see Emirates on billboards. Additionally, you might even see the logo and brand on a jersey worn by a player from the English Premier League. It is a worldwide brand that is recognizable by millions. 7. Energizer The Energizer Bunny is a popular and iconic character in our culture. You probably remembered watching this character in commercials when you were young. Energizer is a brand that promises batteries that last a long time. It has been around since 1896 and has provided extra energy for some of your products ever since. 8. ESPN The original sports channel is a brand to admire. This brand now provides television coverage to millions of viewers across the world. Additionally, ESPN is a brand that also continues to provide sports entertainment online and in digital and print form. Many of your greatest memories watching sports have been aired on ESPN. It is a brand that continues to provide excellent sports coverage today. 9. Epson Epson has its stamp on printers and projectors. Many of the newest printing products for your home office have the Epson brand on them. It offers you the chance to print from anywhere with its newest products. Epson is a heavy contender for business services worldwide. 10. Expedia If you want to travel, then you probably have used the Expedia brand. It allows you to book a hotel room and a plane ticket at the same time. There are also numerous deals you can sprawl through by clicking their search bars. This brand provides so many choices for finding a place to stay and also gives you some selections on things to do near the place where you are staying. Sponsored: Want to Retire Early? Here’s a Great First Step Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances? Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free. Click here to match with up to 3 financial pros who would be excited to help you make financial decisions. The post 35 Brands That Start With E appeared first on 24/7 Wall St.......»»

Category: blogSource: 247wallstFeb 16th, 2024

Bloom Energy Corporation (NYSE:BE) Q4 2023 Earnings Call Transcript

Bloom Energy Corporation (NYSE:BE) Q4 2023 Earnings Call Transcript February 15, 2024 Bloom Energy Corporation misses on earnings expectations. Reported EPS is $0.07 EPS, expectations were $0.08. Bloom Energy Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Ladies and […] Bloom Energy Corporation (NYSE:BE) Q4 2023 Earnings Call Transcript February 15, 2024 Bloom Energy Corporation misses on earnings expectations. Reported EPS is $0.07 EPS, expectations were $0.08. Bloom Energy Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Ladies and gentlemen, thank you for standing by. I would like to welcome everyone to the Bloom Energy Q4 2023 Earnings Conference Call. At this time, all lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I will now hand the call over to Ed Vallejo, Vice President of Investor Relations. You may begin your conference. Ed Vallejo: Thank you, and good afternoon, everybody. Thank you for joining us for Bloom Energy’s fourth quarter 2023 earnings conference call. To supplement this conference call, we furnished our fourth quarter 2023 earnings press release with the SEC on Form 8-K and have posted it along with supplemental financial information that we will reference throughout this call to our Investor Relations website. During this conference call, both in our prepared remarks and in answers to your questions, we may make forward-looking statements that represent our expectations regarding future events and our future financial performance. These include statements about the company’s business results, products, new markets, strategy, financial position, liquidity and full year outlook for 2024. These statements are predictions based upon our expectations, estimates and assumptions. However, as these statements deal with future events, they are subject to numerous known and unknown risks and uncertainties as discussed in detail in our documents filed with the SEC, including our most recently filed Forms 10-K and 10-Q. We assume no obligation to revise any forward-looking statements made on today’s call. During this conference call and in our fourth quarter 2023 earnings press release, we refer to GAAP and non-GAAP financial measures. The non-GAAP financial measures are not prepared in accordance with U.S. Generally Accepted Accounting Principles, and are in addition to, and not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between the GAAP and non-GAAP financial measures is included in our fourth quarter 2023 earnings press release available on our Investor Relations website. Joining me on the call today are KR Sridhar, Founder, Chairman and Chief Executive Officer; Greg Cameron, our President and Chief Financial Officer; and Aman Joshi, our Chief Commercial Officer. KR will begin with an overview of our business, then Greg will review the operating and financial highlights of the quarter as well as the outlook for 2024. And after our prepared remarks, we will have time to take your questions. I will now turn the call over to KR. KR Sridhar: Hello, everyone, and thanks for joining us today. Let me start by thanking the Bloom Energy team for relentlessly working on our top objective of 2023, making the company profitable. Together, we achieved profitability by maintaining price discipline, reducing product costs, improving service margins, and reducing operating costs. What a huge milestone for our company. Now, our goal for 2024 is to increase the profitability on a year-over-year basis. In addition to record revenue, significantly improved margins and record annual operating income, we introduced innovative products and offerings, including one just this week. More on that later. Now, let me address the macros in the energy market. Digital transformation, AI, electric vehicles, onshoring of manufacturing and electrification of everything are all increasing demand for electricity at a rate never ever seen before. All these factors can drive demand for electricity up to 10 times more than the 0.5% average demand growth rate the utility industry is accustomed to for the last four decades. Can a slow-moving industry and the failing grid meet this unprecedented demand challenge? Let’s start with electricity generation. Even breakneck speeds of renewable expansion can at best address a very small fraction of this demand growth. In the last 10 years, all the new renewable capacity installed in the U.S. produces less electrical energy than the deficit created by retired coal and nuclear power plants. New nuclear power will not be online during the next decade in a meaningful way. We have to rely on more natural gas to meet the electricity demand. Once power is generated in faraway locations, it has to be transported to the demand centers by high-voltage transmission lines. While the National Renewable Energy Laboratory estimates that 90,000 miles of high-voltage transmission lines are needed to meet this growth, 90,000 miles, we have built less than 700 miles in 2022. All this suggests that as a nation, we will imminently face severe and huge power shortage that will last a couple of decades. This situation will be the same in many of the population centers and economic hubs around the world. In the past few months, as I speak to CEOs and business leaders, energy security and power availability are top-of-mind issues for them and their Boards. Most management teams today view the future supply and availability of electricity as a key enterprise risk. Unlike even five years ago, when most of the conversations were around cost of power, today, it is about the opportunity cost and business risk of not having power. So, how have these macros played out for Bloom Energy on our commercial side? Let me start with data centers, particularly AI data centers. For the last few months, my team and I have been engaged deeply with several leading companies in the AI space, from CEOs all the way to working level technical teams. The sales funnel for this sector alone is massive, not in the megawatts but in the gigawatts. The funnel is composed of several A-list companies with credible growth projections who are told by their utility companies to not rely on them for additional power. They love Bloom’s technology, our rapid deployment capability and the flexibility and optionality of our solution. They are actively working with us on design configurations and implementation scenarios. In these interactions, our prospective customers tell us that in the absence of reliable and timely power from the grid, the Bloom Energy solution would be their best alternative. Unlike our sales funnels in other sectors in the past that had mostly single-digit megawatt opportunities, this sector offer tens and hundreds of megawatts per opportunity. Most of the opportunities we are pursuing today are for greenfield data centers, in contrast to the past where we offered a cleaner and more reliable power upgrade to an existing data center facility. Greenfield opportunities inherently have elongated sales and implementation cycles. The market in this sector is rapidly evolving, and we will have better visibility on timing as the year progresses. Over the coming years, I’m very excited about the Bloom solution for data center power and particularly AI data centers, as I see it as the single biggest segment for our growth in the next decade. This opportunity, I highlighted for data centers, carries over to other energy-intensive industries and service operations that require reliable power, such as semiconductor manufacturing, electric charging of bus, van and car fleets, and environmentally-controlled warehouses. We are in various stages of commercial engagement with prospective customers, and I see great potential to convert some of this interest to bookings this coming year. Let me now comment on our innovative product offerings. In the second half of last year, we announced our combined heat and power CHP offering. This product offering can provide net-zero steam to process industries that are looking to lower their carbon intensity. Alternatively, using this team to create net-zero cooling will be a huge economic and environmental benefit to data centers. We are also seeing a strong interest for our CHP offering in Europe. Earlier this week, we announced the Be Flexible offering. This offering has taken our base load solution offering and transformed it to meet a customer’s varying load. For utilities that need reserve power or for data centers whose power usage varies, the Be Flexible offering provides up to 50% cost savings, 50% carbon reduction at reduced load, and more than 5 times faster power ramp than legacy solutions such as diesel generators and gas turbines. My team is working with several power companies to use the Be Flexible solution in front of the meter. On the international side, let me take a moment to talk about Korea. Five years ago, we started in Korea with our partners SK ecoplant and SK D&D. We had a shared sense of purpose and goals. We knew that together, we could grow and build a great business in Korea. In the last five years, Bloom has sold over $4 billion of product and service to the Korean market and established Bloom SK as the market leader in fuel cell power generation. We are positioning ourselves to sell over $4 billion of product and service in the coming four years. We are engaged as partners in the demonstration and deployment of hydrogen-based energy servers and hydrogen electrolyzers in Korea. They are also partnering with us to open up new markets in other countries. In 2023, we had to hit a pause in the deployments to adapt to the new policy and procurement rules that the Korean government enforced in the middle of the year. While that created a lowering of our sales to Korea in second half of 2023 and a slow start in first half of 2024, they are back on track, and we expect a strong business in Korea in the second half of 2024 and in the future. For us, Korea is a model and global leader of energy policy progress and commercial adoption. We are bullish about our future in the Korea market. We hope to replicate it in other markets around the world. Outside of Korea, under Tim Schweikert’s leadership, we have opened five international markets and have our pilot programs going. He and his team are building a strong pipeline in those countries and confident of opening at least two new global markets. Based on the quality and quantity of the pipeline, we expect our international market to have a strong bookings growth in 2024. At the core of everything we do is our people. We are constantly working to both develop our existing talent and upgrade by adding new talent. Just last week, our CTO, Dr. Ravi Prasher, was elected to the prestigious National Academy of Engineering. It’s a huge honor and well-deserved recognition. Congratulations, Ravi. In January, we were thrilled to welcome Aman Joshi as part of our Bloom leadership team. He joined as our Chief Commercial Officer after a long career in power generation sales. Aman will be responsible to grow our robust sales pipeline with a special focus on converting the opportunities to orders with urgency. Aman, welcome, and over to you for a few remarks. Aman Joshi: Thank you, KR. It’s great to be speaking with you all today. I just want to say a few words. First, I could not be more excited to join Bloom and be part of all the amazing things happening in this company. The pace of innovation and the confidence in our company’s future is palpable among the employees as I walk the floors. In my prior role, I spent over 20 years at General Electric, most recently focusing on gas turbines and power generation. In the past two years, I sold more than 5 gigawatts of generation capacity. At GE, our focus was doing large-scale projects that were complex and incredibly important. As we advance along the energy transition, it started becoming clear that natural gas and hydrogen are going to play a big role in helping decarbonize the world, both in energy and industrial sectors in the coming decade. Gas turbines and reciprocating engines are far less efficient when burning 100% hydrogen. In addition, when they combust hydrogen, there are challenges around NOx emissions. Bloom’s solid oxide fuel cell can solve the hydrogen challenge today and generate zero carbon, zero SOx and zero NOx. This is a game changer. I decided to come to Bloom after seeing the product and realizing that it had arrived at an inflection in its ability to function at scale and be a solution for large, complicated, important and timely projects. Bloom is no longer just about potential, but it’s real now and at scale. Bloom’s energy servers can address the most pressing needs of customers across industries, including data centers, utilities and industrial processes. I’m excited about the pace of innovation here and the flexibility of the product suite. Bloom is a kind of company that can move quickly to develop an application and deliver it to the market. Think about what KR said on CHP and the Be Flexible load-following product. The speed from idea to concept to product at Bloom is remarkable. Its product lead the industry. Just look at the Bloom electrolyzer, which tests have proven is the best and the most efficient in the market. Bloom can solve the big problems that I know exist in the market, and I’m very pleased to now have an opportunity to sell these solutions to the customers that need them. I look forward to speaking with you all further in the Q&A. For now, I’ll turn it over to our CFO, Greg Cameron. Greg Cameron: Thanks, KR, and welcome, Aman. Let me begin with a few highlights about our strong execution in 2023. In the fourth quarter, we achieved revenue of $357 million, non-GAAP gross margins of 27.4%, non-GAAP operating income of $27.4 million and positive CFOA of $122 million. These quarterly results accumulated into strong performance for the full year 2023. We had record revenue of just over $1.33 billion, up 11% versus last year. Our non-GAAP gross margins were roughly 26%, up 280 basis points versus 2022. We delivered on our milestone of positive non-GAAP operating income of $19 million, up nearly $53 million from the prior year. Our backlog for product and service is now over $12 billion, up 21% versus year-end 2022. We entered 2024 with over $745 million in total cash. With those as highlights, let me provide some additional context for our performance. In the fourth quarter, we signed a 500-megawatt volume agreement with SK ecoplant. This is a recommitment of 250 megawatts under our 2021 agreement and a commitment for an incremental 250 megawatts. Under the new agreement, the 500 megawatts will be accepted through 2027, providing visibility for nearly $1.5 billion in product revenue over the next four years and $3 billion in service revenue over the next 20 years. The prior agreement was amended to reflect the implementation of the clean hydrogen portfolio standards in Korea. The new agreement adjusted the timing of deliveries, which reduced 2023 revenue by roughly $160 million versus the prior agreement’s 2023 volume commitment. These deliveries and revenue are incorporated into the $1.5 billion that is expected to be recognized through 2027. As KR shared, global power demand is being driven by electrification, EVs and AI data centers. The world’s current generation, transmission and distribution capacity will be incapable of meeting the additional electricity needs. Our fuel-flexible energy server with enhanced capability of combined heat and power, carbon capture and load following is uniquely positioned to meet the needs today while providing optionality through the energy transition. Clearly, the macro trends are in Bloom’s favor. I’m very encouraged by Aman’s addition to the team. He brings a wealth of experience in the distributed power generation market and rigorous commercial process mindset. Even after just a few weeks in the role, he’s already making significant impacts. Bloom remains committed to the 2025 targets for product margin, service margin and profitability, as well as our long-term revenue growth rate. As we move through the decade, most of the long-term growth will be driven by our power generation solutions. Our electrolyzer and marine products will contribute as those markets evolve. Our 2023 non-GAAP gross margins of 25.8% improved 280 basis points versus 2022. The margin improvement was driven by a 13% reduction in our unit product costs, offsetting a small reduction from pricing mix, resulting in over a 10% increase in our unit product profit. Clearly, our efforts to lower material costs, coupled with automation and increased power output are driving down product costs. In every quarter in 2023, we have achieved double-digit cost reductions versus prior year, and we exceeded our 2023 product cost down target. As we move into 2024, we expect to maintain our double-digit cost reductions. As expected, our fourth quarter results in service improved versus prior quarters as revenues grew, performance payments declined and replacement power module costs reduced. We remain committed to our service business achieving 20% non-GAAP gross margins by 2025. We expect our service non-GAAP gross margins to continue to improve and will be a key driver to increasing our overall non-GAAP gross margins in 2024 and beyond. In the fourth quarter, we had positive CFOA of roughly $122 million, building our total cash balance to over $745 million. In 2023, we made investments in increasing inventory that I would not expect to repeat in 2024. Additionally, I would expect our accounts receivable aging to reduce as we collect from a partner on a large project that has experienced delays. In the fourth quarter, we completed our targeted proactive restructurings. These were focused on managing costs, driving efficiencies and optimizing our performance to ensure that as we grow revenue, our margins can improve and we can generate free cash flow and profitability. As we move into 2024, we’ve consolidated our California stack manufacturing and reduced our operating expenses 19% versus the first half of 2023. A restructuring charge of roughly $7 million was recorded in the fourth quarter that has a pro forma adjustment to our non-GAAP reporting. As we look forward to 2024, we expect to continue to grow our revenues and expand our margins. Based upon our backlog and pipeline, we are targeting revenue of $1.4 billion to $1.6 billion. We expect additional 200 basis points improvement in our non-GAAP gross margins to about 28%. Based on these targeted revenue and margin performance, I would expect our non-GAAP operating profit to be between $75 million to $100 million. Consistent with prior years, second-half revenue should be greater than first half, driven by timing of Korea shipments and some large acceptances. For the first half, I would expect revenue to be up mid-single digits, with improving profitability versus last year. For the first quarter, the range is a bit broad as we have projects that could be accepted in either the first or second quarter. First quarter revenue could be flat to down 20% on a tough comparison as the first quarter 2023 was up nearly 40%. Finally, let me spend a few minutes on my departure from Bloom Energy. The last four years has been an amazing professional journey. I want to thank KR, the Board and the entire Bloom family for their support in allowing me to contribute to Bloom’s success. I’m proud of how we’ve worked together to position Bloom for the future. We’ve doubled revenues, improved margins, strengthened our balance sheet, doubled manufacturing capacity and assembled a strong operating team. The world needs Bloom’s solutions, and I’m confident the Bloom team is poised to continue to deliver. This has been a very hard decision for me, but I look forward to enjoying more time closer to my family. So, while there’s rarely a perfect time for a transition, waiting for one often comes with a personal cost. In the near term, I’ll be focused on ensuring a smooth CFO transition. I am confident in KR and the Board to find the right person to enable Bloom’s continued success. I remain very excited for Bloom’s future. With that, operator, please open the line for questions. Operator: Thank you. [Operator Instructions] Our first question comes from the line of Andrew Percoco of Morgan Stanley. Please go ahead. See also Top 20 Most Valuable Blockchain Companies in 2024 and 15 Top Performing European Stocks So Far in 2024. Q&A Session Follow Bloom Energy Corp (NYSE:BE) Follow Bloom Energy Corp (NYSE:BE) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Andrew Percoco: Hi. Thanks so much for taking the question. Greg, first off, best of luck in your next endeavor, and thank you for your partnership over the last few years. It’s been great. And I guess maybe just to start out, on the AI data center theme, I think the idea around power shortages and bottlenecks is definitely gaining some momentum, and you guys have talked about your technology as a key solution for that end market. KR, it sounds like you’re having a lot of conversations with these tech companies that are pursuing AI. But I guess just given some of these power constraints, I would have thought that there would be a faster pace of development on some of these agreements. So, can you maybe just give me a sense for — or give us a sense for where in the process you are in these conversations and maybe some of the remaining items that need to be negotiated or work through to get these across the finish line? And then, maybe as a separate follow-up, you did allude to some delays in the South Korea market as a driver to downside in your 2023 revenue target. Can you just give us a sense for what’s included in 2024 as it relates to South Korea and how you get comfortable with some of those regulatory changes? Thank you. KR Sridhar: Andrew, thank you so much. I will speak to the AI data centers, and I’ll have Greg talk to the Korea markets, too, so — and we can both add color to that. So look, if I were to just tell you my last three days, having two days of Board meetings and today of earnings call, in addition to that, if I just look at four meetings I’ve had with large data center players, and this is leadership, C-suite CEO levels. And at Bloom, these meetings are about greenfield data centers. And collectively, these four opportunities that I met would add up in terms of a pipeline interest to more than 0.5 gigawatt. So that’s what we are looking at in terms of what we are being told by these customers. And if you just look at chips, whether it is the big chip companies and what their projections are, if you look at TSMC and the fabs and what their projections are and then multiply that by the amount of power they need, these numbers are very real numbers. But unlike what we talked about earlier, these are greenfield data centers. So, as we are speaking to these customers, they’re securing the land, they’re securing their financing, they’re securing their offtakes, they’re trying to get their permits. So, it is taking — it’s an elongated cycle. We expect the second half to be a lot more robust than the first half based on everything we’re seeing. And we could have continued to focus at a huge opportunity cost on the other traditional sectors through which we build our pipeline and gotten to a good first half. But we are fiscally disciplined. We are very deliberate on choosing our opportunities, and we see this as an extremely real opportunity with a great focus. And therefore, we are honed in on it, and very optimistic about where our future is going to be in this area. Greg, do you want to talk about Korea? Greg Cameron: Yeah, sure. And Andrew, thank you for your kind words. I’ve enjoyed the partnership as well. So, on Korea, as the change came in with the clean hydrogen portfolio standard, it was known all the way back to 2021 that this change was coming, and we didn’t know exactly how it was going to impact the market. But at the time, as partners said, if this does impact timing, then we’re going to have to come back to the table, which we did. I think going forward, looking at where the market is and looking at the bidding process that is there, as we go into this year being ’24 and into next year, I think our partners there have a pretty good understanding of how the market is going to play out. And one of the changes that we made to the agreement that we didn’t have before is we now have quarterly minimums in place. Before, we had annual minimums and it left us with some uncertainty as we went through the year. We now have quarterly minimums where we can look at to make sure we’re on track for the year. So I think that was a good change. If I look forward in the market out two, three, four, five, six years, that market is going to continue to expand, and the technologies are actually going to come together. So, you won’t have separate swim lanes for fuel cells versus combustion versus other things. That market is going to continue to grow, both for natural gas as it transitions to hydrogen. And I feel very good about Bloom’s products, both on the fuel cell side as well as the electrolyzer to do really well in Korea. So, I’m really encouraged with that market. I’ve enjoyed my partnership with both ecoplant and D&D very much, and have had the pleasure of spending some time with them over the last few years, and they’ve just been nothing but a great partner. So, we’re really excited about our partnerships there, and we’re excited about the market. Operator: Thank you. Our next question comes from the line of Manav Gupta of UBS. Please go ahead. Manav Gupta: Good morning, guys. My quick question here is the 2024 is a range. Help us understand what could push you towards the top end of the range of $1.6 billion in revenue? And also just a quick clarification. You are very capital disciplined. So, with $75 million to $100 million in operating profit, would that imply a minimum cash burn and very small needs, if any, for any external financing, if you could address those issues? Thank you. Greg Cameron: Yeah. Sure, Manav. It’s Greg. So, listen, when we pulled the plan together for this year, and we looked at it, and this is why a little bit in my script, I talked about being up kind of mid-single digits is where I think the company will be at the midpoint in the year, and that gives us kind of the way we’ve looked at it before, which is the 35% to 40% of our revenue is going to be earned in the first half versus the second half. What’s going to drive us from the lower end of the guide to the higher end of the guide is really on a list of projects that we see both in the U.S., broadly international and in Korea. And my expectation is as we go through the year, we’re going to get more and more clarity around the timing of those projects. I’m very bullish that we’re going to win our fair share of those projects, and they’re either going to fall in late 2024 or early ’25. So, my expectation as we go through the year, it’s not so much will we have the projects, it will be the timing of those projects. But our full expectation, my full expectation for Bloom is that it will leave 2024 with a bunch of commercial momentum, both in winning deals as well as delivering on systems, and that would drive us to the higher end of the range, I’m hopeful. On the question around cash burn, listen, the metric that I look at, right, is the EBITDA metric. And that says, is the company burning cash on running itself? And we’ve been positive on EBITDA over the last couple of years. So, our CFOA usage has been more around investing in inventories and other things preparing for the growth in those systems. And I don’t expect to change the view on the inventory levels year-over-year, where we grew them significantly from ’22 to ’23. I would not expect a similar level of growth next year. It was really a way to make sure that we had the business position going forward. If that was the case, that would say you have more opportunity to generate cash in that CFOA bucket than not because you’re not investing in the working capital. As I think about the capital needs for the company, one thing that’s going to be out there that we’re going to need to think about is the 2025 $220 million convert will come current in August. It’s not coming due until August of 2025. But that will be something that the company can be opportunistic around when it chooses to address that. And with our cash balances and that value of $220 million, we could easily pay that off if we chose. So, I think the company has a lot of options on when and how it addresses those capital needs. Operator: Thank you. Our next question comes from the line of Dushyant Ailani of Jefferies. Please go ahead. Dushyant Ailani: Thank you for taking my questions. I wanted to quickly just talk about thoughts on electrolyzer sales going into 2025. I know that you guys mentioned you’re optimistic on that. But I think just given some delays in FIDs in LSB, I just wanted to get your thoughts there. KR Sridhar: So, this is KR, and I’ll have Greg add some additional comments to that. Look, we have shown ’26 and beyond as there’s going to be meaningful electrolyzer revenue. We think that’s still a possibility. Let me walk you through the few things that we’re looking at right now. As we have told you, we have publicly mentioned in four of the seven hubs, we’re working with some other hubs too, but let’s just talk about the four hubs. These projects are in the pre-FEED engineering right now as we speak, and Bloom is supporting those projects as an OEM. But as you very well know, winning the money for the hub on an 80-20 rule is the 20 side. The 80% of whether these go to FEED and beyond is going to depend on the regulations that come on the production tax credit from the DOE. That’s what’s going to drive it. So, as we sit here, we are supporting those. But the delays in the PTC is going to delay those implementations as we see it. But we are ready, able and willing to support those things, number one. If you look outside of the U.S. right now, we are in pre-FEED studies in multiple geographies, including Europe, Middle East and Australia, and we are like working on those. And if you look at our project of demonstrating with a nuclear power plant with Xcel Prairie Island, we have already shipped our unit. Now, it’s with the customer who is going to integrate it and start running it. If you look at our INL project with Idaho National Lab, they can’t stop saying enough good things about us. That unit we shipped out there is working extremely well, not just performing but exceeding expectations. So that’s a summary of our electrolyzer program. Greg Cameron: Yeah. I think here’s what I’d add is, in addition to that, right, our technology is the most efficient on the market today, and we have over 2 gigawatts of capacity. What you get with Bloom is optionality. So, we see in the near term, and we’ve always talked about this with our long-term growth rates, the majority of the short-term growth is going to be driven by our core power generation projects — product. Now, what’s great about that is we are building out all of the manufacturing capacity, the supply chain, the automation, driving down the cost around our stacks and columns, and it’s the same product, whether we put it in as a fuel cell or as an electrolyzer. So, we are learning every day on how to drive that cost curve down, and we’re not waiting for that. As well as every day, we get 1 billion data points coming in and how those stacks and columns are performing in the field. So, while we wait for the market to evolve, and it will evolve, and when it does, we think we have a great product that’s going to have really high efficiencies, and we will be ready to manufacture it for our customers. But in the meantime, with Bloom, what you get, it’s amazing optionality because we’re not waiting on that market to develop. We still have a company last year that generated $1.33 billion in revenue as it built out the business. Operator: Thank you. Our next question comes from the line of Pavel Molchanov of Raymond James. Please go ahead......»»

Category: topSource: insidermonkeyFeb 16th, 2024

Sonoco Products Company (NYSE:SON) Q4 2023 Earnings Call Transcript

Sonoco Products Company (NYSE:SON) Q4 2023 Earnings Call Transcript February 15, 2024 Sonoco Products Company isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day and thank you for standing by. Welcome to the Fourth Quarter 2023 Sonoco’s Earnings Conference […] Sonoco Products Company (NYSE:SON) Q4 2023 Earnings Call Transcript February 15, 2024 Sonoco Products Company isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day and thank you for standing by. Welcome to the Fourth Quarter 2023 Sonoco’s Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Lisa Weeks, Vice President of Investor Relations. Please go ahead. Lisa Weeks: Thank you, operator and thanks to everyone for joining us today for Sonoco’s fourth quarter and full year 2023 earnings call. Joining me this morning are Howard Coker, President and CEO; Rob Dillard, Chief Financial Officer; and Rodger Fuller, Chief Operating Officer. Last evening, we issued a news release highlighting our financial performance for the fourth quarter and full year, and we prepared a presentation that we will reference during this call. The press release and presentation are available online under the Investor Relations section of our website. As a reminder, during today’s call, we will discuss a number of forward-looking statements based on current expectations, estimates, and projections. These statements are not guarantees of future performance and are subject to certain risks and uncertainties. Therefore, actual results may differ materially. Please take a moment to review the forward-looking statements on Page 2 of the presentation. Additionally, today’s presentation includes the use of non-GAAP financial measures, which management believes provides useful information to investors about the company’s financial condition and results of operations. Further information about the company’s use of non-GAAP financial measures, including definitions as well as reconciliations to GAAP measures is available under the Investor Relations section of our website. For today’s call, we will have prepared remarks regarding our results for the quarter and 2023 and outlook for the first quarter and full year 2024, followed by a Q&A session. If you will turn to Slide 4 in our presentation, I will now turn the call over to our CEO, Howard Coker. Howard Coker: Thank you, Lisa and thanks to all of you for joining our call this morning to review our 2023 results and 2024 outlook. In 2023, we continue to make progress on strategic initiatives and delivered solid results in what was a pretty difficult year from a volume perspective. Despite these lower volumes, we delivered strong EBITDA margins of 15.7%, which is somewhat similar to last year. Our strong margins were the result of record performances in our consumer rigid paper cans and flexibles businesses. On the industrial side, despite volume level similar to 2008, our team delivered record profit margins through diligent cost management throughout the paper ecosystem. Our adjusted earnings of $5.26 were within our guidance range for the year and with intentional focus on working capital, we generated record operating cash flow of $883 million and free cash flow of $600 million for the year. We also returned capital to shareholders and increased our annual dividend for the 40th straight year. We completed acquisitions and divestitures according to plans and our teams did not skip a beat on executing initiatives to further strengthen our foundation. I want to close 2023 by thanking this incredible team of Sonoco for the resiliency and dedication throughout the year. Certainly, the global economic and external factors did not make this an easy year at all, but we did not stand still and we delivered the second best annual financial performance in the company’s 125-year history. I’m grateful to work alongside these great people of Sonoco, as well as our customers and supplier partners and we continue to look to the future with optimism. And with that, I’m going to turn the call over to Rob to cover our financial results and outlook. Rob? Rob Dillard: Thanks, Howard. I’m pleased to present the fourth quarter and full year 2023 financial results, starting on page six of this presentation. Please note that all results are on an adjusted basis and all growth metrics are on a year-over-year basis unless otherwise stated. The GAAP to non-GAAP EPS reconciliation is in the appendix of this presentation, as well as in the press release. As Howard said, 2023 was a record year for Sonoco. In 2023, we achieved the second best financial results in the company’s 125-year history in key metrics such as net sales, adjusted EBITDA and adjusted EPS. By many measures, this was our best year ever. We achieved record operating cash flow, record free cash flow, record productivity and we invested a record amount to drive future growth and profitability. We’ve built a foundation for continued strong financial performance, building on our enduring operating model, strong market positions, investment-grade balance sheet and our differentiated dividend. We’re excited about the future and feel good that 2023 was a year to solidify our improvement since 2021. Full year 2023 net sales decreased to $6.78 billion, due to the volumes that comes from destocking and consumer and an elongated cycle in industrial. While these factors impacted year-over-year results, we grew net sales at a 10% compounded annual growth rate since 2021, due to strategic pricing, new product wins and acquisitions. Adjusted EBITDA grew $297 million from $770 million in 2021 to $1.067 billion in 2023. Over $150 million of this increase was organic improvement due to strategic pricing and productivity. Adjusted EBITDA margin was 15.7% in 2023, a 190 basis point increase from 2021. We achieved strong profitability due to price cost in 2022 and retain this profitability in 2023 due to record productivity of $109 million. We are operating with agility and continue to match cost controls with productivity investments. 2023 GAAP EPS was $4.80 and adjusted EPS was $5.26, which was within our guidance range of $5.25 to $5.40. On page 7, we have our results for Q4 2023. Net sales decreased 2% to $1.64 billion. Volumes were lower 3.4% due to low single-digit volume declines in both consumer and industrial and price was negative 2.3% due to negative index-based pricing. Adjusted operating profit decreased to $167 million, adjusted EBITDA decreased to $236 million and adjusted EBITDA margin was 14.4%, a 20 basis point decrease from 2022. Q4 was an incredibly strong quarter operationally. We managed variable demand and generated record productivity of $49 million. This translated into a 180 basis point increase in gross profit margin. These operating profit results were offset by SG&A items that we consider infrequent in their magnitude, including higher employee expenses, health care and accounts receivable reserves. GAAP EPS was $0.82 and adjusted EPS was $1.02 within our guidance range of $1.01 to $1.16. Tax was a $0.06 drag on the quarter as the tax rate increased to 25.7% due to actions to repatriate cash. It’s notable that without the specific higher SG&A items and tax items, we would have achieved at least the midpoint of guidance. Page 8 has our sales and operating profit bridges for the quarter. Net sales declined to $1.64 billion due to negative volume mix and negative price Volume mix was negative $20 million in the quarter as consumer continues to be impacted by inflationary pricing at retail and industrial continues to reach a cyclical low. Price was negative $39 million. We continue to achieve strong results from our strategic pricing program. Negative price was a result of deflation in index-based prices in resin, metal and paper-based businesses. Next on this page we have the adjusted operating profit bridge. Adjusted operating profit was driven by negative volume mix and negative price cost with strong productivity benefiting results. Volume mix was negative $10 million, price/cost was negative $14 million as positive price cost in consumer and all other was offset by negative price cost in industrial. Productivity was positive $49 million as we achieved positive manufacturing productivity due to our lean programs and positive fixed cost productivity due to continued efforts to reduce our plant footprint and optimize supply chains. Other was negative $42 million due to employee expenses, healthcare and accounts receivable reserves. These expenses are not expected to repeat in this magnitude. Page 9 has our segment results for the quarter. Consumer sales decreased 3% to $856 million. Consumer volumes decreased low single digits due to customer inventory management and the impact of inflationary pricing. Many consumer customers are beginning to return to historical pricing practices, including discounting. However, volumes have been slow to return to typical patterns. Rigid Paper Containers sales declined low single digits due to mid single-digit volume declines offsetting positive price. Flexible sales were flat as new customer gains offset low legacy customer volumes, Metal Packaging sales decreased mid-single digits due to low single-digit volume declines and negative index-based price actions. Demand from our core customers in Metal Packaging has strengthened, but overall demand declined due to anticipated template-based price reductions in 2024. Consumer operating profit decreased to $83 million as $23 million of productivity and $17 million of price cost was offset by volume mix and SG&A, a meaningful component, of which we do not expect to repeat in this magnitude. Consumer operating profit margin was flat at 9.7%. Industrial sales decreased less than 1% to $593 million. Industrial volumes decreased low single digits due to lower demand in most key markets and geographies. Industrial prices decreased mid-single digits due to index based pricing actions. We continue to achieve strategic pricing, but were impacted by declining paper indices and increasing OCC. OCC increased to $92 per ton from $38 per ton in 2022. Industrial operating profit decreased to $62 million, due to $36 million of negative price cost offsetting $20 million of productivity. Industrial operating profit margin remained at a historically strong 10.4%. We’re protecting margins with strategic pricing and with cost actions to reduce fixed costs. The business is well-positioned to benefit from a return to normalized volumes. All other sales decreased 7% to $187 million due to broad volume declines, while other operating profit increased to $22 million due to strong productivity and positive price cost. Moving to Page 10. Our capital allocation framework aligns with our business strategy to drive value creation through earnings growth and improved margins. In the fourth quarter we generated operating cash flow of $267 million. We invested $108 million of this cash and capital expenditures to fund our growth initiatives and improve margins. Results from these investments are translating into improved productivity and growth with new customers and new products. Further, we remain focused on increasing the dividend, which are present at $0.51 per share on a quarterly basis or a 3.5% annualized yield based on our current share price. Next, we paid off $172 million of debt in the quarter and reduced our net debt to adjusted EBITDA to 2.8x. We’ll continue to be disciplined and improve our liquidity and access to capital. This is key to our strategy as we continue to have a proactive M&A strategy focused on executing the right deals based on strategic fit, scalability, financial profile and cultural fit. We’re being disciplined in a disrupted M&A market and we’ll do the right acquisitions and divestitures at the right time for us. Page 11 has our guidance for Q1 and full year 2024. Guidance for 2024 adjusted EPS is $5.10 to $5.40. This guidance is based on low single-digit volume growth, consumer volumes are expected to grow low single-digits, while industrial volumes are expected to experience only limited recovery. Price cost is expected to be meaningfully negative due to contractual resets in consumer and the impact of timing and pricing lives on industrial. Another meaningful input to guidance is a $32 million increase in depreciation. We expect to grow adjusted EBITDA in 2024, and are guiding to a range of $1.05 billion to $1.1 billion. Operating cash flow guidance is $650 million to $750 million, working capital is expected to be a $100 million to $150 million use of funds, as we invest in inventory and receivables to assess supply chains and enable volume growth. Guidance for our capital expenditures is $350 million. We have increased the proportion of capital expenditures focused on long-term growth and profitability projects. This investment is expected to drive record productivity in 2024 and beyond. Guidance for Q1 2024 adjusted EPS was $1.05 to $1.15. We’re expecting modestly negative volume in consumer, as our customers remain cautious. Consumer price cost is expected to be negative due to contract pricing resets. Industrial volumes are not expected to improve in Q1. Industrial price trends are improving, but price cost is expected to be meaningfully negative on a year-over-year basis, due to last year’s low OCC comparative and last year’s higher tan bending chip comparative. Now, Roger will further discuss the outlook for the business. Rodger Fuller: Hi. Thanks, Rob. If you please turn to Slide 12 for our view of segment performance drivers in 2024. Let me start with our first quarter outlook. In the Consumer segment, we expect volume to be up sequentially over the fourth quarter, but basically flat year-over-year from continued lower consumer spending due to retail price inflation. In rigid paper containers, we see volumes slightly down in North America versus a strong start last year, flat in Europe and some nice year-over-year sales growth in the rest of the world from new product launches and our expanded capacity in South America and Asia. Organic flexible volumes are projected to be flat to down slightly due to continued softness in our base soft baked goods and confection business, but aided in the first quarter from the benefit of the Inapel acquisition in Brazil. In our Metalpack business, we did see a recovery of our steel aerosol business in the fourth quarter, offset by some softness in food. In the first quarter of 2023, we expect low- to mid single-digit increases in both food and aerosol bottle cans. In the Industrial segment, volumes are up sequentially from last quarter, but down low single digits year-over-year with weakness primarily in Europe and Asia, as many of our end markets are tied to consumer staple and durable spending and inflationary factors that have slowed spending. We do expect higher paper mill utilization in the first quarter in our global paper system driven primarily in North America. During the first quarter, there will be an outsized impact from negative price cost as input costs continue to rise and the timing of pricing updates lag. We expect the impact of negative price cost to improve over Q1 levels as we move throughout the year. Productivity remains strong as our team is effectively managing costs throughout our renewal and converting systems. In the All Other segment, volumes continue to remain soft with price cost offsetting some impact of the lower volumes. Now, turning to the full year 2024 guidance. We expect consumer volumes to be up low single digits and productivity remains strong. We’re anticipating relatively stable material pricing and supply chain performance, but do expect consumer price cost for the year to be negative from contractual pricing resets, somewhat offset by productivity. In industrial, we’re not projecting volume recovery in the first half of the year. We also expect price cost to remain negative from index-based pricing and higher input costs, which will be weighted to the first half of the year. As you know, we’ve announced price increases in North America on both URB paper and converted products effective February 1, and these increases are progressing well. The team continues to do an excellent job of expense management and we expect productivity and manufacturing efficiencies will offset negative volume impacts. And lastly, in all other, we anticipate fairly stable demand across the businesses and good productivity to continue throughout the year. So overall, we remain, I believe, appropriately conservative on volume recovery across the segments with good productivity and cost control in place until we see volume recover. With that, back to you, Howard. Howard Coker: Great. Thanks, Roger. As I stated in my opening remarks, we are not standing still as we progress a robust set of plans and initiatives across the enterprise. And I thought, I’d just share a few of those with you. First, on the divestiture and closure front, we continue to execute our portfolio transition and footprint optimization activities. Last week we announced the closure of our Sumner, Washington URB paper mill. This was the oldest mill in Sonoco’s North American network and the cost to recapitalize was just simply not feasible. We’re moving tons to lower-cost mills in the network. We’ve owned Sumner for over 40 years and extremely grateful for the support of this team through these years. We also announced the expected sale of our Protective Solutions business from our all other category or segment, which should close in the first half of 2024. This has been a great business for Sonoco with great leadership team. We know their knowledge and skills will serve them well into the future. As we continue our portfolio resolution, we remain laser focused on simplification and the alignment and fit to what businesses remain in our core. Secondly, we’re pleased to announce that we were recognized by Kellanova for designing, manufacturing and commercializing a paper bottom end for our rigid paper cans with Pringles to achieve sustainable and recyclable initiatives in Europe. This was a multiyear and a true partnership effort. We’re pleased with the acceptance of our innovative package design in the marketplace, and we look forward to sharing more about this next week at our Investor Day. In December, we’re also pleased to announce the acquisition of Inapel, one of the leading flexible packaging company space in Brazil. This is a strategic move to expand capacity for growing demand that we are feeling in Brazil where Sonoco is now the number two in this market. We welcome the Inapel team and know that our aligned culture, values and technical capabilities make this a winning combination. We’ve also taken steps this year to further align our flexible and thermoforming businesses into one larger scaled platform. We will be providing more details on this next step in our portfolio next week. In summary, I’d just like to leave you that Sonoco continued steady performance across our businesses. We wish volumes were better, but we are well-positioned and ready to take advantage of incremental demand upticks across the portfolio. Now if you’ll turn to slide 15, I will wrap things up by saying we are looking forward to our Investor Day one week from today in New York in February — what is the date of the Investor Day? February 22, the next week. During this meeting we will provide updates on our transformation operations or business unit plans and share thoughts on our longer-term financial outlook. We look forward to hosting you live or virtually next week. So at this time I’m more than happy — we are more than happy to answer any questions that you may have. I’ll turn it back over to the operator. Operator: [Operator Instructions] And our first question comes from George Staphos with Bank of America Securities. Your line is open. See also 20 Fastest Growing E-Commerce Companies in 2024 and Top 30 Developing Countries in the World in 2024. Q&A Session Follow Sonoco Products Co (NYSE:SON) Follow Sonoco Products Co (NYSE:SON) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. George Staphos: Hi. Thanks very much. Good morning, everybody. Thanks for the detail. I’ll ask three questions. First question related to guidance. Can you talk through what is baked in for price/cost for the year recognizing there are no guarantees in life? And how much of the URB and converted product increases in industrial are baked into that guidance? Relatedly, what is the effect of the divestiture of Protective Solutions within All Other relative to your guidance? And then last for me Howard, one — I know you’re going to talk more about it next week but why the integration of flexibles with thermoforming recognizing they’re plastic-based they are somewhat different business processes. And what should we have baked in for productivity from that and broadly for the year? Thank you. Howard Coker: Right. Thanks, George. I’ll turn over the more financial related to Rob. Yes, we’ll talk in more detail next week about the combination. And I think you’ll see the rationale and why we view this as an obvious combine of the two – you just at a very high level I can just say that synergistically, it makes a lot of sense. And then if you look at the markets that we serve and the customers we share and there’s more beyond that. So I’m going to leave that where it is and we’ll get into that with next week. Rob, do you want to talk about price cost and… Rob Dillard: Yes George. That’s a good question because price cost is going to be a meaningful driver for profitability – a meaningful factor for profitability in 2024. I’d say in Q1, we’re anticipating that number to be between $0.50 and $0.55 of drag. We’ve said previously that Industrial was going to have $35 million of price cost in Q1 and we’re expecting to see that. To your point on URB and price recovery there, we have continued to see OCC increase Tan Bending Chip is kind of held constant we’re feeling really good about how that price is translating through the market but that’s something that actually takes a fair amount of time to really translate through to the P&L. So there’s a bit of a drag there. Overall, we do think that industrial price cost will continue to be negative going into the second quarter and we’re hopeful for some opportunity in the second half of the year. George Staphos: Okay. And then just – protective? Rob Dillard: Yes. So Protective, we haven’t closed the deal. We’re expecting to close. We have a great counterparty there. We feel really good about that transaction on a gross basis. That divestiture would be $0.10 dilutive to EPS on a full year basis. So we are expecting to close that by the end of Q1 and have some visibility to that and it’s not in the $525 million of guidance. George Staphos: Okay. And the productivity for the year? Rob Dillard: Productivity of the year. We had a great year this year. Obviously, we continue to invest behind that we see. We’ve got a better path forward this year than we did last year I would say. So we’re expecting to have another record year. George Staphos: Thank you very much. Operator: Our next question comes from the line of Anthony Pettinari with Citi. Your line is open. Anthony Pettinari: Good morning. Rob Dillard: Good morning. Anthony Pettinari: Good morning. You’re expecting consumer volume growth in I think the mid-single-digit to high single-digit range quarter-over-quarter in 1Q. And I’m just wondering is it possible to maybe parse that out between – and does that just reflect sort of typical seasonality? Or is there some end market demand improvement or deterioration or any destocking or anything just wondering if you can kind of parse that out between those drivers. Rodger Fuller: No, Anthony, it’s Rodger. Consumer for the first quarter is basically flat year-over-year. So you’ve got slightly down in rigid paper containers versus a strong start last year in North America, basically flat to slightly negative flexibles. And again, as our base business, cookies, confectionery being soft, offset by some of the Brazil acquisition. Metal cans is actually projected to be up low to mid-single digits and we started in that way. And in plastics, up slightly. So you put it all together, Anthony is basically a flat volume for the first quarter. For the year, we do see that low single-digit growth for the year. And that’s just recovery in some of our base business with some share that we’ve gained in flexibles some new products and flexibles and a good result. We’re very hopeful on this combination between flexibles and thermal forming. So first quarter flat, mid-single digit — mid to low single digits for the year with some recovery in our base business. Howard Coker: Yeah. And I said we’re also cautiously optimistic as we see our customers starting to market more, you’re seeing more discounting actions. So the expectation is that through the course of the year, we’ll start seeing some improvements as Rodger just said. Anthony Pettinari: Okay. That’s very helpful. And then in Metal Pack, I’m sorry if I missed this, but would you expect full year volumes to be flattish or maybe slightly up or slightly down. And then I’m just curious on aerosol, another packager has discussed aerosol potentially being under some pressure due to cost and ESG concerns. I’m wondering if you’re seeing anything similar to that. And then just broadly if I think about the composition of Metal Pack between food cans, aerosol and maybe closures. How that business has changed or if you’ve kind of shifted the mix around since you acquired it? Howard Coker: Yeah. No, of course, long shelf life destocking has carried a little bit further than you normally would expect against our portfolio. What we’re seeing right now and we’re expecting and what we’re hearing from our customers and how the year started, we’re actually looking at a net being up year-over-year call it low to mid-single digits. Aerosol in particular is actually on the favorable side of that. If you look at the fourth quarter alone, year-over-year aerosols were actually up mid to low single digits and food was slightly down. So pretty pleased with what we’re seeing in terms of recovery from a volume perspective with a pretty weak, very weak start to last year. But very, very understandable. Again considering the long shelf life associated with these products. So pretty bullish about volume recoveries as we start the year as we finish out January and as we look into next year and as we finished last year in the fourth quarter. Anthony Pettinari: Okay. That’s very helpful. I’ll turn it over. Operator: Our next question comes from the line of Ghansham Panjabi with Baird. Your line is open. Ghansham Panjabi: Thanks. Good morning, everybody. I guess going back to the Industrial segment, looking at the margins in the fourth quarter. This was the first quarter of year-over-year margin decline since the first quarter 2021. Just curious to your thoughts on the evolution from here and I know there’s a lot going on with OCC and just the index-based pricing pass-through, et cetera. I would just love to hear your thoughts as it relates to 2024? Rodger Fuller: Ghansham this is Roger. As we look at the margins for the first quarter industry, looks basically flat to the fourth quarter. We are seeing — as we’ve already said this will be our largest impact, negative impact on price cost, but we are also seeing recovery in our paper meal system primarily in North America. Our global URB system ran about 87% capacity in Q4. But our North American URB capacity was close to 92% in Q4, and we expect that to move up into the mid-90s in Q1 with increased demand, as well as the move we made on the Sumner mill. So we expect, yes, negative price cost, but we also expect better productivity through capacity utilization and our biggest part of our URB system, which is north of there. Howard Coker : And I would add that I think the acceptance of the price increase effective mid-quarter, mid-first quarter has been positive. Rodger Fuller : Yes. I think as you know we’re about 60% weighted to the resi tan bending index about 20% related to OCC and 20% open market. So, obviously, we’re going off to the open market now. But as Rob mentioned, the 60% weighted to tan bending will impact more the second quarter than the first. Ghansham Panjabi : Okay. That’s helpful. And then back to the consumer business just volume weakness being persistent over the last several quarters. It’s not just you. It’s a peer group in terms of destocking, et cetera, that’s impacted the supply chain. Can you just sort of characterize the competitive backdrop, as we kind of progress through this lower for longer sort of volume weakness paradigm and you have a bunch of different businesses within consumer? And I just would love to hear your thoughts as it relates to just the competitive backdrop in context of an industry that’s typically very competitive anyway? Howard Coker : Yes. I mean we feel really good. I mean, from a share position perspective, I’m not aware of any material share loss. So, in fact, I’ve probably got a longer list of share gains. They’re just not overcoming the overall segment, consumer segment situation and demand profile. Frankly, if you — as we talk about volumes and it’s across all our businesses through the year, and then you flip over and look at the productivity performance, and I thought about this before, we’ve invested extremely heavily in all our businesses in the core and are continuing to see our productivity increase. And as volumes do recovery and leverage starts really materializing or normalizing within our facilities. I’m pretty bullish about how we can convert that into even higher productivity than we’ve been seeing thus far. But no from a share position, we’re in good shape from a share position as far as I’m concerned. Ghansham Panjabi : Thank you. Operator: Our next question comes from the line of Gabe Hajde with Wells Fargo. Your line is open. Gabe Hajde : Howard, Roger, good morning. I wanted to revisit the integration that George initially asked about of flexibles with thermal forming. And just bigger, I guess, picture context around you guys, I think, you’ve talked about trying to build a franchise position in rigid metal packaging. And curious if this move changes that perspective. You guys have talked about the sustainability attributes of origin metal packaging? And then maybe if anything changes from your perspective? And is there further risk your outlook especially in the tinplate business given the announcement this morning from Cliff to Idle a facility here in North America......»»

Category: topSource: insidermonkeyFeb 16th, 2024

Here"s Why Coca-Cola (KO) Looks Poised for Earnings Beat in Q4

Coca-Cola's (KO) Q4 results are expected to reflect gains from strong revenue growth across operating segments, aided by an improved price/mix and higher concentrate sales. The Coca-Cola Company KO is expected to register top-line growth when it reports fourth-quarter 2023 numbers on Feb 13, before the opening bell. The Zacks Consensus Estimate for the company’s fourth-quarter revenues is pegged at $10.6 billion, suggesting 5% growth from the prior-year quarter’s reported figure.For fourth-quarter earnings, the consensus mark is pegged at 48 cents, indicating 6.7% growth from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days.For 2023 earnings, the Zacks Consensus Estimate is pegged at $2.68 per share, suggesting 8.1% growth from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days. The consensus estimate for the company’s 2023 revenues is pegged at $45.5 billion, implying 5.8% growth from the prior-year quarter’s reported figure.In the last reported quarter, the leading soft drink behemoth’s earnings beat the Zacks Consensus Estimate by 7.3%. The company has delivered an earnings surprise of 5.1%, on average, in the trailing four quarters.CocaCola Company (The) Price and EPS Surprise  CocaCola Company (The) price-eps-surprise | CocaCola Company (The) QuoteKey Points to NoteCoca-Cola’s performances in recent quarters have been benefiting from strategic transformation and ongoing recovery around the world. The company’s fourth-quarter performance is expected to have gained from revenue growth across its operating segments, aided by an improved price/mix and an increase in concentrate sales. Underlying share gains in at-home and away-from-home channels are also expected to have bolstered the performance.The company’s volumes in the fourth quarter are expected to have benefited from the ongoing recovery in markets. Category-wise, volumes have been benefiting from growth in trademark Coca-Cola; sparkling flavors; the nutrition, juice, dairy and plant-based beverages; and hydration, sports, coffee and tea categories.Our model predicts year-over-year organic revenue growth of 8.8% for the fourth quarter, mainly driven by 6.9% growth of the price/mix and a 1.9% rise in concentrate sales volume. Consequently, reported revenue growth is expected to be 3.9%. For 2023, our model estimates organic revenue growth of 10.7%, with a 9.3% rise in price/mix and a 1.5% increase in concentrate sales.Coca-Cola’s fourth-quarter and 2023 results are likely to reflect gains from innovations and accelerating digital investments. The company has been witnessing a splurge in e-commerce, with the growth rate of the channel doubling in many countries. KO has been accelerating investments to build strong digital capabilities. It has been consistently strengthening consumer connections and piloting various digital initiatives through fulfillment methods to capture online demand, which is likely to have boosted fourth-quarter sales.However, KO has been witnessing inflationary cost pressures, related to higher commodity and material costs, as well as higher marketing investments. The elevated commodity costs have been hurting the company’s cost of goods sold (COGS). The pressures from input cost inflation and other costs are likely to have hurt the company’s performance in the fourth quarter.On the last reported quarter’s earnings call, management anticipated inflationary cost pressures to impact several aspects of the business in 2023, including input costs, transportation, marketing and operating expenses. KO expects impacts of a mid-single-digit percentage from commodity price inflation on the comparable COGS for 2023. Our model predicts a 1.9% year-over-year increase in the cost of products sold in the fourth quarter and a 3.1% year-over-year rise for 2023.Coca-Cola has been investing in its markets and brands to support sales growth, with higher spending on consumer-facing activities. The company has been significantly increasing its marketing investments to engage and retain existing consumers, and attracting new ones. This has led to increased marketing investments in the past few quarters. Rising marketing spending is expected to have led to increased selling, general and administrative (SG&A) expenses in the fourth quarter and 2023.Our model predicts SG&A expenses of $13.8 billion for 2023, suggesting year-over-year growth of 6.8%, mainly driven by a continued rise in marketing expenses. We estimate SG&A expenses to increase 4% year over year in fourth-quarter 2023. As a percentage of sales, we expect adjusted SG&A expenses to increase 40 basis points (bps) and 50 bps, respectively, in the fourth quarter and 2023.On the last reported quarter’s earnings call, the company expected adverse currency rates to hurt fourth-quarter comparable revenues by 4% and comparable earnings per share by 8%. The company also expects currency headwind to impact comparable revenues by 4% and comparable earnings per share by 6% in 2023. Additionally, revenues are expected to reflect a 1% negative impact of acquisitions, divestitures and structural changes in the fourth quarter and 2023. Our model estimates revenues to be impacted by currency headwinds of 4% each in the fourth quarter and 2023.Zacks ModelOur proven model conclusively predicts an earnings beat for Coca-Cola this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Coca-Cola has a Zacks Rank #3 and an Earnings ESP of +0.70%.Other Stocks With Favorable CombinationHere are some other companies you may want to consider, as our model shows that they also have the right combination of elements to deliver an earnings beat.Molson Coors TAP currently has an Earnings ESP of +2.72% and a Zacks Rank #2. The company is expected to register top-line growth when it reports fourth-quarter 2023 numbers. The Zacks Consensus Estimate for TAP’s quarterly revenues is pegged at $2.8 billion, which suggests growth of 5.4% from the prior-year quarter’s reported figure.You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Molson Coors’ quarterly earnings has moved down by a penny in the past 30 days to $1.12 per share. The estimate suggests a 13.9% decline from the year-ago reported quarter. TAP has delivered an earnings surprise of 41.3%, on average, in the trailing four quarters.Dutch Bros BROS currently has an Earnings ESP of +9.38% and a Zacks Rank #3. BROS is anticipated to register top-line growth when it reports fourth-quarter 2023 results. The Zacks Consensus Estimate for Dutch Bros’ quarterly revenues is pegged at $254.8 million, indicating growth of 26.3% from the figure reported in the prior-year quarter.The Zacks Consensus Estimate for Dutch Bros’ earnings has moved down by a penny in the past 30 days to 2 cents per share. The consensus estimate suggests a 33.3% decline from the prior-year quarter’s reported figure. BROS has delivered an earnings beat of 57.1%, on average, in the trailing four quarters.Monster Beverage MNST has an Earnings ESP of +1.65% and a Zacks Rank #3 at present. MNST is likely to register top and bottom-line growth when it releases fourth-quarter 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.8 billion, which suggests growth of 15.9% from the figure reported in the prior-year quarter.The Zacks Consensus Estimate for Monster Beverage’s quarterly earnings has been unchanged in the past 30 days at 39 cents per share, suggesting growth of 34.5% from the year-ago quarter’s reported number. MNST has delivered an earnings surprise of 1.9%, on average, in the trailing four quarters.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for 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 CocaCola Company (The) (KO): Free Stock Analysis Report Molson Coors Beverage Company (TAP): Free Stock Analysis Report Monster Beverage Corporation (MNST): Free Stock Analysis Report Dutch Bros Inc. (BROS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksFeb 8th, 2024

Biden To Announce Billions In New Chip Subsidies

Biden To Announce Billions In New Chip Subsidies Two years after Biden's $53BN CHIPS act did nothing at all to boost the US semiconductor industry - which has instead enjoyed a hope and hype-driven supercycle thanks to the general public's relentless and erroneous fawning over chatbots and AI which, if successful, will leave hundreds of millions unemployed  - here comes the president with the inevitable double down. According to the WSJ, the Biden administration is expected to soon award billions of dollars in new subsidies to Intel, Taiwan Semiconductor and other top semiconductor companies to help build new factories, as part of a push to highlight the administration's "signature economic initiative" as elections approach. Intel CEO Pat Gelsinger holds a semiconductor chip during a Senate hearing in 2022; Photo: Zuma Press The grants are part of the $53 billion Chips Act, which intended to reshore production of advanced microchips and fend off China, which is fast developing its own chip industry. However, as noted above, the 2022 bipartisan law has seen virtually no uptake, leaving many frustrated with the slow pace of implementation. While more than 170 firms have applied, to date just two tiny grants have been made, to makers of less advanced chips. So in what will come as long-overdue good news to long-suffering shareholders of companies like Intel which has gotten crushed while foreign peers such as Taiwan Semi and ASML have flourished, industry executives familiar with negotiations said the forthcoming announcements "are for much larger sums, in the billions of dollars," and aimed to kick-start manufacturing of advanced semiconductors that power smartphones, artificial intelligence and weapons systems. The executives expect some announcements to come before the State of the Union address scheduled for March 7, when President Biden, will seek to showcase his economic achievements as the presidential campaign picks up steam. “There is pressure obviously to get the big names funded before things start really heating up,” said William Rinehart, a senior fellow for technology and innovation for the American Enterprise Institute, a think tank. The announcements are preliminary, to be followed by due diligence and then final agreements. Funds will be released in stages as the projects progress. Some lawmakers and industry officials worry that, because of permitting and other delays, it could be years before the taxpayer-subsidized factories are churning out made-in-America chips. Among the likely beneficiaries and funding recipients is Intel, which is led by CEO Pat Gelsinger and has projects under way in Arizona, Ohio, New Mexico and Oregon that will cost more than $43.5 billion. Another is TSMC, with two fabrication plants, or fabs, under construction near Phoenix for a total investment of $40 billion. Arizona and Ohio are considered battleground states in November’s presidential and congressional races. South Korea’s Samsung Electronics has a $17.3 billion project near Dallas. Micron Technology, Texas Instruments and GlobalFoundries count among other top contenders, industry executives say. “Certainly, in the early part of this year, we will be announcing major progress,” Michael Schmidt, director of the Chips Program Office, said. “We are on schedule.”   A Commerce Department spokeswoman declined to discuss individual applications, timing or award amounts. “This is a merit-based process with tough commercial negotiations—CHIPS awards will be entirely dependent upon which projects will advance U.S. economic and national security,” she said. The Chips Act includes $39 billion in manufacturing grants to cover as much as 15% of the total cost of each project up to $3 billion per fab, as well as loans, loan guarantees and tax credits. To be sure, how the Chips Act is implemented will make for an early test of Washington’s ability to carry out industrial policy— government support for industries deemed strategic — where China, Japan and Germany have far more practice. Naturally, delivering on signature economic policies, such as the Chips Act, a 2021 infrastructure law and the 2022 Inflation Reduction Act which targets renewable energy, is also urgent for Biden’s re-election push considering his substantial popularity deficit behind Trump in the polls. Despite the general popularity of such stimulus boondoggles, voters overall have a dim view of Biden’s economic stewardship. A December poll by The Wall Street Journal found “Bidenomics,” the collective moniker for such programs, is viewed favorably by less than 30% of voters and unfavorably by more than half. Part of the gap might lie in how long it has taken to actually implement the laws. The Chips Act’s requirements on workforce and national security have complicated the funding negotiations. Shortages of skilled workers loom. Meanwhile, TSMC, which produces roughly 90% of the world’s most advanced chips, said last week it expected to delay production at the second of its Arizona plants by one to two years, citing uncertainty over U.S. incentives. TSMC had earlier postponed the opening of the first fab from 2024 to the first half of 2025. “The main reason is the lead time and the alternatives that these firms have,” said John VerWey, an adviser on security and technology at the federal Pacific Northwest National Laboratory who has studied regulatory hurdles for plant constructions in the U.S. “When TSMC wants to build a fab in Taiwan or in Japan, they can do so much faster than they can in the U.S.” A shortage of skilled workers has also been cited as a reason for potential delays. The Semiconductor Industry Association, a trade group, estimates the industry will face a shortfall of 67,000 workers by 2030, including technicians, computer scientists and engineers.   “The chip industry is capital-intensive and, as such, firms need predictability,” said Jimmy Goodrich, a semiconductor expert advising Rand Corp. “They will hedge significant investments such as purchasing equipment, which accounts for 80% of fab costs, until they are certain that there is market demand and that government incentives will be in place at the level needed to compete globally." Tyler Durden Sun, 01/28/2024 - 08:45.....»»

Category: smallbizSource: nytJan 28th, 2024

BYD (BYDDY) Discusses Supply Deal With Brazil"s Sigma Lithium

BYD (BYDDY) is in talks with Brazil's Sigma Lithium over a supply deal to secure access to the raw material for power batteries. BYD Company Limited BYDDY is discussing a supply agreement with Sigma Lithium Corporation SGML, a battery-grade lithium producer in Brazil, to secure access to the raw material for power batteries.Per the Financial Times, the China-based automaker is in discussion with Sigma Lithium, valued at $2.9 billion, over a possible supply deal, joint venture or acquisition.Per the report, Sigma started shipping lithium, a crucial element for electric vehicle (“EV”) batteries, last year from its hard-rock mine and processing plants in Minas Gerais.Per Alexandre Baldy, Brazil’s chairperson of BYD, the company met the chief executive of Sigma Ana Cabral Gardner in Sao Paulo last month. He, however, declined to give more information on the discussion.Sigma obtains battery-grade lithium concentrate from mined lithium spodumene ore. Per the report, the lithium producer plans to triple its annual capacity to 270,000 tons.BYD offers six models in Brazil, including Seal, Tang EV, Han EV, Yuan Plus EV, Song Plus DM-i and Dolphin.The China-based automaker recently outstripped Tesla to become the largest EV manufacturer in the world.Per a joint announcement by BYD and the government of Brazil’s state of Bahia, the company will build a large manufacturing base complex in Brazil, which will consist of three plants.It is constructing its first EV facility outside Asia in Brazil as part of a $620 million investment.A production plant for electric buses and truck chassis, an energy passenger vehicle production plant and a processing plant will be included in the industrial complex.The energy passenger vehicle production plant will produce pure electric and plug-in hybrid models, with an estimated annual capacity of 150,000 units.Per BYD, the processing plant will use local port resources to fulfill the demand for new energy products in the global market.The industrial complex is expected to begin production in the second half of 2024.Zacks Rank & Key PicksBYDDY currently carries a Zacks Rank #3 (Hold).Some better-ranked players in the auto space are Volvo VLVLY and Mercedes-Benz Group AG MBGAF, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings suggests year-over-year growth of 4.2% and 73.1%, respectively. The EPS estimates for 2023 and 2024 have improved by 4 cents and 3 cents, respectively, in the past 30 days.The Zacks Consensus Estimate for MBGAF’s 2023 sales implies year-over-year growth of 5.8%. The EPS estimates for 2024 and 2025 have moved up a penny and 30 cents, respectively, in the past 60 days. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for 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 AB Volvo (VLVLY): Free Stock Analysis Report Byd Co., Ltd. (BYDDY): Free Stock Analysis Report Sigma Lithium Corporation (SGML): Free Stock Analysis Report Mercedes-Benz Group AG (MBGAF): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 15th, 2024

He was promised a "job of the future." Instead he"s stuck working at Taco Bell.

America is spending $52 billion to counter China's edge in semiconductor chips. So where are all the jobs that were promised? Semiconductor chip companies are racing to train workers for the jobs of the future. But many have been slow to hire new trainees. Nando Vidal/Getty, Antagain/Getty, Xuanyu Han/Getty, Akaradech Pramoonsin/Getty, skodonnell/Getty, Thomas Roche/Getty, NunoLopes/Getty, Tyler Le/BIWhen I met Collin Gardner in September, he was tired of working at Taco Bell. He started working at the fast-food chain in college as a way to make some money while working toward his degree in psychology. After graduating in May, he said he struggled to find a job in the field because most required a master's degree. The 22-year-old needed a gig that could help him launch a career, or at least one with better pay.Thankfully, Gardner came across a YouTube ad for the Quick Start program, a partnership between major semiconductor companies and three community colleges in Arizona's Maricopa County that promised to train people to become semiconductor-processing technicians — frontline workers who help make the chips that power everything from iPhones and washing machines to pickup trucks and military equipment. The program, one of the first of its kind, has laid the foundation for similar initiatives across the country.The 10-day program seemed like a perfect fit for Gardner: It was local, it was relatively short, and it seemed to be a promising first step toward a career in Arizona's industry of the future."I applied because I thought it was a simple, inexpensive certification that would get me a job somewhat immediately working in the industry, hoping that I would enjoy the work and get at least better pay than Taco Bell," he said midway through the program in late September.But since completing Quick Start, Gardner has come to a worrying realization: There aren't enough semiconductor jobs to go around. After I spent time in Arizona, it was clear to me just how much economic conditions, construction slowdowns, and the slow distribution of government funds had dampened the near-term enthusiasm around the promised semiconductor job boom. Quick Start is just one program, but its connections to major companies and its advantageous location in Arizona — the future home of America's semiconductor industry — mean that outcomes for its graduates are a useful bellwether for the US's massive investment in chipmaking.Sure, roles are expected to materialize in the years to come. But being trained for a job of the future doesn't do you much good when the future isn't here yet.Not according to planSemiconductors have become a critical technology, which is a serious problem for the US since just 12% of all chips are produced domestically and the pandemic proved any disruption to the supply chain can have significant consequences for our economy. Add in the fact that the world's leading chipmaker, Taiwan's TSMC, is precariously close to China — a geopolitical rival that has made more noise in recent years about invading the island — and it's no wonder that the US government is rushing to bring the industry to its shores.The American semiconductor rush kicked into high gear in 2022 when President Joe Biden signed the CHIPS Act into law, which included $52 billion in subsidies designed to bring more chipmaking to the US. Much of the funding is expected to flow to Arizona, which has a history of semiconductor manufacturing.But despite these positive developments, industry leaders issued a dire warning: There weren't enough American workers to fill their planned factories. Semiconductor manufacturing requires a phalanx of technicians, computer scientists, and engineers with technical training to produce the highly delicate technology. Given the pace with which people are joining the industry, a July study by the Semiconductor Industry Association in partnership with Oxford Economics estimated that the US would have a shortfall of nearly 70,000 semiconductor workers by 2030.That's where programs like Quick Start come in.With the backing of major industry players, including TSMC and Intel, Quick Start kicked off in July 2022. The program costs just over $300, all told, and graduates of the 10-week course receive a semiconductor pre-apprentice credential, which can be used to land jobs in the industry, typically in semiconductor-technician roles. Entry-level technicians can expect to earn roughly $30 an hour, depending on experience, and there are chances for advancement."I'm constantly learning and I'm constantly in training here," Lisa Strothers, a 2022 Quick Start graduate who landed a job at Intel, told me last year.Quick Start students spend 10 days preparing for a career in the semiconductor industry.Jacob ZinkulaWhen I spoke with program leaders, they said that in some ways, Quick Start had been a resounding success: 3,000 people have passed the program's online pretest, which was temporarily closed in March because of excess demand before being reopened in September. Nearly 900 students had enrolled in the program and over 700 have successfully completed it, with roughly 300 on a waitlist. Nearly two-thirds of students have been people of color, and half have been first-generation college students.Despite this success, and the supposed need for more semiconductor workers, Quick Start's graduates are facing a growing problem: There aren't jobs for many of them.Due in part to slowing demand for their tech, the same semiconductor companies that have been outspoken about the need for people with industry experience have scaled back their near-term hiring and even laid off some workers, leaving programs such as Quick Start with a glut of graduates who have few paths to employment in the industry. They were literally frozen when I asked what their hiring needs in the future looked like. Leah Palmer, executive director for the Arizona Advanced Manufacturing Institute at Mesa Community College Of the 240 former Quick Start students who had filled out an employment-outcome form as of June 30, 31% said they had been hired in the industry, while the others said they were either still looking for a job — 58% — or weren't looking, 11%. As for the hundreds of other students, including those who've completed the program in recent months, Quick Start doesn't know what they're up to. The lack of updated data on employment outcomes raises questions about the success of the program."Usually, education is trying to catch up to the speed of industry," Leah Palmer, the executive director for the Arizona Advanced Manufacturing Institute at Mesa Community College, told me in late 2023. "What we've done, at least for that entry-level position, is we've created a mechanism that systemized creating outputs greater than the demand can handle."Each month, Palmer said, she and other representatives from Quick Start meet with roughly 30 people from major semiconductor companies who serve on the program's advisory board. The meetings are used to share updates on the state of the industry and the program, specifically class-completion numbers, curriculum additions, hiring fairs, and funding opportunities. During a September meeting, Palmer said the companies were hesitant to provide many details about their plans to grow their workforces."They were literally frozen when I asked what their hiring needs in the future looked like," she said. "They couldn't speak to it and wouldn't speak to it. Even Intel and TSMC couldn't give any feedback."When asked about the company's hiring plans, a TSMC spokesperson said late last year that it had already hired over 2,000 factory workers at its Arizona site and that it planned to eventually staff roughly 4,500. An Intel representative told Business Insider that the company was actively hiring, pointing to its job openings across the US. Gary Burley, a professor for the Quick Start program who's worked at Intel for nearly 20 years, said the recent hiring slowdown wasn't surprising, as the industry was no stranger to hot-and-cold hiring cycles."The history of the semiconductor industry is hire a lot, and then — whoa, whoa," he said. "People have stopped buying it. We need to back off."The precedent is little solace for the many graduates of the Quick Start program who are stuck in limbo.Broken promisesPeople enroll in the Quick Start program with the expectation they'll have the opportunity to network and eventually interview with semiconductor companies — the program's website used to promise as much, though this has since been removed. Early last year, industry job fairs were held on a monthly basis, with candidates having the opportunity to learn about career opportunities and meet recruiters. But these events have dried up — the last job fair was in June, and no others have been scheduled.Some Quick Start students have struggled to find jobs in the semiconductor industry after the program. Jacob ZinkulaEven students who were lucky enough to attend a job fair felt like they were flapping in the wind. A former Quick Start graduate told me that the job fair they attended in April left a lot to be desired. The graduate spoke on condition of anonymity for fear of professional repercussions. Their identity is known to us."Basically, what happened was it was, like, 3 ½ hours of PowerPoints, and then the last 30 minutes, they were like, 'OK, now networking time. Go,'" they said. "There were a million people there, so even the people you wanted to talk to, you had to wait in a line. So it was a bit bungled."After eventually landing an interview with a major semiconductor company last year, the graduate said they were told that the company's hiring freeze would likely prevent them from moving forward for at least a few months — they've since been told they're no longer being considered for the position."It doesn't really feel like, 'Oh, we're dying for people. If you take this program, we'll help you get a good-paying job,'" they said in reference to semiconductor companies. "It's not that simple."While they eventually found work at the company through a contractor last year, they said they weren't optimistic about their near-term chances at direct employment."It's been such a freaking long process, and now I'm actually having doubts whether I'm going to stick it out all the way," they said.In addition to no longer promising interviews with semiconductor companies, Quick Start has taken other steps to moderate candidates' expectations. The program's website now says that hiring with its employment partners has "slowed" and that it doesn't "know when hiring will pick up again." Program leaders hope to learn more about the industry's hiring plans at the next advisory-board meeting in February.Another problem for the Quick Start program — and perhaps a contributor to graduates' hiring challenges — is the relatively short period of training. In the more difficult hiring environment, some of the chipmakers — including those who helped build the program — have started to question whether the training is sufficient to prepare graduates for jobs in the industry. Gabriela Cruz Thompson, Intel's director of university research collaboration, said late in 2023 that the company was evaluating whether the Quick Start graduates were being set up for success."We are asking ourselves and asking the managers of those people that got hired whether this training is enough, whether it is unfair to them to hire them and then they don't deliver in the job," she said.If the training is deemed insufficient, Maricopa County may consider adopting something closer to the one-year training program Intel is in the process of rolling out with Ohio community colleges. It's been such a freaking long process, and now I'm actually having doubts whether I'm going to stick it out all the way The hiring slowdown, and the reconsideration of the program's status as an adequate training ground, has forced Quick Start leaders to consider reducing enrollment — even as demand for the training persists."We're going to have to slow down our pipeline so that we're not putting out more people with absolutely no possibility of employment," Palmer said.Unless circumstances change soon, she said the program would likely reduce the number of classes — there are set to be 14 this spring across the three colleges.Hurdles aboundBeyond short-term economics, Palmer believes there are two reasons semiconductor companies have been slow to hire, she said. First, they're waiting to see how CHIPS Act funding gets doled out. In December, nearly 1 ½ years after the legislation was signed into law, the first CHIPS Act grant was announced. This waiting period has slowed the plans of companies such as TSMC, which is seeking billions of dollars of US subsidies."They don't know how much money they're going to get and when they're going to get it," Palmer said of semiconductor companies, adding: "We are being told by industry that after CHIPS money lands, the comfort of planning for the future will open permanent hires." If Biden loses the presidency this year, Palmer said, the uncertainty over funding may further curtail hiring.Second, while many chip factories are being built across the US, workers can't staff a fabrication plant until it's built. Construction delays haven't helped matters. Samsung and TSMC, for instance, have each postponed chip production from 2024 to 2025 — the latter said it was due in part to a shortage of skilled construction workers in the US. I did take this class thinking it would be more of a straight shot into a job, so I'm a little disappointed in that regard Other factors could also slow construction. In December, Commerce Secretary Gina Raimondo said that environmental-review requirements might force the construction of some chip projects to be halted for "up to years." Congressional efforts to exempt chip companies from some of these reviews have stalled, Bloomberg reported.While the hiring mess has been incredibly frustrating for some Quick Start students, given the long-term outlook for the industry, many students in the class I visited seemed to view Quick Start as a valuable opportunity. In the years ahead, the artificial-intelligence boom could further boost the demand for chips and create more jobs in the semiconductor industry. But for recent Quick Start graduates, who are eager for employment now, promises of future hiring may offer little peace of mind.In January, I followed up with Gardner, the fast-food worker who turned to Quick Start, to learn how his job search was going. He said he'd tried looking for roles but that more than two months later, he still hadn't landed a job in the semiconductor industry. Gardner told me that it was difficult to pinpoint which jobs he was qualified for."I'll keep looking, but it seems like I would have to get an associate's in electrical engineering or something similar to have much of a chance of getting a job in the industry," he said. "I did take this class thinking it would be more of a straight shot into a job, so I'm a little disappointed in that regard."In the meantime, he said he's still working at Taco Bell but that he's optimistic about his career path. He said he's about to begin custodian training at a local high school in the coming weeks. If all goes well, he said, this will turn into his primary gig in the short term."During my interview, they said there was mobility within custodian work," he said. "So I have faith I'll be all right if I find I can't transition into semiconductor manufacturing."Read the original article on Business Insider.....»»

Category: worldSource: nytJan 9th, 2024

The 2024 Dogs of the Dow Will Pay Huge Ultra-Yield Dividends

The Dogs of the Dow is a well-known strategy first published in 1991 by Michael Higgins. The strategy seeks to maximize the yield of investments by buying the 10 highest-paying dividend stocks available from the Dow Jones industrial average each year. The highest-yielding stocks are also the lowest-priced stocks in the venerable average, as the […] The post The 2024 Dogs of the Dow Will Pay Huge Ultra-Yield Dividends appeared first on 24/7 Wall St.. The Dogs of the Dow is a well-known strategy first published in 1991 by Michael Higgins. The strategy seeks to maximize the yield of investments by buying the 10 highest-paying dividend stocks available from the Dow Jones industrial average each year. The highest-yielding stocks are also the lowest-priced stocks in the venerable average, as the lower a stock (or bond) goes in price, the higher the attached yield or coupon becomes. With the Nasdaq up 43%  and the S&P 500 up 24.2%, the Dow Jones industrials came in a distant third, up 13% in 2023. Investors trying to play catch-up on the big tech giants that drove the market rally in 2023 may get caught trying to pick up nickels in front of a bulldozer as the lion’s share of the big money has been made. Here are the current five highest-yielding Dogs of the Dow for 2024 listed in order of the highest yield. With massive total return potential and the highest yields in the venerable Dow Jones industrials, investors looking for solid passive income and share price appreciation should buy these stocks promptly. Walgreens Boots Alliance A Walgreens store in Arizona. This huge drugstore chain is a safe retail play for investors looking to add health care now, trades at a very cheap 7.85 times 2024 earnings, and pays a massive 7.35% dividend. Walgreens Boots Alliance Inc. (NYSE: WBA) is a pharmacy-led health and beauty retail company. It operates through three segments: Retail Pharmacy USA Retail Pharmacy International Pharmaceutical Wholesale The Retail Pharmacy USA segment sells prescription drugs and various retail products, including health, wellness, beauty, personal care, consumables, and general merchandise, through its retail drugstores. It also provides specialty pharmacy and mail services; this segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States and six specialty pharmacies. The Retail Pharmacy International segment sells prescription drugs, health and wellness, beauty, personal care, and other consumer products through its pharmacy-led health and beauty stores and optical practices, as well as through boots.com and an integrated mobile application. This segment operated 4,428 retail stores under the: Boots Benavides and Ahumada names in the United Kingdom, Thailand, Norway, the Republic of Ireland, the Netherlands, Mexico, and Chile 550 optical practices, including 165 on a franchise basis. The Pharmaceutical Wholesale segment engages in the wholesale and distribution of: Specialty and generic pharmaceuticals Health and beauty products Home healthcare supplies and equipment Related services to pharmacies and other healthcare providers Verizon Communications This top telecommunications company offers tremendous value while paying a 7.06% dividend. Verizon Communications Inc (NYSE: VZ) is one of the largest US telecom companies. It provides wireless and wireline services to retail, enterprise, and wholesale customers. The company’s wireless network serves approximately 120 million mobile connections with 115 million postpaid subscribers. Verizon’s wireline business has undergone a period of secular decline due to wireless substitution and cable competition. Verizon also provides Converged communications Information Entertainment services over America’s most advanced fiber-optic network and delivers integrated business solutions to customers worldwide. Verizon and the other big telecom giants have been mauled over the last year over concerns over lead phone lines, and while this could keep a lid on the stock in the near term, many feel it’s the best buying opportunity in years. 3M This top company could jump with an economic pick-up in 2024, and the shares are down significantly over the last year while paying investors a 5.49% dividend. 3M Co. (NYSE: MMM) provides diversified technology services in the United States and internationally. 3M operates through four segments: Safety and Industrial Transportation and Electronics Health Care Consumer The Safety and Industrial segment offers Industrial abrasives and finishing for metalworking applications Auto body repair solutions Closure systems for personal hygiene products Masking and packaging materials Electrical products and materials for construction and maintenance Power distribution Electrical original equipment manufacturers Structural adhesives and tapes Respiratory, hearing, eye, and fall protection solutions Natural and color-coated mineral granules for shingles The Transportation and Electronics segment provides Ceramic solutions Attachment tapes Films, sound, and temperature management for vehicles Premium large-format graphic films for advertising and fleet signage Light management films and electronics assembly solutions Packaging and interconnection solutions Reflective signage for highway and vehicle safety The Healthcare segment offers healthcare procedure coding and reimbursement software skin, wound care, and infection prevention products and solutions dentistry and orthodontic solutions filtration and purification systems The Consumer segment provides: Consumer bandages Braces Supports and consumer respirators Cleaning products for the home Retail abrasives Paint accessories, Car care DIY products Picture hanging Consumer air quality solutions Stationery products Dow This company was spun out from Dupont in 2019 and offers investors growth, income potential, and a hefty 5.11% dividend. Dow Inc. (NYSE: DOW) is a leading materials science company formed due to the merger of Dow and DuPont in 2017 and subsequent spin in 2019. The company is organized into three principal divisions: Performance Materials and coatings Industrial Intermediates and infrastructure Packaging and specialty Plastics The Company’s segments include: Agricultural Sciences, which provides crop protection Seed/plant biotechnology products and technologies, urban pest management solutions, and healthy oils. Consumer Solutions consists of: Consumer Care Dow Automotive Systems Dow Electronic Materials Consumer Solutions-Silicones businesses Infrastructure Solutions, which consists of Dow Building & Construction Dow Coating Materials Energy & Water Solutions Performance Monomers Infrastructure Solutions-Silicones businesses Performance Materials & Chemicals, which consists of: Chlor-alkali and Vinyl, Industrial Solutions and Polyurethanes businesses Performance Plastics, which consists of: Dow Elastomers Dow Electrical and Telecommunications Dow Packaging Specialty Plastics, Energy, and Hydrocarbon businesses International Business Machines This blue-chip giant still offers investors an excellent entry point and a rich 4.06% dividend. International Business Machines Corp. (NYSE: IBM) provides integrated solutions and services worldwide. The company operates through four business segments: Software Consulting Infrastructure Financing The software segment offers hybrid cloud platforms and software solutions like: Red Hat, an enterprise open-source solution Software for business automation AIOps and management, integration, and application servers Data and artificial intelligence solutions Security software and services for threat, data, and identity. This segment also provides transaction processing software that supports clients’ mission-critical and on-premise workloads in the banking, airline, and retail industries. The consulting segment offers: Business transformation services, including strategy Business process design and operations Data and analytics System integration Technology consulting Application and cloud platform services. The infrastructure segment provides: On-premises and cloud-based server and storage solutions for its clients’ mission-critical and regulated workloads Support services and solutions for hybrid cloud infrastructure and remanufacturing and remarketing services for used equipment The financing segment offers lease, installment payment, loan financing, and short-term working capital financing services Again, it’s important to remember that the big move higher the market has been on in the fourth quarter comes right into the headwind of a 5.5% increase in the fed-funds rate over the last 18 months. The tricky part for investors is when the rate increase will put a dent in the economy, and while that remains unknown, history says it will indeed happen. Sponsored: Want to Retire Early? Here’s a Great First Step Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances? Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free. Click here to match with up to 3 financial pros who would be excited to help you make financial decisions. The post The 2024 Dogs of the Dow Will Pay Huge Ultra-Yield Dividends appeared first on 24/7 Wall St.......»»

Category: blogSource: 247wallstJan 5th, 2024

7 Stocks That Are Ready for Dividend Hikes in 2024

With December here, many investors are looking toward the Christmas holidays and the end of the year, and one thing is for sure: The stock market went through some of the biggest combined net selling from August to October across global equities ever. Then, it staged one of the furious rallies in stock market history […] The post 7 Stocks That Are Ready for Dividend Hikes in 2024 appeared first on 24/7 Wall St.. With December here, many investors are looking toward the Christmas holidays and the end of the year, and one thing is for sure: The stock market went through some of the biggest combined net selling from August to October across global equities ever. Then, it staged one of the furious rallies in stock market history from October until now. The significant drop in Treasury yields on hopes that the Federal Reserve will end the series of hikes may be premature, so it makes sense for investors to look to stocks that are not fully valued and pay dependable and, in some cases, significant dividends. Based on history, seven top companies looked poised to raise their dividends in 2024, and all are strong Buy rated on Wall Street. AT&T The legacy telecommunications company has been going through a lengthy restructuring, lowering the dividend, which still checks in at 6.68%. AT&T Inc. (NYSE: T) provides worldwide telecommunications, media, and technology services. Its Communications segment offers wireless voice and data communications services. AT&T  sells: Handsets Wireless data cards wireless computing devices Carrying cases Hands-free machines are available through its company-owned stores, agents, and third-party retail stores AT&T provides: Data Voice Security Cloud solutions Outsourcing Managed and professional services Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers In addition, this segment offers broadband fiber and legacy telephony voice communication services to residential customers. It markets its communications services and products under: AT&T Cricket AT&T PREPAID AT&T Fiber brands The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands. Comerica Based in Dallas, this fast-growing banking center giant pays a solid 5.10% dividend. Comerica Inc. (NYSE: CMA) provides various financial products and services. The company operates through Commercial banking Retail banking, Wealth management Finance The Commercial Bank segment offers various products and services, including: Commercial loans Lines of credit Deposits Cash management Capital market products International trade finance Letters of credit Foreign exchange management services Loan syndication services Payment and card services for small and middle-market businesses, multinational corporations, and governmental entities The Retail Bank segment provides: Personal financial services Consumer lending Consumer deposit gathering Mortgage loan origination Consumer products that include deposit accounts, installment loans, credit cards, student loans, home equity lines of credit Residential mortgage loans, as well as commercial products and services to micro-businesses The Wealth Management segment offers products and services comprising: Fiduciary Private banking Retirement Investment management and advisory Investment banking Brokerage services Annuity and life, disability, and long-term care insurance products. The Finance segment engages in the securities portfolio and asset and liability management activities. Comerica operates in: Texas California Michigan Arizona Florida Canada Mexico Dow This company was spun out from Dupont in 2019 and offers investors growth and income potential with a hefty 5.10% dividend. Dow Inc. (NYSE: DOW) is a leading materials science company formed due to the merger of Dow and DuPont in 2017 and the subsequent spin in 2019. Dow is organized into three principal divisions: Performance Materials and coatings Industrial Intermediates and infrastructure Packaging and specialty Plastics The Company’s segments include: Agricultural Sciences, which provides crop protection Seed/plant biotechnology products and technologies Urban pest management solutions Healthy oils. Consumer Solutions consists of: Consumer Care, Dow Automotive Systems, Dow Electronic Materials and Consumer Solutions-Silicones businesses Infrastructure Solutions consists of Dow Building & Construction Dow Coating Materials Energy & Water Solutions Performance Monomers Infrastructure Solutions-Silicones businesses Performance Materials and chemicals, which consist of Chlor-Alkali and Vinyl Industrial Solutions and Polyurethanes businesses Performance Plastics, which consists of Dow Elastomers Dow Electrical and Telecommunications Dow Packaging and Specialty Plastics Energy and Hydrocarbons businesses International Business Machines This blue-chip giant still offers investors an excellent entry point and a rich 4.11% dividend. International Business Machines (NYSE: IBM) is a leading provider of enterprise solutions, offering a broad portfolio of IT hardware, business and IT services, and a full suite of software solutions. The company integrates its hardware products with its software and services offerings to provide high-value solutions. IBM comprises five major segments:  Cognitive Solutions,  Global Business Services, Technology Services & Cloud Platforms  Systems Global Financing. The company posted an excellent third quarter, as the cloud proved prominent in the earnings reports, as did Red Hat, the software giant the firm bought in 2019. Red Hat’s open hybrid cloud technologies are now paired with the unmatched scale and depth of IBM’s innovation, industry expertise, and sales leadership in more than 175 countries. Kinder Morgan This is one of the top energy stocks and remains a favorite across Wall Street, paying a dependable 6.41% dividend. Kinder Morgan, Inc. (NYSE: KMI) is an energy infrastructure company in North America. The company operates through: Natural Gas, Products, Terminals CO2 segments. The Natural Gas Pipelines segment owns and operates Interstate and intrastate natural gas pipelines Underground storage systems Natural gas gathering systems Natural gas processing and treating facilities Natural gas liquids fractionation facilities Transportation systems Liquefied natural gas liquefaction and storage facilities The Products Pipelines segment owns and operates refined petroleum products, crude oil, condensate pipelines, associated product terminals, and petroleum OKEpipeline transmit facilities. The Terminals segment owns and operates liquid and bulk terminals that store and handle various commodities, including gasoline, diesel fuel, chemicals, ethanol, metals, and petroleum coke and owns tankers. The CO2 segment produces, transports, and markets CO2 to recover and produce crude oil from mature oil fields and owns interests in/or operates oil fields and gasoline processing plants, as well as a natural oil pipeline system in West Texas. The company also holds and runs approximately 83,000 miles of pipelines and 144 terminals. Leggett & Platt While somewhat off-the-radar, this stock has almost been cut in half over the last year, offering massive upside potential and a fat 7.90% dividend. Leggett & Platt Incorporated (NYSE: LEG) designs, manufactures, and markets engineered components and products worldwide. It operates through three segments: Bedding & Specialized Products Furniture Flooring & Textile Products. The company offers Steel rods Drawn wires Foam chemicals and additives Innerspring, Specialty foams Private label finished mattresses Mattress foundations Wire forms for mattress foundations Adjustable beds Industrial sewing and quilting machines Mattress packaging and glue drying equipment Machines to produce innerspring for industrial users of steel rods and wires, manufacturers of finished bedding, big box and e-commerce retailers, bedding brands and mattress retailers, department stores, and home improvement centers. Leggett & Platt also provides Mechanical and pneumatic lumbar support and massage systems for automotive seating Seat suspension systems Motor actuators and cables Titanium, nickel Stainless steel tubing; formed tubes, tube assemblies Flexible joint components for fluid conveyance systems Engineered hydraulic cylinders to automobile OEMs and Tier 1 suppliers, aerospace OEMs and suppliers, and mobile equipment OEMs Philip Morris International This company has continued to grow its global market share and pays a fat 5.46% divided. Philip Morris International Inc. (NYSE: PM) is one of the largest international cigarette producers, with a share of 28% of the global cigarette/heated tobacco market. Key combustible brands include: Marlboro Parliament L&M The company is commercializing IQOS, a heat-not-burn product, in over 40 markets, which could drive earnings in the future. Most on Wall Street believe Philip Morris International offers superior underlying growth prospects, both near-term and long-term. The share price has been weak of late as investors have questioned the growth potential of its reduced-risk products. 100% of the sales are outside of the United States. Sponsored: Want to Retire Early? Here’s a Great First Step Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances? Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free. Click here to match with up to 3 financial pros who would be excited to help you make financial decisions. The post 7 Stocks That Are Ready for Dividend Hikes in 2024 appeared first on 24/7 Wall St.......»»

Category: blogSource: 247wallstDec 29th, 2023

Intel (INTC) to Expand Chip Manufacturing Facility in Israel

Intel (INTC) expects the expanded manufacturing capacity to equip it better to regain its leading market position within the semiconductor industry and improve its supply chain mechanism in the region amid the prevailing unrest. Intel Corporation INTC has inked an agreement with the federal government of Israel to invest $25 billion to expand its chip manufacturing facility in the Middle Eastern country. The investment, dubbed the biggest of its kind in Israel’s history, is likely to generate significant employment opportunities and foster the economic development of the region.The strategic decision assumes significance as the investment comes at a time when the country is ravished by the ongoing conflicts with Hamas – a Palestinian Sunni Islamist political and military organization governing the Gaza Strip of the Palestinian territories, which are occupied by Israel under international law.Undeterred by the geopolitical conflicts, Intel intends to expand its existing chipmaking factory at Kiryat Gat — about 16 miles northeast of Gaza. The company expects the expanded manufacturing capacity to equip it better to regain its leading market position within the semiconductor industry and improve its supply chain mechanism in the region amid the prevailing unrest.The company expects the new production facility to open in 2028 and operate through 2035. The government will provide a grant of $3.2 billion for the expansion of the Kiryat Gat plant, spread over several years. Including Kiryat Gat, Intel has four development and production sites in Israel, employing about 11,700 people and investing more than $50 billion in the country over the last five decades.Intel is strategically investing to expand its manufacturing capacity to accelerate its IDM 2.0 (Integrated Device Manufacturing) strategy. Earlier this year, the company invested more than 30 billion euros to expand its upcoming semiconductor manufacturing facility in Germany. Dubbed “Silicon Junction,” it involves the construction of two new processor factories in Magdeburg, Germany.Intel also announced that it will develop a state-of-the-art semiconductor assembly and test facility near Wroclaw, Poland, at an anticipated investment of about $4.6 billion to cater to the increased demand for advanced semiconductor solutions. It is likely to work in unison with its existing wafer fabrication facility in Leixlip, Ireland, and its planned wafer fabrication facilities in Magdeburg to help create a first-of-its-kind end-to-end leading-edge semiconductor manufacturing value chain in Europe.In a concerted effort to regain its mojo, Intel has launched AI chips for data centers and PCs. This marks one of the largest architectural shifts for the company in 40 years. The strategic decision is primarily aimed at gaining a firmer footing in the expansive AI sector, spanning cloud and enterprise servers to networks, volume clients and ubiquitous edge environments, in tune with the evolving market dynamics. The company also remains on track with its 5N4Y (five nodes in four years) program in order to regain transistor performance and power performance leadership by 2025.The stock has gained 97.7% over the past year compared with the industry’s growth of 151.8%.Image Source: Zacks Investment ResearchIntel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Key PicksUnited States Cellular Corporation USM, sporting a Zacks Rank #1, is the fourth largest full-service wireless carrier in the United States. The company provides a range of wireless products and services, and a high-quality network to increase the competitiveness of local businesses and improve the efficiency of government operations.U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology. The company is well-positioned for continued demand for broadband.InterDigital, Inc. IDCC: Headquartered in Wilmington, DE, InterDigital is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks.This Zacks Rank #1 stock has a long-term earnings growth expectation of 17.4% and has surged 122.6% over the past year. A well-established global footprint, diversified product portfolio and ability to penetrate different markets are key growth drivers for InterDigital. Apart from a strong portfolio of wireless technology solutions, the addition of technologies related to sensors, user interface and video to its offerings is likely to drive considerable value, given the massive size of the market it offers licensing technologies to.Arista Networks, Inc. ANET, carrying a Zacks Rank #2 (Buy), is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 20.4% and delivered an earnings surprise of 12%, on average, in the trailing four quarters.It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations. 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.0% per year. So be sure to give these hand-picked 7 your immediate attention. See them 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 Intel Corporation (INTC): Free Stock Analysis Report United States Cellular Corporation (USM): Free Stock Analysis Report InterDigital, Inc. (IDCC): Free Stock Analysis Report Arista Networks, Inc. (ANET): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksDec 27th, 2023

Intel Scores Big With $3.2B Government Grant For $25B Israel Chip Plant: Report

Intel Corporation (NASDAQ: INTC) will reportedly get a $3.2 billion grant from Israel's government for the new $25 billion chip plant it plans to build read more.....»»

Category: blogSource: benzingaDec 26th, 2023

10 Best Semiconductor Stocks According to Billionaires

In this article, we discuss the 10 best semiconductor stocks according to billionaires. To skip the detailed analysis of the semiconductor industry, go directly to the 5 Best Semiconductor Stocks According to Billionaires. The semiconductor industry is arguably one of the most important segments of the market. It is the backbone of our modern digital […] In this article, we discuss the 10 best semiconductor stocks according to billionaires. To skip the detailed analysis of the semiconductor industry, go directly to the 5 Best Semiconductor Stocks According to Billionaires. The semiconductor industry is arguably one of the most important segments of the market. It is the backbone of our modern digital era. Our society’s dependence on electronic devices and interconnected systems increases day by day, and due to that, the importance of the semiconductor industry becomes more and more definite. The semiconductor industry is directly or indirectly connected to all the sectors of the market. Over the last few years, the importance and demand of semiconductors have become ever more pronounced. Initially, it started from an increased interest in blockchain technology and cryptocurrencies. As that trend started to fade away, the generative AI trend led to another boom in the industry. The computational needs for such technologies paved the way for some of the best semiconductor stocks, like NVIDIA Corporation (NASDAQ:NVDA) and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), to create ample opportunities for investors. NVIDIA Corporation (NASDAQ:NVDA)’s market cap was somewhere around $400 billion in December 2022 and jumped to $1 trillion by the second quarter of 2023. At the time of writing on December 8, the company had a market cap of $1.17 trillion. Furthermore, its stock has gained over 230% year-to-date (YTD) Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the company that makes all of NVIDIA Corporation (NASDAQ:NVDA)’s chips. While the company’s third-quarter revenues fell year-over-year (YoY), its stock price is up nearly 35% YTD at the time of writing on December 8. However, its stock price gain is not solely dependent on the AI boom but also on better-than-expected sales due to Apple Inc. (NASDAQ:AAPL)’s iPhone 15 launch. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the primary chip supplier of Apple Inc. (NASDAQ:AAPL). Advanced Micro Devices, Inc. (NASDAQ:AMD) has also made some noise in the AI segment as it unveiled its latest AI accelerator, Instinct MI300X, on December 6. The company also raised its AI Accelerator total addressable market to $400 billion from the prior $150 billion. At the Barclays’ Global Technology Conference, Advanced Micro Devices, Inc. (NASDAQ:AMD)’s CFO Jean Hu said: “It’s actually a very important milestone and inflection point for AMD to be a strong player in AI compute space. We all know the opportunities are tremendous, and we are really pleased we get to the point we can be very competitive in this marketplace. There are so many announcements yesterday. So, what I’ll do today is just highlight some of the key things we announced yesterday. You can absolutely listen to the webcast and it’s super exciting. First and foremost is, we formally launched MI300A and MI300X and highlighted the performance advantage we have, especially when you think about the inference, MI300X has the industry-leading memory bandwidth and capacity. So, it provide better TCOs for customers. You can either run more models or you can use less GPUs. So, it’s a great product, very competitive. And as we said during our last earnings call, MI300 will be the fastest revenue, $2 billion in our history. And we are very confident about the $2 billion-plus revenue number we talk about for 2024.” Talent Shortage Concerns in the Industry A report by the Semiconductor Industry Association (SIA) states that the semiconductor industry’s workforce will increase from 345,000 in July 2023 to 460,000 jobs by 2030, representing a 33.33% growth. While the availability of jobs is something that should be considered good news, the SIA predicts that 58% of projected new jobs are at risk of being unfilled, considering the current degree completion rates. Additionally, while AI is just one growth catalyst of the industry that we mentioned, McKinsey believes that due to autonomous and e-mobility technologies, the semiconductor demand in the automotive sector could triple by 2030. These factors can lead to labor and supply shortages in the future. While the SIA predicts this labor shortage at the end of the decade, recent events have shown that the industry is already lacking skilled labor. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s Arizona plant has been delayed till 2025 due to labor shortages. Furthermore, the company’s plan to build a facility in Germany is also facing the problem of insufficient skilled labor. Semiconductor Industry Outlook A December report by the World Semiconductor Trade Statistics organization predicts that the annual global semiconductor sales will decline by 9.4% YoY in 2023 yet increase by over 13% in 2024 to $588.4 billion. The previously mentioned McKinsey report believes that it will become a trillion-dollar industry by 2030, growing at the rate of 6%-8%. We previously reported that the global semiconductor market was valued at $664.2 billion in 2023 and will grow at a compound annual growth rate of 12.28% through 2032, reaching $1.88 trillion. Going by the forecasts, it is evident that there is no stopping the semiconductor industry’s growth. Billionaires are also buying into the industry. Some of the best semiconductor stocks, according to billionaires, include NVIDIA Corporation (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Lam Research Corporation (NASDAQ:LRCX). One of the most famous hedge fund billionaires, Stanley Druckenmiller of Duquesne Capital, kept NVIDIA Corporation (NASDAQ:NVDA) as his 13F portfolio’s top stock pick in the third quarter of 2023 and said: “If it’s as big as I think it is, Nvidia is something we are going to want to own for at least two or three years […] I do believe, unlike crypto, AI is real … it could be as transformative as the internet.” If you aren’t sure about which semiconductor stocks you should invest in, here are the 10 Best Semiconductor ETFs. You can also check out other billionaire stock picks on Billionaire Druckenmiller’s 10 Stocks Picks with Huge Upside Potential, and Billionaires Are Betting On These 10 Energy Stocks. An aerial view of a high-tech factory, showing the impressive scale of the company’s semiconductor production. Our Methodology For this article, we made a list of semiconductor and semiconductor equipment and materials stocks listed on NYSE and NASDAQ using the Yahoo Finance stock screener. From that list, we determined the number of billionaires that bought the companies’ shares during Q3 2023 through Insider Monkey’s database. We listed these stocks in ascending order of the number of their billionaire investors. Best Semiconductor Stocks According to Billionaires 10. Analog Devices, Inc. (NASDAQ:ADI) Number of Billionaire Investors: 15 Dollar Value of Billionaire Holdings: $962.265 million Analog Devices, Inc. (NASDAQ:ADI) is a semiconductor company that carries out the development and marketing of analog, mixed-signal, and digital signal-processing integrated circuits (ICs). The corporation serves more than 125K customers and has around 8K patents under its belt. On November 21, Analog Devices, Inc. (NASDAQ:ADI) posted its Q4 earnings result with a non-GAAP EPS of $2.01 and revenue of $2.72 billion. For Q1 fiscal 2024, the company forecasted revenue of around $2.5 billion, reported EPS to be around $0.91, and adjusted EPS to be somewhere around $1.70. On November 21, Analog Devices, Inc. (NASDAQ:ADI) announced a quarterly dividend of $0.86, payable by December 14 to the shareholders of record on December 4. At the time of writing on December 8, the dividend yield of the stock was 1.87%. Analog Devices, Inc. (NASDAQ:ADI) is one of the best semiconductor stocks according to billionaires, along with NVIDIA Corporation (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Lam Research Corporation (NASDAQ:LRCX). Ensemble Capital Management mentioned Analog Devices, Inc. (NASDAQ:ADI) in its third quarter 2023 investor letter. Here is what it said: “Analog Devices, Inc. (NASDAQ:ADI): Analog Devices, known in the industry as ADI, makes semiconductor chips that predominantly operate at the boundary of the physical world and the digital world, more commonly referred to as analog and mixed signal chips. These chips usually play a supporting role to the sexier “digital brain” that is the latest and greatest processor from Nvidia, Intel, AMD, Apple, or Qualcomm. While the digital brains get a lot more media attention, the supporting analog chips are as vital as those big expensive digital processors in driving value in electronic devices, which are becoming ubiquitous and intelligent throughout our lives. Anything with an on-off switch requires lots of these analog chips if it is going to relay input and output information with the physical world as well as manage the electrical power supply feeding the device. While these analog chips are relatively inexpensive to manufacture and distribute, it takes a long time to design and build a catalog of literally thousands of specific products to create the scale that makes them economically attractive businesses with a reputation of dependability and quality…” (Click here to read the full text) 9. Micron Technology, Inc. (NASDAQ:MU) Number of Billionaire Investors: 16 Dollar Value of Billionaire Holdings: $1.81 billion Micron Technology, Inc. (NASDAQ:MU) is an Idaho-based company that manufactures and provides storage and memory products and solutions under the brands of Micron and Crucial. On December 6, Mizuho raised the price target on Micron Technology, Inc. (NASDAQ:MU)’s stock to $86 from $82 and kept a Buy rating. According to the analyst, there will be positive tailwinds for memory going into 2024 for DRAM and NAND. On November 28, Micron Technology, Inc. (NASDAQ:MU) updated its first-quarter fiscal 2024 guidance. It now expects the quarter’s revenue to be near $4.7 billion, up from the prior range of $4.2 billion to $4.6 billion. The company commented that it expects the non-GAAP gross margins to break even, compared to the previously announced guidance of -4%, plus or minus 2%. As per Insider Monkey’s proprietary data, 16 billionaires had investments in Micron Technology, Inc. (NASDAQ:MU)’s stock at a combined value of $1.81 billion in Q3. 8. Intel Corporation (NASDAQ:INTC) Number of Billionaire Investors: 17 Dollar Value of Billionaire Holdings: $1.079 billion Intel Corporation (NASDAQ:INTC) is a California-based tech company that manufactures and sells products like microprocessors, chipsets, embedded processors, microcontrollers, and more. On December 4, Intel Corporation (NASDAQ:INTC) announced that it signed a Memorandum of Understanding with Siemens AG to collaborate and advance the digitalization and sustainability of microelectronics manufacturing. On November 7, The Wall Street Journal reported that Intel Corporation (NASDAQ:INTC) is in the lead to receive billions of dollars in government funding for secure facilities manufacturing microchips. While the exact amount has not been disclosed, the funding would be from the $39 billion manufacturing grants authorized under the Chips Act 2022. ClearBridge Investments commented on Intel Corporation (NASDAQ:INTC) in its third quarter 2023 investor letter. Here is what it said: “We also added to our position in Intel Corporation (NASDAQ:INTC) to take advantage of signs that it continues to make progress on its goal of regaining technology leadership. Intel appears to be executing its technology/product roadmap; the company is on track to ramp up PC and server products over the next 12 months on advanced manufacturing nodes that we believe will be more competitive with chief rival Advanced Micro Devices. We also see green shoots in the PC and server markets, with an increasing possibility of a cyclical recovery in both end markets in 2024.” 7. QUALCOMM Incorporated (NASDAQ:QCOM) Number of Billionaire Investors: 17 Dollar Value of Billionaire Holdings: $1.46 billion QUALCOMM Incorporated (NASDAQ:QCOM) develops wireless telecommunication products like semiconductors and software and provides related services. It is one of the best semiconductor stocks, according to billionaires. Over the last three months, 20 Wall Street analysts covered QUALCOMM Incorporated (NASDAQ:QCOM), and 13 kept a Buy rating on the stock. The average price target of $137.83 represents an upside of 2.97% at the time of writing on December 8. According to Insider Monkey’s database, 17 billionaires were bullish on QUALCOMM Incorporated (NASDAQ:QCOM)’s stock with a combined dollar value of $1.46 billion in the third quarter. 6. Broadcom Inc. (NASDAQ:AVGO) Number of Billionaire Investors: 17 Dollar Value of Billionaire Holdings: $3.1 billion  Broadcom Inc. (NASDAQ:AVGO) manufactures storage adapters, controllers and ICs, wireless, wired and optical products, and provides mainframe and enterprise software and cybersecurity software. On December 7, Broadcom Inc. (NASDAQ:AVGO) announced an increase in its quarterly dividend by 14.1% to $5.25. It is payable by December 29 to the shareholders of record on December 20. On December 7, Broadcom Inc. (NASDAQ:AVGO) posted its Q4 non-GAAP EPS of $11.06, which beat the analysts’ estimates by $0.10. The revenue increased by 4.1% YoY to $9.3 billion and topped the estimates by $20 million. NVIDIA Corporation (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Lam Research Corporation (NASDAQ:LRCX) are the best semiconductor stocks according to billionaires besides Broadcom Inc. (NASDAQ:AVGO). Broadcom Inc. (NASDAQ:AVGO) was mentioned in ClearBridge Investments’ second quarter 2023 investor letter. Here is what it said: “While the ClearBridge Multi Cap Growth Strategy has limited mega cap exposure, which has been a recent headwind to relative performance, we own several companies that stand to benefit from the explosive growth in generative AI. These holdings play key roles in building out the necessary infrastructure and helping customers leverage capabilities enabled by this emerging technology. Semiconductor and software solutions provider Broadcom Inc. (NASDAQ:AVGO), for example, is an important supplier of networking chips that power ethernet switches and routers for connectivity between AI servers. The company sees quarterly revenue from this part of their business exceeding $1 billion in their fiscal third quarter, on a trajectory toward doubling over the course of the year.”   Click to continue reading and see the 5 Best Semiconductor Stocks According to Billionaires.   Suggested articles: 12 Best Materials Dividend Stocks To Buy Now 16 Most Undervalued Value Stocks To Buy According To Hedge Funds 20 Most Expensive States to Live in 2024 Disclosure. None. 10 Best Semiconductor Stocks According to Billionaires is originally published on Insider Monkey......»»

Category: topSource: insidermonkeyDec 8th, 2023

Highest Yielding ‘Dogs of the Dow’ Could Be Massive Total Return Winners For 2024

The ‘Dogs of the Dow’ is a well-known strategy first published in 1991 by Michael Higgins. The strategy seeks to maximize the yield of investments by buying the ten highest-paying dividend stocks available from the Dow Jones Industrial Average each year. The highest-yielding stocks are also the lowest-priced stocks in the venerable average, as the […] The post Highest Yielding ‘Dogs of the Dow’ Could Be Massive Total Return Winners For 2024 appeared first on 24/7 Wall St.. The ‘Dogs of the Dow’ is a well-known strategy first published in 1991 by Michael Higgins. The strategy seeks to maximize the yield of investments by buying the ten highest-paying dividend stocks available from the Dow Jones Industrial Average each year. The highest-yielding stocks are also the lowest-priced stocks in the venerable average, as the lower a stock (or bond) goes in price, the higher the attached yield or coupon becomes. We decided to see how this year’s group is fairing as we have just a month left for 2023. While the stocks in the group have changed since the start of the year, the reality is that they also have become an excellent contrarian idea in a market that is very overbought in an economy that could suffer six months from now. With the Nasdaq up over 37% and the S&P 500 up 19.2%, investors are trying to play catch-up on the big tech giants that have been driving the market rally and may be trying to pick up nickels in front of a bulldozer as the lion’s share of the big money has been made. Here are the current five highest-yielding “Dogs of the Dow” listed in order of the highest yield. Walgreens Boots Alliance This huge drugstore chain is a safe retail play for investors looking to add health care now and trades at a very cheap 7.5 times 2023 earnings expectations. Walgreens Boots Alliance (NYSE: WBA) is a pharmacy-led health and beauty retail company. The company operates through three segments: Retail Pharmacy USA Retail Pharmacy International Pharmaceutical Wholesale The Retail Pharmacy USA segment sells prescription drugs and various retail products, including health, wellness, beauty, personal care, consumables, and general merchandise, through its retail drugstores. It also provides specialty pharmacy and mail services; this segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States and six specialty pharmacies. The Retail Pharmacy International segment sells prescription drugs, health and wellness, beauty, personal care, and other consumer products through its pharmacy-led health and beauty stores and optical practices, as well as through boots.com and an integrated mobile application. This segment operated 4,428 retail stores under the Boots, Benavides, and Ahumada in the United Kingdom, Thailand, Norway, the Republic of Ireland, the Netherlands, Mexico, and Chile, and 550 optical practices, including 165 on a franchise basis. The Pharmaceutical Wholesale segment engages in the wholesale and distribution of specialty and generic pharmaceuticals, health and beauty products, and home healthcare supplies and equipment, as well as provides related services to pharmacies and other healthcare providers. Verizon Communications This top telecommunications company offers tremendous value while paying a 7.11% dividend. Verizon Communications, Inc (NYSE: VZ) is one of the largest US telecom companies. It provides wireless and wireline services to retail, enterprise, and wholesale customers. The company’s wireless network serves approximately 120 million mobile connections with 115 million postpaid subscribers. Verizon’s wireline business has undergone a period of secular decline due to wireless substitution and cable competition. Verizon also provides converged communications, information, and entertainment services over America’s most advanced fiber-optic network and delivers integrated business solutions to customers worldwide. Verizon and the other big telecom giants have been mauled this year over concerns over lead phone lines, and while this could keep a lid on the stock in the near term, many feel it’s the best buying opportunity in years. 3M This legacy industrial giant could jump with continued economic pick-up, and the shares are down big this year while paying investors a 6.25% dividend. 3M Company (NYSE: MMM) provides diversified technology services in the United States and internationally. 3M operates through four segments: Safety and Industrial Transportation and Electronics Health Care Consumer The Safety and Industrial segment offers industrial abrasives and finishing for metalworking applications; auto body repair solutions; closure systems for personal hygiene products, masking, and packaging materials; electrical products and materials for construction and maintenance, power distribution, and electrical original equipment manufacturers; structural adhesives and tapes; respiratory, hearing, eye, and fall protection solutions; and natural and color-coated mineral granules for shingles. The Transportation and Electronics segment provides ceramic solutions; attachment tapes, films, sound, and temperature management for vehicles; premium large format graphic films for advertising and fleet signage; light management films and electronics assembly solutions; packaging and interconnection solutions; and reflective signage for highway, and vehicle safety. The Healthcare segment offers healthcare procedure coding and reimbursement software; skin, wound care, and infection prevention products and solutions; dentistry and orthodontic solutions; and filtration and purification systems. The Consumer segment provides consumer bandages, braces, supports, and consumer respirators; cleaning products for the home; retail abrasives, paint accessories, car care DIY products, picture hanging, and consumer air quality solutions; and stationery products. Dow This company was spun out from Dupont in 2019 and offers investors growth income potential with a hefty 5.42% dividend. Dow Inc. (NYSE: DOW) is a leading materials science company formed due to the merger of Dow and DuPont in 2017 and subsequent spin in 2019. The company is organized into three principal divisions: Performance Materials and coatings (23% of EBITDA) Industrial Intermediates and infrastructure (27%) Packaging and specialty Plastics (51%) The Company’s segments include Agricultural Sciences, which provides crop protection, seed/plant biotechnology products and technologies, urban pest management solutions, and healthy oils. Consumer Solutions, which consists of Consumer Care, Dow Automotive Systems, Dow Electronic Materials, and Consumer Solutions-Silicones businesses; Infrastructure Solutions comprises Dow Building & Construction, Dow Coating Materials, Energy & Water Solutions, Performance Monomers, and Infrastructure Solutions-Silicones businesses. Performance Materials & Chemicals, which consists of Chlor-Alkali and Vinyl, Industrial Solutions and Polyurethanes businesses Performance Plastics consists of Dow Elastomers, Dow Electrical and Telecommunications, Dow Packaging and Specialty Plastics, and Energy and Hydrocarbons businesses. International Business Machines This blue-chip giant still offers investors an excellent entry point and a massive 4.28% dividend. International Business Machines (NYSE: IBM) provides integrated solutions and services worldwide. IBM operates through four business segments: Software Consulting Infrastructure Financing The software segment offers hybrid cloud platforms and software solutions, such as Red Hat, an enterprise open-source solution; Software for business automation AIOps and management Integration and application servers; Data and artificial intelligence solutions Security software and services for threat, data, and identity. The consulting segment offers business transformation services, including strategy, Business process design and operations Data and analytics System integration, Technology consulting, and Application and cloud platform services. Meanwhile, the financing segment offers lease, installment payment, loan financing, and short-term working capital financing services. Again, it’s important to remember that the rampage the market has been on this year comes right into the headwind of a 5.5% increase in the fed-funds rate over the last 16 months. The tricky part for investors is when the rate of growth will put a dent in the economy, and while that remains unknown, history says it will indeed happen.               Sponsored: Want to Retire Early? Here’s a Great First Step Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances? Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free. Click here to match with up to 3 financial pros who would be excited to help you make financial decisions. The post Highest Yielding ‘Dogs of the Dow’ Could Be Massive Total Return Winners For 2024 appeared first on 24/7 Wall St.......»»

Category: blogSource: 247wallstDec 5th, 2023

Nissan (NSANY) to Invest $1.4B in U.K. Plant to Build EVs

Nissan (NSANY) plans to invest $1.4 billion in its British plant to manufacture electric versions of Qashqai and Juke. Nissan NSANY plans to make an investment of $1.4 billion to update its plant in northeast England to manufacture electric versions of two of its best-selling cars. The investment is expected to boost the country’s ailing economy.The automaker currently manufactures gasoline or gas-hybrid Qashqai and Juke crossovers at its Sunderland plant. The amount will include a third battery facility in Britain and infrastructure projects that will be financed by partners.The project is expected to receive support from the British government.Nissan has been making electric Leaf models in Sunderland for years, with batteries supplied by a plant at the site.In 2021, Nissan, together with its Chinese partner Envision AESC, announced an investment of $1.4 billion to build a second, 9 gigawatt-hour (“GWh”) battery facility in Sunderland.The deal is Rishi Sunak’s, the prime minister of the United Kingdom’s, first step toward reviving the interest of overseas companies, which cooled down following Brexit in 2016 and political turmoil.     Nissan did not disclose the value of the subsidies or guarantees provided by Britain.The automaker plans to electrify its entire European passenger car lineup by 2030. Per Makoto Uchida, president and CEO of Nissan, with electric versions of its core European models on the way, the company is accelerating toward a new era.In this year’s list of the United Kingdom’s most popular vehicles, Qashqai has secured the second spot, while Juke has secured the seventh spot.The auto industry is preparing itself for 10% post-Brexit trade tariffs, effective January 2024. The European Union (“EU”) has threatened to raise the cost of electric vehicles (“EVs”) if manufacturers fail to source enough components from either the EU or Britain.Nissan is the only carmaker in the U.K. with a dedicated battery plant nearby. It will join other automakers in making the transition to EV production in the United Kingdom.Earlier, BMW announced an investment of £600 million into its Mini factory in Oxford, England. Tata Sons announced an investment of £4 billion in the U.K.’s EV battery factory to produce around 40 GWh of battery cells per year. Stellantis announced an investment of £100 million to make electric vans and cars in northwestern England.Zacks Rank & Key PicksNSANY currently carries Zacks Rank #2 (Buy).Some other top-ranked players in the auto space are Volvo VLVLY, BYD Company Limited BYDDY and Toyota Motor Corporation TM, each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings indicates year-over-year growth of 4.2% and 65.6%, respectively. The EPS estimate for 2024 has increased by 24 cents in the past 30 days.The Zacks Consensus Estimate for BYDDY’s 2023 sales indicates year-over-year growth of 160.2%. The EPS estimate for 2023 has increased by 62 cents in the past 60 days. The EPS estimate for 2024 has increased by a penny in the past 30 days.The Zacks Consensus Estimate for TM’s 2023 sales and earnings indicates year-over-year growth of 11% and 45.4%, respectively. The EPS estimates for 2023 and 2024 have increased by $2.37 and 13 cents, respectively, in the past 30 days. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for 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 Toyota Motor Corporation (TM): Free Stock Analysis Report Nissan Motor Co. (NSANY): Free Stock Analysis Report AB Volvo (VLVLY): Free Stock Analysis Report Byd Co., Ltd. (BYDDY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksNov 27th, 2023

EV Roundup: NSANY"s $1.4B Outlay, VWAGY"s China-Specific EV Platform & More

While Nissan (NSANY) is investing $1.4 billion in a UK factory to produce electric versions of Qashqai and Juke models, Volkswagen (VWAGY) is launching an electric platform for entry-level cars in China. Chinese EV player NIO Inc. NIO announced a collaboration with Changan Automobile for battery swapping. China-based electric scooter manufacturer Niu Technologies NIU incurred loss per share and reported a year-over-year decline in revenues in the third quarter of 2023. China’s auto giant BYD Co Ltd BYDDY hit a historic 6 million new energy vehicles milestone with the latest Fang Cheng Bao Leopard 5 SUV and unveiled the flagship Han sedan in the UAE amid the Middle East's growing EV landscape. Japan’s auto giant Nissan NSANY announced a $1.4 billion investment in Sunderland for electric Qashqai & Juke production, revving up its electrification strides. Germany-based Volkswagen VWAGY, in a strategic move to regain its foothold in China's competitive automotive market, has announced a bold plan centered around an innovative, affordable electric car platform.Last Week’s Top StoriesNIO and Changan signed an agreement on battery swapping. Both companies will come together to formulate standards for swappable batteries, build and share the battery swapping network, develop swappable vehicles and set up an efficient battery asset management mechanism. Changan has 39 years of experience in vehicle production and operates 12 manufacturing bases and 22 factories globally. NIO is the leading operator of battery-swapping networks for smart EVs in the world. It has more than 2,100 Power Swap Stations worldwide. This year, NIO had plans to install 1,000 new stations in China. It provided over 32 million battery swaps for users as of Nov 20, 2023.Chinese authorities are actively promoting the creation of battery-swapping networks for EVs. They have released documents and guidelines to encourage widespread adoption of this model, supporting the development of standards for battery-swapping architecture, universal platforms, and swappable batteries. The documents and guidelines include the NewEnergy Vehicle Industry Development Plan, the Implementation Plan for Further Enhancing the Service Capability of Charging and Swapping Infrastructure and the Notice on Launching Pilot Program of Swappable New Energy Vehicles. The partnership between NIO and Changan Auto delivers to the requirements of these guidelines.Niu posted third-quarter 2023 adjusted loss of 14 cents a share as against a profit of 1 cent a share in the year-ago period. Revenues totaled $127 million, declining 19.6% on a yearly basis. Gross margin for the quarter under review came in at 21.4%, down from 22.1% in the corresponding period in 2022. E-scooters sold by the company totaled 265,923 units (comprising 230,455 units in China and 35, 468 units in the international markets), declining 17.1% from third-quarter 2022, primarily due to conservative spending in China for the company’s premium series products.Total operating expenses were $39 million, up 9.5% year over year. As of Sep 30, franchised stores in China totaled 2,834 and the international sales network strengthened to 55 distributors encompassing 53 countries. At the end of the quarter under review, the firm had cash and cash equivalents of $104.4 million. NIU anticipates fourth-quarter revenues in the band of RMB 490-612 million, implying a year-over-year contraction of 0-20%. BYD reached a significant milestone as its 6 millionth new energy vehicle, the Fang Cheng Bao Leopard 5, rolled off the production line at the Zhengzhou factory. This plug-in hybrid SUV, slightly smaller than the Toyota Land Cruiser Prado, debuted last August, with production and deliveries starting in November. BYD's new energy vehicle (NEV) sales are surging, with the company taking 13 years for the first million NEVs, just one year for the second million, and a mere six months for the third million. Subsequently, an additional 2 million NEVs were achieved in the following nine months, and the sixth million mark was reached in only three months, primarily due to increased production capacity.BYD highlighted its active global expansion, particularly in public transit electrification, with new energy buses and taxis operating in over 400 cities across more than 70 countries. Additionally, it recently launched its flagship Han sedan in the United Arab Emirates, with the ATTO 3 model also offered for sale. This move aligns with the growing interest in electric vehicles in the Middle East, where countries like Saudi Arabia are implementing multi-year plans to reduce dependence on fossil fuels.BYD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Nissan is set to spend $1.4 billion to upgrade its Sunderland factory in northeast England. This investment aims to transform the facility for the production of electric versions of its two top-selling models - the Qashqai and the Juke crossover vehicles. Currently, the Sunderland plant, which employs around 6,000 workers, manufactures gasoline and gas-hybrid versions of these models. The $1.4 billion investment will not only facilitate the production of electric successors for Qashqai and Juke but also spur broader investments in related infrastructure projects and the supply chain. The Sunderland plant will also see the development of a new gigafactory for EV batteries as part of this investment, reflecting Nissan's commitment to EV production.This move by Nissan has been welcomed by the British government, especially amid efforts to revitalize the country’s economy. The company plans to produce the next generation of its long-running Leaf electric car at the Sunderland factory, further cementing its commitment to the EV market. Nissan's Sunderland factory faced uncertainties following the 2016 Brexit vote, but this investment signals a strong future for the plant. The company has set a target to electrify its entire European passenger car lineup by 2030, and this recent announcement is a key step in realizing that vision.Volkswagen (VWAGY) intends to develop a new, China-specific platform, tentatively named the “A Main Platform.” This platform will derive from the existing Modular Electric Drive Toolkit (MEB) but will emphasize cost-efficiency, primarily through increased use of locally sourced components. This approach aims to make EVs more accessible to the Chinese market, where price sensitivity is a major consideration.Volkswagen's shift comes amid changing market dynamics, with the brand losing its top-selling status in China to BYD in late 2022, largely due to declining gasoline car sales. Despite this, Volkswagen has seen success with its ID.3 model, which, after a price cut, saw a significant increase in sales volume.The new platform targets the entry-level segment, with vehicles priced between $19,570 and $23,760. Volkswagen plans to introduce four models based on this platform, manufactured through existing joint ventures with SAIC and FAW. Additionally, starting in 2026, the company aims to launch two more all-electric models in collaboration with XPeng, bringing the total to six new models. The latest development is part of a broader global strategy by Volkswagen, which includes launching 10 new all-electric cars worldwide by 2026 and accelerating the pace of new vehicle launches.Price PerformanceThe following table shows the price movement of some of the major EV players over the last week and six-month period.Image Source: Zacks Investment ResearchWhat’s Next in the Space?Stay tuned for announcements of upcoming EV models and any important updates from the red-hot industry. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for 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 Nissan Motor Co. (NSANY): Free Stock Analysis Report NIO Inc. (NIO): Free Stock Analysis Report Niu Technologies (NIU): Free Stock Analysis Report Volkswagen AG Unsponsored ADR (VWAGY): Free Stock Analysis Report Byd Co., Ltd. (BYDDY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksNov 27th, 2023

3 Agriculture - Products Stocks to Watch in a Promising Industry

The Agriculture - Products industry is set to gain from solid demand. Stocks like Bunge (BG), Andersons (ANDE) and Arcadia Biosciences (RKDA) are poised to ride on this positive trend. The Zacks Agriculture - Products industry will benefit from the stable demand for food, supported by an increasing population. Rising consumer awareness regarding food ingredients and the preference for healthier alternatives will continue to boost the industry’s growth prospects. Alternative and innovative agricultural technologies like hydroponics and vertical farming are expected to be other key catalysts, given their inherent benefits.Players like Bunge Limited BG, The Andersons, Inc. ANDE and Arcadia Biosciences RKDA are poised to gain from strong end-market demand and their ongoing growth initiatives.Industry DescriptionThe Zacks Agriculture – Products industry comprises companies that are either involved in storing agricultural commodities, distributing ingredients to others or engaged in farming crops, livestock and poultry products. Some are engaged in purchasing, storing, transporting, processing and selling agricultural commodities or products derived from the same. They operate grain elevators, where income is generated from commodities bought and sold using these elevators or held as inventory. Some companies provide nutrients, advanced indoor and greenhouse lighting, environmental control systems and accessories for hydroponic gardening — the method of growing plants using mineral nutrient solutions in a water solvent instead of soil. A few players offer innovative, plant-based health and wellness products. Companies producing lumber also fall under this industry.Trends Shaping the Future of the Agriculture - Products IndustrySolid Demand to Support Industry: Demand for food is directly influenced by population and demographic changes besides income growth and income distribution. Per the United Nations, the global population will rise to 8.5 billion in 2030 and 9.7 billion in 2050. This would lead to a 50% increase in global food demand. In response to growing consumer demand for healthier food alternatives, several agricultural and food-based companies are investing in innovation and augmenting their product and market strategies to bring new quality and healthy food ingredients to the market. Ongoing improvements in grain-handling techniques and investment in larger storage spaces will likely support the industry. Plus, stable earnings across all cycles are ensured, considering the industry’s products are always in demand, irrespective of the condition of the economy.Hydroponics & Cannabis Are Key Catalysts: Hydroponics is gaining popularity as it gives growers the ability to regulate better and control nutrient delivery, light, air, water, humidity, pests and temperature in an indoor setting. It can help produce crops faster with higher yields than traditional soil-based growers. It is being utilized in new and emerging industries, including the cultivation of cannabis and hemp. Vertical farms producing organic fruits and vegetables also utilize hydroponics due to a rising shortage of farmland and environmental vulnerabilities. Also, vertical farming is the latest agricultural technology, wherein companies use shelves and artificial light to grow produce, minimizing land and water consumption. Total sales for the hydroponic equipment industry are projected to surpass $16 billion by 2025. Even though the cannabis industry is undergoing a rough patch due to an oversupply, its long-term prospects are intact. In the United States, several states have legalized cannabis for medical or recreational use, representing the largest market in the world. By 2027, spending on legal cannabis is expected to reach $47.3 billion in North America.Cost-Saving Actions to Aid Margins: Players in the industry are facing rising labor, packaging and distribution costs, among other expenses. Companies engaged in animal products have been facing increasing production costs for a while due to elevated feed ingredient prices. However, feed prices have eased lately. The industry continues to navigate a tight labor market with a spike in wages and higher distribution costs. Recently, industry players have been reporting improvements in the supply-chain issues that have been plaguing them so far. They have been making efforts to bolster their financial conditions, conserve cash and improve profitability by implementing pricing and cost-reduction actions, which are likely to help sustain margins in the future.Zacks Industry Rank Indicates Bright ProspectsThe Zacks Agriculture - Products industry is part of the broader Zacks Basic Materials sector. The industry currently carries a Zacks Industry Rank #55, which places it in the top 22% of the 251 Zacks industries.The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bright prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.Before we present a few stocks worth considering for your portfolio, let’s look at the industry’s recent stock market performance and valuation.Industry Versus Broader MarketThe Zacks Agriculture – Products industry has underperformed its sector and the Zacks S&P 500 composite over the past 12 months. Stocks in this industry have moved up 0.4% in the past 12 months compared with the S&P 500’s growth of 15.5% and the Basic Materials sector’s rise of 2.7%.One-Year Price Performance Industry's Current ValuationOn the basis of the trailing 12-month EV/EBITDA ratio, a commonly used multiple for valuing Agriculture - Products stocks, we see that the industry is currently trading at 4.86X compared with the S&P 500’s 13.21X. The Basic Materials sector’s trailing 12-month EV/EBITDA is 11.14X. This is shown in the charts below.Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)Over the last five years, the industry has traded as high as 9.52X and as low as 3.10X, with the median being 6.43X.3 Agriculture - Products Stocks to WatchBunge: The company’s shares have gained 12% since it announced entering a definitive agreement with Viterra Limited in June 2023. This merger will create an innovative global agribusiness company with an enhanced global network and grain and softseed handling capacity. With a diversified mix across geographies, seasonal cycles and crops, the company will be better positioned to manage risk and increase resiliency. The company announced in October that its shareholders have forwarded their approval. The merger is expected to close in mid-2024, subject to satisfaction of customary closing conditions. BG also recently provided an upbeat outlook for 2023 in its third-quarter 2023 results. In the Agribusiness segment, improved results in Processing are expected to drive results and Refined and Specialty Oils are expected to surpass their record results last year, backed by strong food and fuel demand. The company’s efforts to boost its footprint, build relationships with farmers and end consumers and strengthen its digital capabilities will boost growth. The company’s shares have gained 5.5% in the past year.Bunge is an integrated global agribusiness and food company covering the farm-to-consumer food chain. The Zacks Consensus Estimate for this St. Louis, MO-based player’s ongoing-year earnings has moved up 5% to $12.80 in the past 60 days. BG has a trailing four-quarter earnings surprise of 16.61%, on average. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Price & Consensus: BGAndersons: The company’s acquisition of ACJ International, a pet food ingredient supplier, contributed to its recently reported third-quarter 2023 results. The buyout is in sync with ANDE’s strategy to grow in the premium pet food ingredient industry.  Backed by its strong cash flow, It is continuing to add to its core grain and fertilizer verticals, including a greater focus on renewables and opportunities in renewable diesel feedstocks. In the third quarter, the renewables segment delivered a record performance, and the current margin outlook remains strong. Production facilities have been operated efficiently with improved ethanol yield and lower operating costs, which is expected to boost margins. In the Trade business, the assets are well-positioned to accumulate, condition and store large quantities of grain and gain from the large and ongoing U.S. harvest. The segment will also benefit from drying income due to receipts of higher moisture corn. Trade is also receiving increased storage rates. The company’s shares have gained 37% in a year.Maumee, OH-based Andersons operates in trade, renewables and plant nutrient sectors in the United States and internationally. The Zacks Consensus Estimate for ANDE’s earnings for fiscal 2023 has moved up 5% in the past 60 days. The company has a trailing four-quarter earnings surprise of 32.8%, on average. ANDE currently carries a Zacks Rank #2. Price & Consensus: ANDEArcadia Biosciences: The company continues to make solid progress in executing Project Greenfield, its three-year strategic plan to drive growth and profitability. The company has been streamlining its business to focus on higher-margin brands while aggressively managing costs. Aided by its efforts, the company has delivered positive gross profit from continuing operations for seven consecutive quarters and reported the lowest total SG&A expenses in four years in the third quarter of 2023. The GoodWheat range has been supporting revenue growth for the company. RKDA had earlier entered the baking mix category with the launch of better-for-you pancake and waffle mixes in July. GoodWheat pasta and pancake mixes and Zola coconut water were added to more than a thousand stores of distribution in the third quarter. The company has now expanded to a third category with GoodWheat Mac & Cheese, a family household staple representing more than $1.1 billion in sales. Better-for-you brands make up nearly 20% of the category and are growing faster than traditional brands. RKDA plans to ramp up innovation for both GoodWheat and Zola coconut water and add categories through acquisition. The company’s shares have lost 78% in a year but are expected to trend up eventually, backed by the tailwinds mentioned above.Arcadia is a producer and marketer of innovative, plant-based health and wellness products. RKDA used non-genetically modified advanced breeding techniques to develop its proprietary innovations, which it is now commercializing by selling seed and grain, food ingredients and products, hemp extracts, trait licensing, and royalty agreements. In the past 60 days, the Zacks Consensus Estimate for this Davis, CA-based player’s fiscal 2023 earnings has remained stable at a loss of $11.05 per share. RKDA has a trailing four-quarter earnings surprise of 39%, on average. It currently carries a Zacks Rank #3 (Hold).Price & Consensus: RKDA Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for 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 Bunge Global SA (BG): Free Stock Analysis Report The Andersons, Inc. (ANDE): Free Stock Analysis Report Arcadia Biosciences, Inc. (RKDA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksNov 27th, 2023

Semiconductor R&D spending by company: Top 12

In this article, we will talk about the top 12 semiconductor companies that spend the most on research and development. If you wish to skip our detailed analysis, you can go directly to Semiconductor R&D Spending By Company: Top 5. The Global Semiconductor Shortage Semiconductors are vital for the majority of technologies around us including […] In this article, we will talk about the top 12 semiconductor companies that spend the most on research and development. If you wish to skip our detailed analysis, you can go directly to Semiconductor R&D Spending By Company: Top 5. The Global Semiconductor Shortage Semiconductors are vital for the majority of technologies around us including automobiles, communications systems, computers, household appliances, and more. These tiny chips witnessed an extreme shortage during the pandemic when consumer demands suddenly shifted. People became more inclined towards consumer electronics and PCs, due to the rise of remote work and education, while vehicle sales dropped. The industry also faced massive supply chain disruption and logistical issues that further fueled the shortage. The semiconductor industry is currently in its recovery phase. Many semiconductor products including smartphones have even come a full circle from being short to having a surplus. One of the most prominent semiconductors that still seem to be struggling are the GPUs used for training and developing AI applications like ChatGPT. NVIDIA Corporation (NASDAQ:NVDA) dominates the market and controls almost 80% of the supply. The reliance on this singular giant in the semiconductor GPU market slowed the progress of many companies developing generative AI products. Generative AI companies have been struggling to meet their needs as the supply is limited to one dominant company. To keep up, generative AI companies have started to explore more options and overcome this shortage. On October 6, Reuters reported that OpenAI is exploring the option of making its own chips instead of relying on external chipmakers. By making its chips, the company will be able to reach its goals for expansion without potential delays caused by the shortage. It will also enable the company to have more control and diversity in its supply.  Governments across the globe have also become more alert to the issue of semiconductor shortages and are making efforts to nurture its growth. Many countries have announced attractive government incentives to encourage companies to set up manufacturing and production in them. The CHIPS and Science Act by the United States government is noteworthy. According to a report by the Semiconductor Industry Association (SIA), the earnest implementation of the Act that began at the start of 2023 has gathered $200 billion in private investments. Even in light of the semiconductor market tug-of-war between the US and China, implementing the CHIPS Act can potentially create thousands of jobs and foster the semiconductor ecosystem in the country. The close involvement of the governments could move the semiconductor shortage in the right direction, overcoming the ongoing slump. You can also check out Semiconductor R&D Spending By Country: Top 12. Semiconductor Industry At A Glance According to a report by Precedence Research, the global semiconductor market was valued at $664.2 billion in 2023. The market has been estimated to grow to $1.88 trillion by 2032, at a compound annual growth rate (CAGR) of 12.28%. The Asia Pacific region dominates the semiconductor market. According to the report, the region will uphold its position through the forecast period. In 2022, the Asia Pacific semiconductor market was valued at $230.5 billion, which accounted for 46% of the total market share. The presence of top-notch semiconductor companies in China, South Korea, Japan, and Taiwan contributes to the region’s distinct position in the global market. North America and Europe have also been estimated to grow substantially during the forecast period. Increasing investments alongside advanced R&D are predicted to be the main factors in this growth. By application, the networking and communications segment was the most noteworthy. According to the report, in 2022, the segment comprised 34% of the market share. As the popularity of smartphones rises, so does the demand for semiconductors used for its manufacturing. The demand for smartphones is expected to stay strong; therefore, the segment is estimated to grow as well. Major Players in the Semiconductor Industry Some of the biggest players in the semiconductor industry include NVIDIA Corporation (NASDAQ:NVDA), QUALCOMM Incorporated (NASDAQ:QCOM), and Advanced Micro Devices Incorporated (NASDAQ:AMD). NVIDIA Corporation (NASDAQ:NVDA) has emerged as one of the most noteworthy names in the semiconductor industry. The use of NVIDIA Corporation (NASDAQ:NVDA) chips in training generative AI applications substantially boosted the company’s popularity. The company constantly introduces innovations to maintain its position in the global market. On October 30, Reuters reported that NVIDIA Corporation (NASDAQ:NVDA) has published research on using AI in designing semiconductor chips. The company has combined more than three decades of data with a Large Language Model (LLM), similar to the one used in chatbots, to assist in the chip designing process. Training the chatbot from the experiences of the company would also help train junior designers and engineers as it can answer their queries quickly. Another major player using innovation and advancing R&D to stay ahead of its competitors is QUALCOMM Incorporated (NASDAQ:QCOM). On October 25, Reuters reported that QUALCOMM Incorporated (NASDAQ:QCOM) has announced the launch of its Snapdragon Elite X chip that will be available in laptops starting next year. Growing AI features have stirred the demand for laptops with more advanced chips that can perform tasks efficiently. These chips will be used in the Microsoft Corporation (NASDAQ:MSFT) laptops and computers, facilitating them to directly compete with the chips used by Apple Inc. (NASDAQ:AAPL). Advanced Micro Devices Incorporated (NASDAQ:AMD) is also a giant in the semiconductor industry. The company is making strategic acquisitions to nurture innovation. On October 10, Reuters reported that Advanced Micro Devices Incorporated (NASDAQ:AMD) plans to buy Nod.ai, an AI startup. The aim is to build a unified collection of software that will be used to power many semiconductor chips that the company makes. The AI startup will catalyze the company’s journey to achieve this goal as it uses AI models suited for the company’s chips.  R&D is pertinent to sustain a reputable position in this highly competitive industry. Many semiconductor companies allocate large sums of money for this purpose annually. We have made a list of the top companies that have the highest R&D spending. Semiconductor R&D spending by company: Top 12 Our Methodology To make a list of the top 12 companies that spend the most on semiconductor R&D, we initially found the largest semiconductor companies. The largest semiconductor companies were separated based on their market cap. We made a list of the top 30 companies, building on the hypothesis that larger companies spend more on R&D as well. We then individually looked up their trailing twelve-month research and development expenses from Macrotrends. The companies have been ranked based on the trailing twelve-month research and development expenses for the latest data available. The list has been arranged in ascending order.  Semiconductor R&D spending by company: Top 12 12. Microchip Technology Incorporated (NASDAQ:MCHP) Trailing Twelve Months R&D Expense as of June 30, 2023: $1.15 Billion Microchip Technology Incorporated (NASDAQ:MCHP) is one of the largest semiconductor companies in the world. It earns the majority of its revenue from the sale of its microcontroller units (MCUs) that are used in a variety of electronic devices. The company has advanced research and development facilities in India and France. For the twelve months ending June 30, Microchip Technology Incorporated (NASDAQ:MCHP) has spent $1.15 billion on research and development. 11. Analog Devices Incorporated (NASDAQ:ADI) Trailing Twelve Months R&D Expense as of July 31, 2023: $1.68 Billion Analog Devices Incorporated (NASDAQ:ADI) is a renowned company in the global semiconductor market. It manufactures a variety of products including analog, mixed-signal, and digital signal processing (DSP) integrated circuits. In July, Analog Devices Incorporated (NASDAQ:ADI) announced its plans to invest in India to expand its R&D operations. The investment will be made during the next five years and will create the company’s largest design center in Banglore, India. As of July 31, it has a trailing twelve-month R&D expenditure of $1.68 billion. 10. Texas Instruments Incorporated (NASDAQ:TXN) Trailing Twelve Months R&D Expense as of September 30, 2023: $1.84 Billion Texas Instruments Incorporated (NASDAQ:TXN) is one of the top semiconductor companies by market share. The company is constantly working on developing new products. The company has a 300-mm manufacturing roadmap for which the Utah plant is central. Texas Instruments Incorporated (NASDAQ:TXN) is constructing new plants alongside R&D to meet its goals and build capacity for its manufacturing roadmap. It has spent $1.84 billion on research and development over the past twelve months, as of September 30. 9. Marvell Technology Incorporated (NASDAQ:MRVL) Trailing Twelve Months R&D Expense as of July 31, 2023: $1.85 Billion Marvell Technology Incorporated (NASDAQ:MRVL) is the leading name in the industry providing data infrastructure solutions. One of the most significant R&D centers of the company is located in Vietnam. For the twelve months ending July 30, Marvell Technology Incorporated (NASDAQ:MRVL) has spent $1.85 billion on research and development. NVIDIA Corporation (NASDAQ:NVDA), QUALCOMM Incorporated (NASDAQ:QCOM), and Advanced Micro Devices Incorporated (NASDAQ:AMD) have invested large sums of money in semiconductor research and development and dominate the industry. 8. NXP Semiconductors NV (NASDAQ:NXPI) Trailing Twelve Months R&D Expense as of June 30, 2023: $2.25 Billion NXP Semiconductors NV (NASDAQ:NXPI) is one of the top companies based on semiconductor R&D spending. In September, NXP Semiconductors NV (NASDAQ:NXPI) stated that it would provide a grant via the 2nd Important Project of Common European Interest on Microelectronics (IPCEI ME/CT). The grant will enable the company to nurture R&D capabilities in Europe. As of June 30, it has a trailing twelve-month R&D expenditure of $2.25 billion. 7. Micron Technology Incorporated (NASDAQ:MU) Trailing Twelve Months R&D Expense as of August 31, 2023: $3.11 Billion Micron Technology Incorporated (NASDAQ:MU) is one of the largest semiconductor companies by market cap. The company specializes in the research and development of advanced memory and storage solutions. Micron Technology Incorporated (NASDAQ:MU) has spent $3.11 billion on research and development over the past twelve months, as of August 31.  6. Broadcom Incorporated (NASDAQ:AVGO) Trailing Twelve Months R&D Expense as of July 31, 2023: $5.06 Billion Broadcom Incorporated (NASDAQ:AVGO) has one of the highest R&D spending in the semiconductor industry. Broadcom Incorporated (NASDAQ:AVGO) develops advanced semiconductor solutions for various industries, including AI. For the twelve months ending July 31, it has spent $5.06 billion on research and development Some of the giants in the semiconductor industry include NVIDIA Corporation (NASDAQ:NVDA), QUALCOMM Incorporated (NASDAQ:QCOM), and Advanced Micro Devices Incorporated (NASDAQ:AMD). Click to continue reading and see the Semiconductor R&D Spending By Company: Top 5. Suggested articles: 30 Most Interesting Cities in America 12 Best Free Accounting Software in 2023 11 Best Military Drone Stocks To Invest In Disclosure: None. Semiconductor R&D Spending By Company: Top 12 is originally published on Insider Monkey......»»

Category: topSource: insidermonkeyNov 21st, 2023

Laird Superfood, Inc. (AMEX:LSF) Q3 2023 Earnings Call Transcript

Laird Superfood, Inc. (AMEX:LSF) Q3 2023 Earnings Call Transcript November 12, 2023 Operator: Good afternoon. Thank you for attending today’s Laird Superfood Third Quarter 2023 Financial Results Conference Call. My name is Cole, and I’ll be the moderator for today’s call. [Operator Instructions] I would now like to pass the conference over to our host, […] Laird Superfood, Inc. (AMEX:LSF) Q3 2023 Earnings Call Transcript November 12, 2023 Operator: Good afternoon. Thank you for attending today’s Laird Superfood Third Quarter 2023 Financial Results Conference Call. My name is Cole, and I’ll be the moderator for today’s call. [Operator Instructions] I would now like to pass the conference over to our host, Trevor Rousseau. Please go ahead. Trevor Rousseau: Thank you, and good afternoon. Welcome to Laird Superfood Third Quarter 2023 Earnings Conference Call and Webcast. On today’s call are Jason Vieth, Laird Superfood’s President and Chief Executive Officer, and Anya Hamil, our Chief Financial Officer. By now, everyone should have access to the company’s third quarter 2023 earnings release filed today after market close. It is available on the Investor Relations section of Laird Superfood website at www.lairdsuperfood.com. Before we begin, please note that during the course of this call, management may make forward-looking statements within the context of federal securities laws. These statements are based on management’s current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today’s press release and other filings with the SEC for a detailed discussion of these risks and uncertainties. With that, I’ll turn it over to Jason. Jason Vieth: Thanks, Trevor. Hello to everyone, and thank you all for joining us in today. I am proud to be able to report that our Q3 results represent a fundamental step change in the performance of our business. For the first time since Q3 of 2021, we are reporting net sales growth against both the prior period and the prior year same quarter. At the same time, we achieved our 2023 goal to exceed 30% gross margin by the back half of the year, an improvement of more than 750 basis points versus this time just one year ago. And we executed these improvements, which is a fraction of the marketing and SG&A costs that we utilized in the business during the last years, as we will discuss shortly. First, let’s dive into net sales. During 2022, I shared that we would need to reshape our sales algorithm in order to create a growing profitable business. I’m pleased to announce that our Q3 results were the result of this effort as the wholesale channel grew by more than 42% year-over-year to become nearly one half of our total business during this quarter. Natural channel consumption data as reported by Spin for the last 12 weeks ending October 8, 2023, showed a 61% growth for the Laird Superfood brand with positive sales growth in every category in which we compete. This growth is being driven by a healthy combination of unit velocity growth, price increases taken in previous quarters and distribution expansion. As expected, our online business, which is comprised of the DTC and Amazon channels, contracted by 16.6% as we continued to scale back media spend in support of our profitability goals. For the past 18 months, we have been managing this business towards profitability through significant reductions in media spend and by actively converting existing customers to subscription. The result of this is we have now moved from an inefficient, unproductive and unprofitable paid social media marketing model to top-of-funnel awareness driving marketing activations that employ podcasts, PR and organic media. In Q3 alone, we garnered more than 1.1 billion media impressions, and we are just getting started. I am also pleased to report that our Amazon inventory challenges are now behind us, as we were able to get our products restacked across their platform during Q3. While this channel has been constrained during 2023 due to the lack of inventory stemming from our Q1 quality event, we are now looking at a significant opportunity and expect to have a tailwind from that channel over the next year. Next, I’m going to tip my hat to our supply chain organization. It was managed to achieve the aggressive cost-saving target that we set out for them in 2023. Remember that it was only a year ago that we determined that we were going to shut down our manufacturing and distribution facilities in Sisters, Oregon, and transition to an asset-light model to improve our efficiencies, increase our flexibility and lower our costs. Our results in Q3 were the realization of that vision as we decreased our landed product costs as a percent of gross sales from 74.6% to 54.8% in this most recent quarter. During this time, we have developed strong and mutually beneficial relationships with our co-manufacturer and logistics partners and are proud to have both of them in our supply chain. At the same time, our G&A expense was 50% lower than during Q3 of last year as the organization has continued to do more with less. While other companies are just announcing cost savings programs to match the current state of economy and its impact on the business, I’m proud to report that we have largely and successfully completed that work, including headcount downsizing and discretionary expense reduction. We were also able to recently close all outstanding litigation against us, and we successfully renegotiated our insurance to save more than $500,000 versus last year’s policy, which will begin to be fully recognized during Q4. While these savings have begun to flow into our earnings results, still had a solid amount of reduction that will materialize in Q4 of this year and during 2024, which will help us to drive toward what has now become our short to midterm goal of breakeven profitability and becoming cash flow positive. A close-up of a freshly roasted coffee bean, accompanied by a vintage aluminum scoop. I am extremely proud by how far we have come during the past two years, and I am grateful to our leadership team and our entire LSF organization for what they have accomplished, but I’m even more excited for where we’ll go from here. Now that our cost structure continues to come in line with best-in-class CPG companies, we can turn our focus to restoring LSF topline growth through wholesale expansion in 2024 and beyond. And as we continue to chip away at our least effective marketing activities to further reduce our G&A expenses, we believe that we can now be positioned to achieve a cash flow positive run rate in the next 12 to 18 months. Now let me turn the call over to Anya to discuss the second quarter results. Anya Hamil: Thank you, Jason. Net sales of $9.2 million in the third quarter of 2023 increased 3.7% as compared to $8.8 million in the prior year period and increased 19% as compared to $7.7 million in the second quarter of 2023. The year-over-year growth was driven by distribution gains in the natural and conventional channels, seasonal program expansion in club, pricing actions as well as velocity improvements behind new packaging and the rebranding campaign launched earlier this year. This was partially offset by lower sales in e-commerce channels. Given the level of pullback in our marketing spend, which was 19% year-over-year reduction across Amazon and DTC work in media, this decline was expected. These marketing costs were strategic in nature in order to cut inefficient spend and reduce our customer acquisition cost to build the most sustainable e-commerce business and improve our profitability in these channels. Additionally, our Amazon sales continue to be negatively impacted by residual inventory out of stocks related to the previously discussed product quality issue experienced in Q1. I’m happy to say this issue was resolved at the end of the third quarter and is now fully behind us. In the third quarter, we continue to build on the success we achieved in the first half of the year from strategic actions implemented last year. Every quarter this year, we saw a consistent margin expansion versus prior year, with Q3 margin reaching 31%, which is 670 basis points improvement sequentially over Q2 and 750 basis points improvement versus the same period last year. Q3 gross margin of 31% is a milestone that puts us firmly on the way to achieving our long-term goal of gross margins in the high 30s. In Q3, this year-over-year margin expansion was driven by cost of sales improvement of 21% versus the same quarter prior year due to supply chain shift to third-party co-packing model. It would have been even stronger except for the investment that we have made in trade promotions to drive incremental awareness and trial in our wholesale channel. Starting in Q4 of this year, I expect to begin to pull back the elevated trade spend, which will allow margin expansion to ramp up even more as we see the full benefit of the supply chain transformation as well as other plant margin-driving initiatives take hold. Operating expenses for the third quarter of 2023 totaled $5.6 million, a decrease of $2.2 million compared to $7.9 million in the year ago period. This reduction was driven by lower marketing costs resulting from strategic cuts of inefficient spend and lower people costs and other general and administrative expenses following restructuring activities in 2022. Net loss, as reported, was $2.7 million for the third quarter of 2023, a decrease of $3.1 million versus the prior year period. Q3 net loss was the lowest in the company’s post-IPO history, driven by gross margin expansion and strategic pullback in spending across the board. Our Q3 SG&A was $1.8 million lower than the same quarter last year, demonstrating the strong progress we have made in managing costs and pushing the business towards breakeven and profitability in future quarters. Turning to our balance sheet and cash flow. We ended the quarter with $7.4 million in cash and no debt as we continue to conservatively manage our balance sheet. Cash burn in the third quarter of $3.5 million was elevated as compared to sequentially from $1.4 million in Q2 due to planned inventory build to meet stepped up demand, as we communicated on this call last quarter. Our year-end cash forecast is on track with our operating plans. Moving on to our outlook. With one more quarter left in the year, we expect fourth quarter net sales to be in the range of $8.5 million to $9 million and gross margins in mid- to high 30s, excluding any onetime extraordinary charges. This concludes our prepared remarks. Operator, we are now ready to open the call to questions. See also 15 Best Dividend Stocks of All Time and 15 Biggest Juice Companies and Brands. Q&A Session Follow Laird Superfood Inc. (NYSE:LSF) Follow Laird Superfood Inc. (NYSE:LSF) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. We will now begin the Q&A session. [Operator Instructions] Our first question is from Bobby Burleson with Canaccord Genuity. Your line is now open. Bobby Burleson: Sorry, can you hear me? I’m sorry, can you guys hear me? Jason Vieth: Yeah, we can hear you, Bobby. Bobby Burleson: Okay. Great. I thought I hung up on you guys for a second. So I just wanted to — first of all, congratulations on making so much progress and kind of turning the corner here. I wanted to just understand the media impressions comment made. What type of in your experience lag is there between that type of activity and maybe a pickup and maybe a move towards growth again in your DTC? And then I just want to add on to that, how long do you think just the tailwind from Amazon could persist into 2024? Jason Vieth: Yeah. Hey, bob, good to hear your voice and to be back here again and thanks. We certainly appreciate the recognition of the — all of the progress that’s been made by the team has been a nice long run here for two years to get to this point, and it’s really great now to see the culmination of a lot of those efforts. And we still have a lot in front of us, two of the points that you’re hitting on here are really important. One, on the DTC impressions, yes, media impressions that will benefit all of our business, of course. In the case of DTC, as you’re asking, I think that it’s important to understand, we are shifting our marketing strategy right now and certainly as we move into 2024 as well, it’s more top of funnel awareness. And that really started to take place through this year, but I would say it was heightened in Q3 and will be again in Q4. And so we’re spending more of our marketing dollars in podcast that we’re supporting and a partnership that we have already established with the Shawn Ryan show. And another one that we’re working on right now that we’re excited about closing, hopefully very soon. And we’re working as well with our PR agency to really make a heightened and concerted effort to generate these impressions, both paid and unpaid, and they’re doing phenomenal work for us right now. And so some of this as you’re alluding to, is going to be a longer-term benefit for us, and we won’t see the immediate impact. And that’s why these results — we’re so excited about these results because we got back to growth here in Q3, and we did it without the same level of that pay-to-play, one-to-one social media type of marketing that we have been doing in the past that we all know has become very inefficient after a certain level of spend. So we’re flipping the model on it — on a band. We’re seeing better results than we anticipated right out of the gate, and we do believe just as you’re alluding to that over time, as that awareness builds, we start to get to a more, I would say, a more conventional marketing model and one that bears fruit for multiple quarters and years to come. And then with regards to Amazon, we actually, right now, I would tell you, even in Q3, we had a bit of a headwind still with Amazon, while we were able to get inventory back in position in, I would say, probably two-thirds of the way through the quarter. We continue to have some challenges winning back buy boxes and with some other executions that were the result of that all the stocks that we had throughout this year. And we’re knocking down all of those in whac-a-mole fashion. And I would say getting to the cleanest look at Amazon that we’ve had really since last year at this time. So we’re starting to spend back into the channel. We pulled back spend significantly. So again, despite that pullback, we’re able to report growth this quarter, and that’s why it feels so good to be in that position because we know as we go to put spend back in, in an efficient manner from here, we have a chance to supercharge some of the growth in these channels right now......»»

Category: topSource: insidermonkeyNov 13th, 2023

Matrix Service Company (NASDAQ:MTRX) Q1 2024 Earnings Call Transcript

Matrix Service Company (NASDAQ:MTRX) Q1 2024 Earnings Call Transcript November 9, 2023 Operator: Good morning and welcome to the Matrix Service Company Conference Call to discuss Results for the First Quarter of Fiscal 2024. Currently, all participants are in a listen-only mode. [Operator Instructions] As a reminder this conference call is being recorded. I would […] Matrix Service Company (NASDAQ:MTRX) Q1 2024 Earnings Call Transcript November 9, 2023 Operator: Good morning and welcome to the Matrix Service Company Conference Call to discuss Results for the First Quarter of Fiscal 2024. Currently, all participants are in a listen-only mode. [Operator Instructions] As a reminder this conference call is being recorded. I would now like to turn the conference over to today’s host Ms. Kellie Smythe, Senior Director of Investor Relations for Matrix Service Company. Kellie Smythe: Thank you, Josh. Good morning, and welcome to Matrix Service Company’s first quarter fiscal 2024 earnings call. Participants on today’s call will include John Hewitt, President and Chief Executive Officer; and Kevin Cavanah, Vice President and Chief Financial Officer. The presentation materials we will be referring to during the webcast today can be found under Events and Presentations on the Investor Relations section of matrixservicecompany.com. Before we begin, please let me remind you that on today’s call, we may make various remarks about future expectations, plans and prospects for Matrix Service Company that constitute forward-looking statements for the purposes of the Private Securities Litigation Reform Act of 1995. Actual results may different materially from those indicated by these forward-looking statements because of various factors, including those discussed in our most recent annual report on Form 10-K and in subsequent filings made by the company with the SEC. To the extent we utilize non-GAAP measures, reconciliations will be provided in various press releases, periodic SEC filings and on our website. Before I turn the call over to John Hewitt, I’d like to share information about several upcoming investor conferences and corporate access opportunity. On November 14, we will hold the Matrix Service Company Virtual Annual Stockholder Meeting. You can register to attend as instructed in the proxy or via the Events tab on our Investor Relations website. We will present at and hold one-on-one meetings at the Sidoti Micro-Cap Virtual Conference planned for November 15 and 16. And finally, we will hold a Virtual Non-Deal Roadshow hosted by Rose & Company in December. If you’d like additional information on any of these events, I invite you to contact us with Matrix Service Company Investor Relations website. I will now turn the call over to John. John Hewitt: Thank you, Kellie, and good morning, everyone. Here at Matrix, we continue to pursue and expect zero injuries across our platform. Broadly, our focus is around accountability, communication and training to drive better outcomes. Each of us need to be accountable to ourselves and each other as we think about our behaviors, decision-making and risk awareness and not only our professional lives, but at home as well. We need to communicate our expectations, why safety is important and support each other. As a learning organization, training is critical to improve awareness, decision-making and ultimately, outcomes. Above all, each employee has the authority and the obligation to stop work when they see or feel uncomfortable with the task they or a coworker are about to perform. Three simple questions: What am I about to do? How can I get hurt? What am I going to do about it? Are key to keeping yourself and your coworkers safe. Turning to the quarter. We’re pleased to update you on the continued momentum in our business and our end markets. We generated awards of $497 million in our fiscal first quarter, surpassing our fourth quarter of fiscal 2023 awards of $464 million. This is our highest project award total in 5 years. Project awards resulted in a book-to-bill ratio of 2.5. Our Storage and Terminal Solutions segment was the standout in the quarter, recording a book-to-bill of 4.6 on the back of a large capital project award. This award is a midsized LNG liquefaction and storage facility in the Eastern U.S., similar to previous small to mid-sized LNG projects completed in the past. This is a project for a client, we’ve done a good deal of work for over the years, which is a testament to our ability to deliver complex projects safely, on time and with high quality. In our last earnings call, we referenced another LNG project we were awarded in the fourth quarter of fiscal 2023, an LNG peak shaver in our Utility and Power Infrastructure segment. Together, these projects are in line with our strategy of leveraging our strong cryogenic storage brand and our capabilities in engineering, fabrication, procurement and construction. Our strategy to offer complete solutions to the growing small to midsized LNG facility market is creating awards and growth for the company as we expand our brand and capture market share. This market covers a range of uses, such as peak shaving units, backup power plant fuel supply, ship bunkering, rocket fueling and export facilities. Our teams have a great reputation executing these types of projects and have built strong client relationships over the years, made clear by continued awards like the most recent one, I mentioned above. The pipeline for opportunities in the small to mid-scale LNG market remains strong with both new and repeat clients. Matrix’ capability to wrap the complete facility around the storage is unique in our markets and among our competition. Considering our current position in a robust market and with the numerous project proposals and bids in progress as well as the ongoing FEED studies, we expect to keep adding similar projects to our backlog over time. Adjacent to this strong position in the small, the midsized LNG market our strategy extends to other specialty vessels and facilities for ammonia, ethane and other natural gas liquids. In addition, our brand and skill sets extend the hydrogen storage facilities as well as development of large-scale storage solutions for various clients. We have several clients that are part of the 7 hydrogen hub teams recently selected by the Department of Energy to receive funding under the Bipartisan Infrastructure Law. We are in discussion with these clients on how we can assist them in these programs. We believe there will be significant opportunities for our company in not only these hubs, but also a variety of other projects that are taking advantage of the changing energy mix and federal clean energy funding and tax credits. As we look out into the future, we fully expect our backlog and specialty vessel storage and related facilities to continue to grow with a diversified mix of energy projects. In addition to our storage market strategy, the vision for the rest of the business creates opportunity for growth, expansion and sustainability in revenue. For example, our position for electrical infrastructure services from substations to transmission and distribution and other industrial electrical work, presents a strong growth potential for the company in a market that has significant demand of expansion, upgrades and repair across the country. We are working with technology providers on an increasing number of project opportunities across the country for carbon capture. We continue to be a leading contractor in traditional energy for refinery maintenance and repair, turnarounds and projects, many of which are focused on lower carbon process improvements such as renewable fuel refining. We remain active in crude and refined product storage tanks and terminals, both new build and repair and maintenance. And finally, midstream gas compression, mining and minerals, chemical and petrochemical and aerospace projects on an E-only, C-only or full EPC basis, leverage our engineering capabilities, project skills and construction experience. These service lines, operatings and skill sets, complement each other and support the growth aspirations of the entire business, market capture and geographic diversity of our operations. All these end markets continue to be supported by the strong tailwinds and macroeconomic drivers we have discussed before, which include global energy security, domestic energy supply assurance, clean energy transition goals, commodity demand to support renewables and infrastructure upgrades and industrial reshoring of manufacturing as well as federal infrastructure investments that will start to meaningfully flow into the project phase during calendar year 2024. I can confidently say that we’re executing our strategy from a position of strength. Our backlog has grown by 27% from the end of the fourth quarter of fiscal 2023 and 126% from a year ago. At $1.4 billion, our backlog is at its highest level since June 30, 2015. Even with $1.6 billion of awards these past 4 quarters, our opportunity pipeline remains steady between $5 billion to $6 billion, providing a strong indication of the potential in our markets and ability to continue our long-term trend of backlog growth. Organization has been meaningfully transformed over the past few years. We are focused on the end markets that present the best opportunity for us to leverage our decades of experience. We have restructured our organization to be more cost efficient, while maintaining our skills, expertise and strong brand. We are positioned to safely execute projects with improved operating processes while continuing to deliver best-in-class quality for our customers, and we continue to invest in digital solutions to improve our administrative and project execution performance. While the company is well positioned with a high-quality backlog that contains larger long-term capital projects. It is important to note that our traditional small cap projects and recurring repair and maintenance work, which is strategic to our overall portfolio come in and out of backlog in a shorter time frame. And this work has historically represented on average over 50% of our annual revenue. So to be clear, our strategic market focus and positioning, the macroeconomic and industrial drivers, and the steady opportunity pipeline, combined with our transformed organization, we’ll continue to build on our diversified backlog portfolio, which will lay the foundation for the business to grow and be sustainable well into the future. With that, I’ll hand the call over to Kevin to review the results. Kevin Cavanah: Thanks, John. Overall, the first quarter of fiscal 2024 was in line with our expectations, highlighted by the strong project awards, John previously discussed. Revenue of $198 million during the first quarter was lower than the $206 million in the fiscal 2023 fourth quarter, primarily related to the decrease in the Process and Industrial Facilities segment, which I will discuss shortly, as well as seasonality in our business. The contribution to revenue of newly awarded projects is beginning to benefit the Storage and Terminal Solutions segment but is still currently limited as the projects progress through engineering and planning stages. Gross margin was 6% in the first quarter of fiscal 2024 compared to a gross margin of 7.1% and in the fourth quarter of fiscal 2023. Despite generally strong project execution, gross margins in the first quarter experienced a 470 basis point impact from the under recovery of construction overhead cost. Some of these construction overhead resources have been more actively involved in the pursuit and planning of future work. With the improved backlog, more resources will now shift to the execution of projects. On a consolidated basis, we expect to achieve full recovery of construction overhead costs on higher revenue volumes in the second half of fiscal 2024. Consolidated SG&A expenses were $17.1 million in the first quarter compared to $17 million of SG&A expense in the fourth quarter of fiscal 2023. The first quarter expense includes an additional accrual of $1.6 million associated with the variable accounting for cash settled stock-based compensation, which increased due to a significantly higher stock price. The improved stock price is obviously a positive, we have all been working to achieve, but it does increase expense related to certain stock-based awards that are subject to variable accounting. This increase was offset by various other lower costs as we manage our cost structure, which includes our continued streamlining of the business as well as delaying certain costs based on the timing of revenue. Other income during the first quarter included a gain of $2.5 million on the sale of a previously utilized facility, which was no longer strategic to the future of the business. This transaction is just one of many steps we have taken as we focus the business to its core offerings, improve efficiency and manage our cost structure. As expected, the effective tax rate for the first quarter was zero and we expect the effective tax rate to be around zero throughout fiscal 2024. So for the first quarter of fiscal 2024, we had a net loss of $3.2 million or $0.12 per share compared to a net loss of $0.3 million or $0.01 in the fourth quarter of fiscal 2023. Now let me briefly discuss the operating segments. In the Storage and Terminal Solutions segment, revenue increased to $90 million in the first quarter as compared to $64 million in the fourth quarter of fiscal 2023. Revenue for this segment was positively impacted in the first quarter by the procurement of materials and components for capital projects awarded in the prior fiscal year. We expect revenue to significantly improve in the second half of fiscal 2024. Gross margin of 5.5% improved over the fourth quarter of fiscal 2023 due to strong project execution, but was still negatively impacted by the under-recovery of construction overhead cost. We have allocated additional resources to this segment to support recent awards and additional revenue in the second half of fiscal 2024. As these revenues increase, we expect to eliminate the under-recovery of construction overhead costs in this segment. In the Utility and Power Infrastructure segment, revenue was $32 million in the first quarter compared to $39 million in the fourth quarter due to lower volumes of power delivery work during the summer months. LNG peak shaving work added to backlog over the past year, is expected to positively impact revenue as we move through fiscal 2024. Gross margin of 11.4% was positively impacted by strong project execution, which led to favorable project closeouts as well as LNG peak shaving projects, which have a better margin profile. In Process and Industrial Facilities segment revenue decreased to $75 million in the first quarter of fiscal 2024 compared to $103 million in the fourth quarter of fiscal 2023, primarily due to the completion of certain gas processing work, lower refinery volumes during the summer months and the sale of a noncore business during the fourth quarter of fiscal 2023. Despite generally strong project execution, first quarter gross margin of 6.8% was negatively impacted by low revenue volumes, which led to the under-recovery of construction overhead cost. Now let’s move to the balance sheet. During the first quarter, we utilized $28 million of cash for working capital purposes. This was expected and primarily related to the timing of cash flows on projects. We ended the first quarter with total liquidity of $80 million and $10 million in debt. Our liquidity is comprised of $27 million of unrestricted cash and $53 million of borrowing availability under the credit facility. We also have $25 million of restricted cash to support the facility. We expect to see cash and liquidity increase as we move through the rest of the fiscal year. In fact, an event subsequent to the end of the first quarter also benefits our financial position. In October, we reached a favorable resolution on a longstanding legal dispute with an iron and steel customer that resulted in the receipt of $16.8 million. The amount collected represented the full amount owed under a reimbursable contract which the company had pursued for a number of years. Another subsequent event that warrants mentions is that, with the improving financial position of the company, we repaid all outstanding borrowings under the credit facility in early November. We will continue to proactively manage the balance sheet to support the improving business. On our last call, we provided an outlook for fiscal 2024, which is substantially unchanged. Overall, the results for the first quarter were in line with our expectations. We now expect revenue to be at a similar level in the second quarter and then show strong growth in the second half of the fiscal year as a result of the improved backlog. For the full year, this will create significant year-over-year revenue growth. The bottom line results will follow a similar pattern as the revenue was significantly stronger results in the second half of the fiscal year. We also anticipate accelerated movement toward the longer-term financial targets in the second half of the fiscal year. This concludes my prepared remarks, so I’ll turn it back to John. John Hewitt: Thanks, Kevin. Before we go to questions, I’d just like to reiterate some key takeaways for today. First of all, our strategic approach to the energy and industrial end markets we serve is being validated given the strength of our awards and ultimately backlog. This is supported by a steady opportunity pipeline across these markets. The timing and volume of project awards, our awards will not be linear and there will be some lighter award quarters. But overall, we believe our strategic approach will lead to further backlog growth and strong performance into the future. In the long term, the reshaping of global energy markets, energy supply security, push towards lower carbon activity and industrial reshoring, all create opportunities that we expect will drive our business for years to come. We are well positioned and structured to maximize our profitability and generate value and growth stakeholders. With that, I’d like to open the call for questions. See also Dividend Achievers List Ranked By Yield and 11 Cheap Wide Moat Stocks To Invest In. Q&A Session Follow Matrix Service Co (NASDAQ:MTRX) Follow Matrix Service Co (NASDAQ:MTRX) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions] Our first question comes from Brent Thielman with D.A. Davidson. Brent Thielman : I guess first off, John, I wanted to get just your feel for look, higher cost of capital environment looks to be sustaining going forward. You’re still looking work at an elevated pace, maybe your customers’ reaction to that, how that might be impacting the overall kind of business or bookings pipeline? I imagine maybe the 50% of the business that smaller project work could potentially be susceptible, but love to get your sense on that. John Hewitt: Probably two comments there. One is that we do hear from some customers that they have — that they’re relooking at their portfolio of projects capital projects that they’re doing based on the cost of debt. But I would say that’s a pretty small percentage of our entire client base that we’re kind of hearing those things from. And a lot of that may be mixed up with individual things that they’ve got going on within their organization of how they have spent or overspent their capital in the past year or two. So we’re not hearing a lot of that. Two is that it’s probably not a great market right now for a developer, mid-project, because of the cost of capital but the majority of our clients and the clients that we’re seeing a lot of our backlog growth from are more blue-chip companies that they’ve got a heavy piece of their personal balance sheet and their own cash flows that are funding the projects. And they have a those companies have a tendency to look much longer term on interest rates, the price of energy demand in the market and then appreciating that some of these larger projects take upwards of 3 years to get put in place. So currently, I would say we’re not seeing a major effect on our business on this award cycle. Brent Thielman : That’s encouraging. I guess second was question was on LNG peak shaving projects. You’ve been really active there. And it sounds like the pipeline is pretty busy there with maybe some forthcoming opportunities as well. I think you mentioned the margin profile attached to these is pretty attractive. I was wondering if you could just kind of give us a sense what those look like, maybe relative to kind of the long-term averages you expect from the business from a gross profit perspective. Can these be sort of accretive beyond those targets as you kind of get deeper into execution on them? John Hewitt: Those projects certainly support our consolidated long-range forecast for gross margins; and as we’ve said in the past, in the 10% to 12% range. I think one of the things that support that for those projects is it’s a smaller competitive set for us and the risk and margin profile embedded in the entirety of the project gives us an opportunity to deliver on the margins we need to support the consolidated margin profile of the business. So the levels of contingency and escalation, projects were — these are projects that are getting to be more repetitive, so we’re able to appreciate the risks better and to manage the execution better that we’re able to deliver on those margins. So I think those are a couple of reasons that help us drive the overall business to this more of a consolidated margin profile. Kevin Cavanah : Yes. And I think what’s key here is the consolidated margin profile. As John said, these projects have good margins, but it — one of the other added benefits is that we’ve talked about under-recovery of construction overhead has been a big driver towards our margins not being where we want them to be. And so the volume from these projects will benefit us on that recovery of overhead. Brent Thielman : I guess the last one, I’ll get back in queue. Kevin, I think you’ve sort of indicated look, as you start ramping up on these projects you should see increase in cash generation potential. You’re essentially debt-free at this point. It seems like you could be building some cash on the balance sheet. I guess a two-part question would be, what do you start to think about doing with that cash, John or Kevin? And two, how do we think about kind of the conversion to cash or cash conversion, as again, you’re start ramping up on these projects, just to get a feel for the cash potential this year?.....»»

Category: topSource: insidermonkeyNov 10th, 2023

Helmerich & Payne, Inc. (NYSE:HP) Q4 2023 Earnings Call Transcript

Helmerich & Payne, Inc. (NYSE:HP) Q4 2023 Earnings Call Transcript November 9, 2023 Operator: Good day everyone and welcome to the Helmerich & Payne Fiscal Fourth Quarter Earnings Call. [Operator Instructions] It is now my pleasure to turn today’s conference over to the Vice President of Investor Relations, Dave Wilson. Please go ahead. Dave Wilson: […] Helmerich & Payne, Inc. (NYSE:HP) Q4 2023 Earnings Call Transcript November 9, 2023 Operator: Good day everyone and welcome to the Helmerich & Payne Fiscal Fourth Quarter Earnings Call. [Operator Instructions] It is now my pleasure to turn today’s conference over to the Vice President of Investor Relations, Dave Wilson. Please go ahead. Dave Wilson: Thank you, David and welcome everyone to Helmerich & Payne’s conference call and webcast for the fourth quarter and fiscal year ended 2023. With us today are John Lindsay, President and CEO and Mark Smith, Senior Vice President and CFO. Both John and Mark will be sharing some comments with us after which we’ll open the call for questions. Before we begin our prepared remarks, I’ll remind everyone that this call will include forward-looking statements as defined under the securities laws. Such statements are based on current information and management’s expectations as of this date and are not guarantees of future performance. Forward-looking statements involve certain risks, uncertainties and assumptions that are difficult to predict. As such, our actual outcomes and results could differ materially. You can learn more about these risks in our annual report on Form 10-K, our quarterly reports on 10-Q and our other SEC filings. You should not place undue reliance on forward-looking statements and we undertake no obligation to publicly update these forward-looking statements. We also make reference to certain non-GAAP financial measures such as segment operating income, direct margin and other operating statistics. You’ll find the GAAP reconciliation comments and calculations in yesterday’s press release. With that said, I’ll turn the call over to John Lindsay. John Lindsay: Thank you, Dave. Good morning everyone. Thank you for joining us today. Our fiscal 2023 did not unfold as originally planned, but I want to underscore three noteworthy items that standout in my mind as being pivotal for the company going forward. First, we continue to demonstrate that we are approaching the business differently with a heightened focus on contract economics versus market share. This was evident in fiscal 2022 when the rig count was increasing. In fiscal 2023, the challenges were different as the rig count was only declined much of the year. Yet we still maintained our economic focus and did not revert back to the historical habits of cutting price to maintain market share. Second was the ability of the company to quickly pivot and adapt to a more challenging market while still achieving much of what we set out to do. We generated healthy margins and a reasonable rate of return for stakeholders. Lastly, we returned approximately 10% of our market capitalization to shareholders through base and supplemental dividends and share repurchases, all of this while maintaining a strong balance sheet. Turning to the details of fiscal 2023, rig demand was negatively impacted by geopolitical and economic uncertainties that influenced the global oil market, as well as warmer than expected winter weather which suppressed pricing in the U.S. natural gas market. Again, we quickly adapted to the market conditions and maintained focus on achieving economic returns above our cost of capital with evidence of coming to traditional focus on market share. Despite the adversity, H&P delivered differentiated commercial value to its customers in return for compelling contract economics. Even though the industry super-spec rig count declined during much of 2023, we expect activity will increase in 2024 but at levels below the highs seen last year. Those incremental super-spec rigs adds will most likely tighten effective super-spec market utilization well above the 80% level, which historically has been favorable for us from a pricing perspective. Direct margins per day held up relatively well during the fourth fiscal quarter despite the industry decline in rig activity. Notwithstanding the drag created by the sidelining of higher priced spot market rigs during the past couple of quarters, we were able to maintain and slightly improve our revenue per day during the quarter. Nevertheless our expense per day did trend higher and we will comment on that further. Looking ahead to the next quarter, our guidance suggests our margins will be flat to up slightly. Our ability to drive consistent and reliable value for customers through operations and technology solutions ultimately determines market share over the long term. The adoption of performance-based contracts increased to 52% in the fourth quarter from 41% a year ago. These contracts deploy H&P’s suite of technology solutions that help to drive strong performance and greater reliability. Drilling services make up only a small portion of the overall cost of a well, but rig performance can have an outsized influence on the ultimate economics of the project. Identifying, measuring and then consistently delivering solutions and technologies to improve efficiency and drilling outcomes creates a win-win for both H&P and our customers, improving the financial returns for both as well. An important element within our contract economics are the operational costs involved in providing our services. Over the past two years, we have experienced increases in operational expenses due to rising labor costs and consumable inventory consumption and cost inflation. A less visible but growing variable is the cost acceleration in equipment related to running H&P’s FlexRig fleet harder than ever before to achieve the well designs, lateral lengths and the drilling efficiencies for our customers. We’ve seen the inflation related to labor and consumable inventory items decrease somewhat in 2023. However, it is being offset by the service intensity required to maintain rigs and equipment at standards that will continue to drive performance and efficiency gains. Let me provide an example. In the last 10 years, average lateral length has doubled to over 10,000 feet, and at the same time, the well cycle times have improved by 22%. This means that each FlexRig today drills about 4.5 more wells on average per year and those rigs have doubled the exposure to the resource. In 2023, the fleet actually drilled 15 million more feet of wellbore working 33 fewer rigs than a decade ago. This is an example of service intensity and a significant cause of increasing costs related to higher operational costs required to deliver consistency, efficiency and the increased volume of work each rig is now expected to produce. To put a finer point on the magnitude of these cost increases and the impact on our contract economics, North America Solutions operating costs have increased over 50% since 2014. Like most businesses, we are also experiencing inflationary pressures in our non-operational expenses, particularly around labor and third-party services which are key drivers behind our projected increase in selling, general and administrative expenses. Mark will give more details on this in his remarks. We have begun to capitalize on unconventional opportunities outside the U.S., enabling us to further diversify our operations over the long term. I’m pleased with the early signs of success here, particularly with our recent tender award with Saudi Aramco and the operations of our first super-spec rig in the Beetaloo Basin in Australia. In fiscal 2024, we plan to build on this momentum and continue to deploy capital for future international growth opportunities. We’re also thankful for celebrating 50 years in Colombia, 25 years in Argentina and the consistent contribution from our Offshore Gulf of Mexico operation and we’re excited about the potential contribution from these segments in the years to come. Shifting to our efforts focused on the energy transition, we are furthering our strategy of deploying capital and expertise to companies advancing innovative approaches to energy. As an example, our investments in geothermal are helping to develop an alternative carbon-free 24/7 power source. We’re providing unconventional drilling learnings and FlexRig technology solutions to enhance and enable next generation geothermal contracts. A recent highlight is the encouraging progress in the field with one of our geothermal investees, Fervo Energy. We’re currently drilling the fifth well of a multi-year drilling campaign in Utah. This is their first geothermal development project, which will include constructing the second largest geothermal plant in the U.S. and with plans of producing 400 megawatts of geothermal power by 2028. H&P’s super-spec FlexRig-3 along with our technology suite has surpassed our customers anticipated performance targets. Our strategic alliances with Fervo and our other innovative companies have put us firmly on the path to participate in next-generation geothermal opportunities and grow our unconventional geothermal drilling expertise to a larger scale. In addition to our operational and growth accomplishments during the year, we believe an essential ingredient in achieving shareholder success is having a multi-pronged approach to capital allocation. First and foremost, we prioritize the Company’s longstanding posture of a strong financial position and fiscal prudence. Second, we look to invest in organic projects with attractive returns so that we can continue to lead the industry in the U.S. and develop future growth internationally. Finally, we seek to return capital to shareholders. We have an established base dividend augmented by supplemental dividends and share repurchases when those opportunities exist. Mark will provide additional details about the plan in his remarks. I’m proud of the H&P’s team service attitude and strategic achievements this fiscal year and we’ll remain vigilant as we navigate through 2024. We enter this new year with a sense of optimism around the U.S. market and international opportunities, as well as what we can deliver to both customers and shareholders. We believe the outlook over the next several years is encouraging for our industry. The long-term energy fundamentals are strong and as such H&P remains ready and we’ll continue to take actions to ensure future success for the company. And with that I’ll turn the call over to Mark. Mark Smith: Thanks, John. Today, I will review our fiscal fourth quarter and full year 2023 operating results, provide guidance for the first quarter and full fiscal year 2024 as appropriate and comment on our financial position. Let me start with highlights for the recently completed fourth quarter and fiscal year ended September 30th, 2023. The company generated quarterly revenues of $660 million versus $724 million in the previous quarter. The decrease in revenue was primarily due to the expected reduction in active rig count for the North America Solutions fleet. Correspondingly, total direct operating costs incurred were $410 million for the fourth quarter versus $430 million for the previous quarter. The sequential decrease was driven by the aforementioned reduction in activity. But this decline was somewhat muted by lower-fixed cost absorption and maintenance and supply expense intensity, which ended up being on the higher end of the range this quarter. General and administrative expenses totaled $56 million for the fourth quarter and $207 million for fiscal 2023, which is generally in line with our expectations. The fiscal ’23 effective tax rate was approximately 27%, which is within the previously guided range. To summarize fourth quarter’s results, H&P earned a profit of $0.77 per diluted share versus $0.93 in the previous quarter. Earnings per share were positively impacted by a net $0.08 gain per share of select items, which was primarily made up of gains on investment securities and settlements of outstanding claims, partially offset by a blue chip swap transaction. Absent these select items, adjusted diluted earnings per share was $0.69 in the fourth fiscal quarter compared with an adjusted $1.09 during the third fiscal quarter. Capital expenditures for the fourth quarter were $114 million, with full fiscal 2023 totaling $395 million, which was generally in line with our expectations from the July earnings call. H&P generated $215 million in operating cash flow in the fourth quarter and a total of $834 million during the full fiscal 2023. Our cash flow generation funded $846 million in capital deployment, including $395 million of CapEx, $104 million in base dividends and $98 million in supplemental dividends and $249 million in share repurchases together with related excise taxes. We will discuss our expected accretive fiscal ’24 cash generation and cash position later in these remarks. Turning to our three segments, beginning with the North America Solutions segment, we averaged 149 contracted rigs during the fourth quarter, down from an average of 166 rigs in fiscal Q3. We exited the fourth quarter with 147 contracted rigs, which was at the high end of our expectation. Note that the 147 rigs corresponds to approximately 80% utilization of the super-spec rigs that have worked within the last year. Revenues were sequentially lower by $66 million due to the expected sequential decrease in the number of working rigs. Segment direct margin was $239 million, within our July guidance range. Total segment per day expenses, excluding reimbursables, increased to $19,800 during the fourth quarter from $18,700 per day in the third quarter. As discussed in our press release, this was above our expectations due in part to maintenance and supplies expense from rigs running harder. Further cost drivers include rig churn and decrease in labor and overhead absorption. During this trough period, we retained crew personnel and regional specialty positions and rig fabrication and maintenance facility staff, resulting in a lower scale absorption during the quarter. Additionally, the segment incurred a $150 per day related charge related to the change in the fair value of a contingent liability related to an acquisition earn-out based on operating performance metrics. Looking ahead to the first quarter of fiscal 2024 for North America Solutions, as of today’s call, we have 147 contracted rigs. The contractual churn has been higher than expected, which has kept our activity level relatively flat thus far in the quarter. That said, we expect to end our first fiscal quarter with between 150 and 156 rigs working and are anticipating some additional adds in fiscal Q2. Our current revenue backlog from our North America Solutions fleet is roughly $1.1 billion for rigs under term contract, up from $900 million in the previous quarter. As of today, approximately 60% of the U.S. active fleet is on a term contract. As activity increases, we expect our average pricing levels to remain steady given that spot pricing levels have remained relatively stable and above lower-rate legacy term contracts that continue to roll into the current pricing environment. In the North America Solutions segment, we expect direct margins in fiscal Q1 to range between $235 million to $255 million. Given that 70% to 75% of our daily costs are labor-related, it is typical to see seasonal declines from payroll taxes, et cetera. In general, our operating costs have increased approximately 25% since the end of fiscal 2019 and are anticipated to continue near current levels due to several factors, including the aforementioned materials and supplies inventory consumption as a result of longer laterals, labor expenses elevated by two inflation adjustments in the past two years and supply chain cost inflation. Further, continued rig churn drives cost levels higher. These increased costs are one of the many reasons we are acutely focused on maintaining recently achieved pricing levels as we strive to earn appropriate returns on our investments. Regarding our International Solutions segment, we had approximately 13 rigs active at September 30 as expected and sequentially flat from prior quarter. As a reminder, we revised international guidance via our October 18 press release as a result of accelerating some rig commissioning due to timing efficiencies at our Houston facility and due to certain ex-pat labor expenses. Further, we experienced a 4.6 million foreign exchange loss on Argentina pesos in country based on the devaluation of the official exchange rate in this segment, which is in the segment results. Separately, we experienced a $12 million investment loss related to accessing the blue chip swap effective parallel exchange mechanism in Argentina. Although we took this investment loss, we were able to repatriate that $9.8 million to the U.S. which otherwise would not have been available. Looking towards the first quarter of fiscal 2024 for the International segment, we expect to idle one rig in Argentina mid-quarter, with all other countries remaining at constant activity levels. Aside from any foreign exchange impacts, we expect to have between $7 million to $10 million in direct operating contribution – direct margin contribution in the first quarter. Turning to our Offshore Gulf of Mexico segment, as expected, we completed the demobilization of a rig in the fourth fiscal quarter and now have three of our seven offshore platform rigs contracted. We have management contracts on three customer-owned rigs, one of which is on active rate. Offshore generated a direct margin approximately $7 million during the quarter, which was within our guided range. As we look towards the first quarter of fiscal 2024 for the Offshore Gulf of Mexico segment, we expect that it will generate between $3 million to $7 million in direct margin, which is down sequentially primarily due to the stacking of the aforementioned rig. Now let me look forward to the first fiscal quarter and full fiscal year 2024 for certain consolidated and corporate items. Let me start by reiterating features in our multi-pronged approach to capital allocation that John mentioned earlier. Our strategy is to maintain our strong balance sheet together with investment-grade credit metrics, to invest in maintaining our market leading North America Solutions fleet and to deploy capital to support growth and diversification opportunities internationally with prudent investments in our rig fleet. Finally, our recently announced 2024 supplemental shareholder plan, returns land, continues our strategy introduced a year ago to flexibly augment value to shareholders. As discussed in our October ’18 press release and in yesterday’s release, our fiscal 2024 CapEx has three buckets, North America, International and Corporate and information technology. Our bucket of North America Solutions includes maintenance CapEx costs, which are anticipated to push above the high end of the fiscal 2023 range due in part to fiscal year 2023 supply chain delays in capital spending for component equipment refurbishment and recertification that has rolled into fiscal year 2024. Fiscal ’24 maintenance CapEx per active rig should approximate $1.3 million to $1.5 million per active rig based on current bottoms-up maintenance facility and supply chain throughput expectations. This level of capital intensity has some inflation built in from the last couple of years, but it also – it is also at a projected high point due to continued catch-up spending from the 2020 downturn. The international bucket primarily consists – excuse me, international bucket partially consists of a planned minor upgrade of three rigs in Argentina utilizing funds currently in-country to take them to full super-spec capacity. We plan to continue converting slightly over one rig per month to walking capability at our Houston facility, resulting in approximately 14 conversions in fiscal ’24. These conversions will be split between North America Solutions and international exports, depending on the successful outcomes of current and anticipated international bids and on the U.S. customer demand at attractive rates and terms. The final bucket of corporate and information technology consists primarily of enterprise, financial and operating system upgrades and rig communications improvements. Depreciation for fiscal 2024 is expected to be approximately $390 million. Our sales, general and administrative expenses for the full fiscal 2004 year are expected to be approximately $230 million, which is up from the prior year. We have continued to build capabilities to support the Company, including expertise that has aligned pricing with the value delivered in North America and in securing initial Middle East international growth. We have also introduced several software-as-a-service solutions to improve our data and analysis in many areas. And finally, we have experienced inflation across many functional areas in 2023 for labor and third-party services, for which we will bear the full run rate in fiscal 2024. Our investment in research and development remains largely focused on solutions for our customers, such as drilling automation, wellbore quality and power management. We anticipate R&D expenditures to be approximately $30 million in 2024. We are expecting an effective income tax rate range of 24% to 29%, with the variance above the U.S. stat rate of 21% driven by state and foreign taxes. Based upon an estimated fiscal ’24 operating results and CapEx, we are projecting a consolidated cash tax rate range of $150 to $200 million. Now looking at our financial position, Helmerich & Payne had cash and short-term investments of approximately $350 million at September 30, 2023 versus $293 million at June 30. Including the availability under our revolving credit facility, our liquidity remains at approximately $1.1 billion. As announced in their October press release, subject to ongoing board approval, we plan to pay supplemental dividends across fiscal 2024 of about $68 million, which is approximately 50% of the projected remaining cash flow after CapEx and after our established base dividend. In essence, over two-thirds of cash flow after CapEx is planned to be returned to shareholders, with approximately one-third remaining for flexibility. As of today, this flexible $68 million unallocated, together with our current $350 million in cash and short-term equivalents on hand, provides us with much flexibility for accretive investments, opportunistic share buybacks and/or further supplemental dividends. Future capital allocation plans look to further add to our long-standing priority of returning cash to shareholders, increasing the roughly $3.1 billion of cash that we have returned to shareholders during the past 10 years through dividends and share repurchases. That concludes our prepared comments for the fourth fiscal quarter. Let me now turn the call over to David Creed for questions. See also 13 Best DRIP Stocks To Own and 12 Dogs of the Dow Dividend Stocks to Buy. Q&A Session Follow Helmerich & Payne Inc. (NYSE:HP) Follow Helmerich & Payne Inc. (NYSE:HP) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions] We will take our first question from David Smith with Pickering Energy Partners. Please go ahead. Your line is open. David Smith: Hi, good morning. If you can indulge me for just a second — John Lindsay: David. We can barely hear you. If you can speak up a bit. David Smith: Okay. Is this any better? John Lindsay: Yes, that’s much better, David. Thank you. David Smith: Okay, sorry about that. If you could indulge me for just a second so I can properly frame the question. I wanted to acknowledge the impressive leadership and success on the pricing discipline, the strong shareholder returns generated. Not many companies returning almost 50% of EBITDA to shareholders in ’23. But then I look at the international CapEx program, which I think was around $100 million to $110 million in fiscal ’23. I think it looks closer to $150 million, $160 million for fiscal ’24. I see a segment that generated $25 million of direct margin this last fiscal year. And just wanted to ask if you can kind of remind us what the investment is targeting in terms of what kind of activity levels you’re ultimately targeting, the timing to get there. Any other you might want to bring to the international growth aspirations? John Lindsay: Thank you, David. That’s, that’s a great question. I did want to mention that we do have a lot of aspirational growth internationally. I also wanted to be clear that there are multiple tender bids that are going on, multiple countries really. And so at this stage of the game, we’re really not in a position where we want to give out a lot of information related to that as far as just the details, just for competitive advantages – competitive reasons. I think in the next couple of months, we’ll be able to get quite a bit more color on that. But suffice it to say, our intention is to continue to invest in the FlexRig fleet that’s here in the U.S. and look to export that capacity international. Mark Smith: I might just add a couple of footnotes Dave. Over the long term, obviously, our goal is to grow the percentage of the corporation’s consolidated EBITDA in international by exporting some of these rigs that are suited for unconventional emerging markets overseas. But we’re not giving any specifics related to those targets. It’s a long process and we had a couple of key wins that John mentioned in the prepared remarks, Saudi Arabia and Australia that will happen this year, but we’re trying to do these investments, obviously generating returns, like a double-digit ROIC that we achieved in fiscal 2003 through time. And as John said, we want to be, for competitive reasons, we don’t want to talk a lot about specifics with these. Suffice it to say, that we have some ongoing current bids and some others that we anticipate coming down the pipeline and in the near term we can put some rigs to work in the U.S. for short-term contracts having these available for longer-term export opportunities. I’m confident that we will generate returns on the investments made. David Smith: Great. I appreciate all the color and look forward to the announcements when you’re able to make them. If I could sneak a quick follow-up in there, and sorry if I missed this. But just thinking about the fiscal Q1 guidance for North America Solutions with margins. I think the implied daily margin flat to slightly up. I was just wondering if you could share your view on how the daily OpEx is impacting the Q1 guidance? Mark Smith: Yes, David, I appreciate the question. Costs were higher as we mentioned in the fiscal fourth quarter. And I would just put it into three buckets really for simplification. I think we’re over 1,000 to 1,100 versus a lot of analyst estimates. And I would say call it 300 of that was related to labor absorptions. So with increasing rigs, that will come down. Another 200 or so related to the higher materials and supplies consumption and intensity, which appears to be with us for a bit. But the balance – the rest, really, are a hodgepodge of other items that should not reoccur. David Smith: Okay, great color, I appreciate that. I will turn it back. John Lindsay: David. Thank you. Operator: We’ll take our next question from Kurt Hallead with Benchmark. Please go ahead. Your line is open. Kurt Hallead: Hi, good morning. John Lindsay: Morning, Kurt. Kurt Hallead: I appreciate the color and the commentary. So I’m kind of curious, right, as to the – you mentioned expectation for improved activity out into 2024 and those levels of activity will not quite get back to the highs that were reached in 2023. And then you kind of provided incremental color around 80% plus utilization for super-spec rigs. So just kind of curious as to what you’re hearing from the E&P client base. Until recently, I guess, it’s just kind of bled rigs lower and what – what’s kind of providing the impetus for them maybe to turn things back on going into 2024? John Lindsay: Well, I think if you look at the activity levels during the course of the year, obviously early on a lot of the activity declines were related directly to natural gas, natural gas pricing. As we’ve gone through the year, what we’ve seen is a lot of a lot of churn associated with a lot of different reasons, but whether it’s budget driven, whether it’s production driven. A lot of this goes, Kurt, goes back to the capital discipline that the industry is showing, E&Ps, our customers are showing, which again I think is healthy for the industry. So in many cases, we’re seeing somewhat of a reset in their capital budgets for the next year, is largely what we’re seeing. I mean I think in general I think consensus has 40 to 60 rigs on average being added for 2024. And I think that’s a reasonable expectation. And if you look at it as it relates to our current market share, I think it really fits in with what we’re describing for our first quarter fiscal Q4. Kurt Hallead: Okay, I appreciate that. Now maybe follow up is, as you indicated, right, the substantial efficiency gains, FlexRig drills and so on, leading to fewer, I guess, ultimately leading to fewer number of rigs needed by the industry, at least in the U.S. market kind of going forward. So in that context, it seems to me like part of that is playing into your strategy to pursue some of these international opportunities. Am I reading too much into that?.....»»

Category: topSource: insidermonkeyNov 10th, 2023