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Contract manufacturer Intandem Solutions shifts to commercial business

This nonprofit, that offers employment services to people with developmental disabilities, lost 30% of revenue with the end of subsidy programs in 2020. As a result, it's transitioning to a commercial business......»»

Category: topSource: bizjournalsJun 23rd, 2022

FuelCell Energy Reports Second Quarter of Fiscal 2022 Results

Second Quarter Fiscal 2022 Financial Highlights(All comparisons are year-over-year unless otherwise noted) Revenues of $16.4 million compared to $14.0 million Gross loss of $(7.3) million compared to $(4.8) million Loss from operations of $(28.2) million compared to $(17.4) million Backlog of $1.33 billion as of April 30, 2022, compared to $1.32 billion as April 30, 2021 DANBURY, Conn., June 09, 2022 (GLOBE NEWSWIRE) -- FuelCell Energy, Inc. (NASDAQ:FCEL) -- a global leader in decarbonizing power and producing hydrogen through our proprietary, state-of-the-art fuel cell platforms to enable a world empowered by clean energy -- today reported financial results and key business highlights for its second quarter ended April 30, 2022. "We continue to execute on our Powerhouse business strategy, and we are very pleased with our progress over the past few months, including extending our Joint Development Agreement with ExxonMobil related to our carbon capture solution and growing our generation revenue after commencing commercial operations of the 7.4 MW LIPA Yaphank fuel cell project," said Mr. Jason Few, President and CEO. "Additionally, we expect to further bolster our generation portfolio revenue with the addition of the 7.4 MW Groton Sub Base project to our generation portfolio which we expect to be placed in service this summer." "Following the achievement of a critical technical milestone associated with our differentiated carbon capture application under the Joint Development Agreement with ExxonMobil Technology and Engineering Company or EMTEC (formerly known as ExxonMobil Research and Engineering Company), we entered into an extension of our collaborative development agreement enabling the two companies to continue working to advance fuel cell carbon capture and storage technology closer to commercialization," continued Mr. Few. "Not only will we work to advance the technology for various carbon capture applications, but we are also conducting a joint market study to define application opportunities and commercialization strategies and identify partners for potential pilot/demonstration projects in our pursuit of carbon capture from a broad landscape of industrial applications. We continue to support ExxonMobil's technology readiness review ahead of a potential deployment of the technology at an ExxonMobil facility. We are proud of the progress being made toward commercializing our unique carbon capture solution." Mr. Few added, "Beyond our work with EMTEC and other funded programs such as our recently announced carbon capture project with Canadian National Resources Limited and our U.S. Department of Energy solid oxide programs, we continue to invest in internal research and development activities with a focus on commercialization of our advanced technologies at an accelerated pace. Spending in this area has increased over 150% from the comparable prior year quarter, as we invest in our patented solid oxide platform. Our solid oxide development team is focused on both megawatt scale electrolysis and sub-megawatt power generation, and we are currently in the process of designing and building prototypes of our commercial offerings for each." "FuelCell Energy delivered increased revenue in the second fiscal quarter, compared to the comparable prior-year quarter, reflecting higher Service and Generation revenues. No modules were delivered to POSCO Energy's subsidiary, Korea Fuel Cell Co., Ltd. ("Korea Fuel Cell"), in the second fiscal quarter. However, of the initial twelve module order which Korea Fuel Cell was required to make under the terms of the Settlement Agreement, we expect to deliver additional modules from that order in the third quarter of fiscal 2022 and, pursuant to the terms of the Settlement Agreement, we expect Korea Fuel Cell to place a non-cancelable order for eight additional modules by June 30, 2022. We continue to target delivery of all 20 modules by the end of fiscal year 2022," said Mr. Few. "Additionally, we continue to invest in scaling our commercial organization in Korea in support of building a pipeline of opportunities in the Korean and broader Asian market." "Achieving commercial operation of our 7.4 MW fuel cell platform located on the U.S. Navy Sub Base located in Groton, CT will be a milestone for FuelCell Energy. When commissioning is complete, this project is expected to demonstrate our high quality and reliable clean energy solution to enable electrical resiliency with some of the country's most critical infrastructure, while supporting the U.S. Navy's decarbonization goals," continued Mr. Few. "The project contains two fuel cell platforms, one of which has been fully commissioned and load tested. The second platform requires additional component work, and once complete we will resume the final stages of commissioning." Mr. Few concluded, "During the quarter, we hosted our 2022 Investor Day, our first as a Company, where we discussed the unique solutions we deliver, the market opportunities that we believe our technologies address, how we see our Company evolving over the next several years, and ultimately what it means for our stakeholders. We are in a dynamic period of transition at FuelCell Energy as we work to launch several new solutions in support of the accelerating energy transition. During our Investor Day, we highlighted the approximately $2 trillion in combined, cumulative total addressable market opportunities through 2030 which we believe may be served by our commercially available solutions and solutions that are actively under development by the Company. We also shared our aspiration to have a substantial impact on addressing climate change and deliver revenue of over $300 million by the end of fiscal year 2025 and revenue of over $1 billion by the end of fiscal year 2030. In order to reach these goals, we are, among other things, investing in commercializing our technologies and adding to our capabilities, both in terms of manufacturing capacity and talent." Consolidated Financial Metrics In this press release, FuelCell Energy refers to various GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures. The non-GAAP financial measures may not be comparable to similarly titled measures being used and disclosed by other companies. FuelCell Energy believes that this non-GAAP information is useful to gaining an understanding of its operating results and the ongoing performance of its business. A reconciliation of EBITDA, Adjusted EBITDA and any other non-GAAP measures is contained in the appendix to this press release.                       Three Months Ended April 30,         (Amounts in thousands)   2022        2021      Change          Total revenues $   16,384      $    13,953      $       2,431           Gross loss   (7,310 )     (4,756 )            (2,554 )         Loss from operations   (28,217 )     (17,390 )     (10,827 )         Net Loss   (30,126 )     (18,917 )     (11,209 )         Net loss attributable to common stockholders   (31,017 )     (19,717 )     (11,300 )         Net loss per basic and diluted share $       (0.08 )   $        (0.06 )   $       (0.02 )                             EBITDA   (22,885 )     (12,582 )     (10,303 )         Adjusted EBITDA $   (21,189 )   $    (11,329 )   $     (9,860 )                                         Second Quarter of Fiscal 2022 Results Note: All comparisons between periods are between the second quarter of fiscal 2022 and the second quarter of fiscal 2021, unless otherwise specified. Second quarter revenue of $16.4 million represents an increase of 17% from the comparable prior-year quarter. Service agreements revenues increased 300% to $2.6 million from $0.7 million. The increase in revenues for the second quarter of fiscal 2022 is primarily due to the fact that there was a refurbished module exchange and non-routine maintenance activities during the quarter. Generation revenues increased 46% to $9.1 million from $6.2 million, primarily due to the completion of the Long Island Power Authority ("LIPA") Yaphank project during the three months ended January 31, 2022 and the higher operating output of the generation fleet portfolio as a result of module replacements during the last six months of fiscal year 2021. Advanced Technologies contract revenues decreased 34% to $4.7 million from $7.1 million. Compared to the second quarter of fiscal 2021, Advanced Technologies contract revenues recognized under the Joint Development Agreement with EMTEC were approximately $3.2 million lower during the second quarter of fiscal 2022, offset by an increase in revenue recognized under government contracts and other contracts of $0.9 million for the second quarter of fiscal 2022. Gross loss for the second quarter of fiscal 2022 totaled $(7.3) million, compared to a gross loss of $(4.8) million in the comparable prior-year quarter.  The increase in gross loss was driven by higher manufacturing variances, $4.8 million of non-recoverable costs related to construction of the Toyota project, and lower Advanced Technologies margin, partially offset by reduced generation gross loss (excluding the impact of non-recoverable costs related to construction of the Toyota project) and reduced service gross loss.   Operating expenses for the second quarter of fiscal 2022 increased to $20.9 million from $12.6 million in the second quarter of fiscal 2021. Administrative and selling expenses increased due to higher sales, marketing and consulting costs, as the Company is investing in rebranding and accelerating its sales and commercialization efforts including increasing the size of its sales and marketing teams, which resulted in an increase in compensation expenses from an increase in headcount. Research and development expenses of $7.7 million during the quarter, up from $3.0 million in the second quarter of fiscal 2021, reflect increased spending on the Company's hydrogen commercialization initiatives, namely the ongoing commercial development efforts related to our solid oxide platform. Net loss was $(30.1) million in the second quarter of fiscal 2022, compared to net loss of $(18.9) million in the second quarter of fiscal 2021 driven by a higher gross loss and higher operating expenses. Additionally, interest expense was higher in the second quarter of fiscal 2022 compared to the second quarter of fiscal 2021. Adjusted EBITDA totaled $(21.2) million in the second quarter of fiscal 2022, compared to Adjusted EBITDA of $(11.3) million in the second quarter of fiscal 2021. Please see the discussion of non-GAAP financial measures, including Adjusted EBITDA, in the appendix at the end of this release. The net loss per share attributable to common stockholders in the second quarter of fiscal 2022 was $(0.08), compared to $(0.06) in the second quarter of fiscal 2021. The higher net loss per common share is primarily due to the higher net loss attributable to common stockholders, partially offset by the higher number of weighted average shares outstanding due to share issuances since April 30, 2021. Cash, Restricted Cash and Financing Update Cash and cash equivalents and restricted cash and cash equivalents totaled $489.6 million as of April 30, 2022 compared to $460.2 million as of October 31, 2021. Unrestricted cash and cash equivalents totaled $467.8 million compared to $432.2 million as of October 31, 2021. Restricted cash and cash equivalents were $21.8 million, of which $5.3 million was classified as current and $16.5 million was classified as non-current, compared to $28.0 million of restricted cash and cash equivalents as of October 31, 2021, of which $11.3 million was classified as current and $16.7 million was classified as non-current. During the second quarter of fiscal 2022, the Company sold approximately 19.9 million shares of common stock under its at-the-market offering program, resulting in total gross proceeds of $120.8 million and net proceeds to the Company of approximately $118.3 million. Operations and Commercialization Update During the quarter, the Company continued to make progress on projects for which we have executed power and/or hydrogen purchase agreements, with updates regarding certain current projects provided below.      Groton Sub Base. The commissioning process has been completed on one of the two platforms installed onsite. The second platform requires additional component work, and once complete, we will resume the final stages of commissioning and expect the project to be commercially operational this summer. The project, when commercially operational, will be added to our generation portfolio. Incorporation of the platform into a microgrid is expected to demonstrate the capacity of FuelCell Energy's platforms to increase grid stability and resilience while supporting the U.S. military's efforts to fortify base energy supply and demonstrate the U.S. Navy's commitment to clean, reliable power with microgrid capabilities. Toyota -- Port of Long Beach, CA. This 2.3 MW trigeneration platform will produce electricity, hydrogen and water. Fuel cell platform equipment has been built and delivered to the site, and civil construction work has significantly advanced. We are nearing the completion of the construction phase of the project, with the remaining construction activity anticipated to be completed in late 2022 or early 2023. As a result, while we have made substantial progress, we do anticipate that commercial operations will be delayed beyond June 30, 2022, and an extension to our Hydrogen Power Purchase Agreement ("HPPA") will be required from Toyota who may or may not grant such extension in its sole discretion. Derby, CT. On-site civil construction of this 14.0 MW project continues to advance, the Company has largely completed the foundational construction, and balance of plant components have been delivered and installed on site. This utility scale fuel cell platform will contain five SureSource 3000 fuel cell systems that will be installed on engineered platforms alongside the Housatonic River. To date, the Company has invested approximately $18.3 million into the project, with the majority of site work complete and the electrical and mechanical balance of plant installed. The Company continues work with the utility customer, United Illuminating, on the interconnection process, the timing of which will drive the continued development of the site, including the delivery of the 10 fuel cell modules required to complete the project. Manufacturing Output, Capacity and Expansion. For the three months ended April 30, 2022, we operated at an annualized production rate of approximately 40.8 MW, which is an increase from the annualized production rate of 32 MW for the three months ended April 30, 2021. We are working to increase our production rate during fiscal year 2022 and are targeting achieving a rate capable of producing 45 to 50 MW on an annualized basis during fiscal year 2022. At this time, the maximum annualized capacity (module manufacturing, final assembly, testing and conditioning) is 100 MW per year under the Torrington facility's current configuration when being fully utilized. The Torrington facility is sized to accommodate the eventual annualized production capacity of up to 200 MW per year with additional capital investment in machinery, equipment, tooling, and inventory. We expect to make investments in fiscal year 2022 in our factories for molten carbonate and solid oxide production capacity expansion; the addition of test facilities for new products and components; the expansion of our laboratories; and upgrades to and expansion of our business systems. Commercialization Update. The Company continues to advance its solid oxide platform research, including the anticipated delivery in fiscal 2022 of a high-efficiency electrolysis platform to Idaho National Laboratories for demonstration. This project, done in conjunction with the U.S. Department of Energy, is intended to demonstrate that the Company's platform can operate at higher electrical efficiency than currently available electrolysis technologies through the inclusion of an external heat source. To further accelerate the commercialization activity for the solid oxide platform, the Company recently commenced the design and construction of two advanced prototypes: (i) a 250 kW power generation platform, and (ii) a 1 MW high-efficiency electrolysis platform. Backlog                     As of April 30,     (Amounts in thousands) 2022    2021    Change Product $ 60,247   $ -   $ 60,247   Service   121,287     141,427     (20,140 ) Generation   1,109,293     1,115,573     (6,280 ) License   -     22,182     (22,182 ) Advanced Technologies   35,393     44,972     (9,579 ) Total Backlog $ 1,326,220   $ 1,324,154   $ 2,066                       Backlog increased by approximately 0.2% to $1.33 billion as of April 30, 2022, compared to $1.32 billion as of April 30, 2021, primarily as a result of the addition of product sales backlog, partially offset by a reduction in Service and Advanced Technologies backlog, and reflecting the continued execution of backlog and adjustments to generation backlog. Specifically, changes to backlog reflect: (i) the addition of product sales backlog from the module order received from KFC and (ii) module exchanges in our Generation portfolio that are expected to contribute to higher future output and revenues. Advance Technologies backlog reflects new contracts from the U.S. Department of Energy, partially offset by work performed under our Joint Development Agreement with EMTEC. Note that approximately $22.2 million of backlog which was previously classified as "Service and license" backlog was reclassified to "Product" backlog as a result of the settlement agreement with POSCO Energy and KFC. This amount represents the value of the performance guarantee associated with KFC's module order. Only projects for which we have an executed power purchase agreement ("PPA") or an executed HPPA are included in generation backlog, which represents future revenue under long-term agreements. Together, the service and generation portion of backlog had a weighted average term of approximately 18 years, with weighting based on the dollar amount of backlog and utility service contracts of up to 20 years in duration at inception. Backlog represents definitive agreements executed by the Company and our customers. Projects sold to customers (and not retained by the Company) are included in product sales and service backlog and the related generation backlog is removed upon the sale. Conference Call Information FuelCell Energy will host a conference call today beginning at 10:00 a.m. EDT to discuss second quarter results for fiscal year 2022 as well as key business highlights. Participants can access the live call via webcast on the Company website or by telephone as follows: The live webcast of the call and supporting slide presentation will be available at www.fuelcellenergy.com. To listen to the call, select "Investors" on the home page, proceed to the "Events & Presentations" page and then click on the "Webcast" link listed under the June 9 earnings call event, or click here. Alternatively, participants can dial 646-960-0699 and state FuelCell Energy or the conference ID number 1099808. The replay of the conference call will be available via webcast on the Company's Investors' page at www.fuelcellenergy.com approximately two hours after the conclusion of the call. Cautionary Language This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding future events or our future financial performance that involve certain contingencies and uncertainties, including those discussed in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021 in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations". The forward-looking statements include, without limitation, statements with respect to the Company's anticipated financial results and statements regarding the Company's plans and expectations regarding the continuing development, commercialization and financing of its current and future fuel cell technologies , the expected timing of completion of the Company's ongoing projects, the Company's business plans and strategies, the markets in which the Company expects to operate, and the size and scope of its total addressable market opportunities, which is an estimate based on currently available public information and the application of management's current assumptions and business judgment. Projected and estimated numbers contained herein are not forecasts and may not reflect actual results. These forward-looking statements are not guarantees of future performance, and all forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could cause such a difference include, without limitation: general risks associated with product development and manufacturing; general economic conditions; changes in interest rates, which may impact project financing; supply chain disruptions; changes in the utility regulatory environment; changes in the utility industry and the markets for distributed generation, distributed hydrogen, and fuel cell power plants configured for carbon capture or carbon separation; potential volatility of commodity and energy prices that may adversely affect our projects; availability of government subsidies and economic incentives for alternative energy technologies; our ability to remain in compliance with U.S. federal and state and foreign government laws and regulations and the listing rules of The Nasdaq Stock Market; rapid technological change; competition; the risk that our bid awards will not convert to contracts or that our contracts will not convert to revenue; market acceptance of our products; changes in accounting policies or practices adopted voluntarily or as required by accounting principles generally accepted in the United States; factors affecting our liquidity position and financial condition; government appropriations; the ability of the government and third parties to terminate their development contracts at any time; the ability of the government to exercise "march-in" rights with respect to certain of our patents; our ability to successfully market and sell our products internationally; our ability to implement our strategy; our ability to reduce our levelized cost of energy and deliver on our cost reduction strategy generally; our ability to protect our intellectual property; litigation and other proceedings; the risk that commercialization of our products will not occur when anticipated or, if it does, that we will not have adequate capacity to satisfy demand; our need for and the availability of additional financing; our ability to generate positive cash flow from operations; our ability to service our long-term debt; our ability to increase the output and longevity of our platforms and to meet the performance requirements of our contracts; our ability to expand our customer base and maintain relationships with our largest customers and strategic business allies; changes by the U.S. Small Business Administration or other governmental authorities to, or with respect to the implementation or interpretation of, the Coronavirus Aid, Relief, and Economic Security Act, the Paycheck Protection Program or related administrative matters; and concerns with, threats of, or the consequences of, pandemics, contagious diseases or health epidemics, including the novel coronavirus, and resulting supply chain disruptions, shifts in clean energy demand, impacts to our customers' capital budgets and investment plans, impacts to our project schedules, impacts to our ability to service existing projects, and impacts on the demand for our products, as well as other risks set forth in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2021. The forward-looking statements contained herein speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement contained or incorporated by reference herein to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based. About FuelCell Energy FuelCell Energy, Inc. (NASDAQ:FCEL) is a global leader in sustainable clean energy ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaJun 9th, 2022

5 Stocks Bucking the Market Trend

Stock prices that beat the market are definitely worth a closer look. As everyone was expecting, the Fed lowered interest rates by 50 bps yesterday, setting off a chain reaction that will ultimately increase all kinds of borrowing costs, including for credit cards, mortgages, business loans -- you name it.The numbers indicate and the Fed believes you do have more to spare for your favorite food, clothing, etc., not to mention the ability to cover the rising cost of plane tickets, as you finally take that summer trip you were putting off for a couple of years.I’ve picked a list of 5 stocks that have been bucking the trend over the past month, when we just couldn’t stop talking about what the Fed intended to do. It doesn’t look like these stocks are going to change course now that it’s a done deal. So let’s see what they are about and why they make good investments today:Griffon Corporation GFFNew York-based Griffon Corp. offers various products in the U.S., Europe, Canada and Australia. Its Consumer and Professional Products (CPP) segment is a leading North American manufacturer and global provider of branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles.Its Home and Building Products (HBP) segment is the largest manufacturer and marketer of garage doors and rolling steel doors in North America. They are sold through professional dealers and leading home center retail chains throughout North America for commercial, industrial, institutional and retail uses. The Diversified Operations industry to which Griffon belongs is in the top 18% of Zacks-classified industries.Griffon frequently acquires and divests businesses to restructure and refocus operations, which is why comparison with earlier periods is not always easy. In the last quarter for instance the company did see some benefit from pricing, volumes and mix, but the 23% increase from last year was also boosted by its Hunter Fan acquisition. This strategy also helps the company deal with market uncertainties. In the last quarter, for instance, the commercial business was stronger for the company with residential impacted by labor and supply chain constraints. Also, while the strong revenue was partially offset by increased material, labor and transportation costs, net-net, Griffon still generated 185% earnings growth. Overall, its revenues surprised by 15% and earnings by 211%.Griffon’s estimates for the current quarter increased 30 cents (49%) in the last 7 days. The 2022 estimate increased 82 cents (40%) and the 2023 estimate increased 55 cents (21%).Its valuation of 10.18X P/E, while improving in the last few days, still remains well below its median level over the past year, besides trailing significantly both the S&P 500 and the related industry. So the shares are still cheap.The shares carry a Zacks Rank #1 (Strong Buy).Forward Air Corporation FWRDGreeneville, Tennessee-based Forward Air is an asset-light freight and logistics company operating in the U.S. and Canada. Its primary business is expedited regional, inter-regional and national less-than-truckload services. It also provides local and last-mile delivery, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling services, as well as expedited truckload brokerage, dedicated fleet, and high security and temperature-controlled logistics services. Additionally, it provides intermodal container drayage services; and contract, and container freight station warehouse and handling services.Forward Air serves freight forwarders, third-party logistics companies, integrated air cargo carriers and passenger, passenger and cargo airlines, steamship lines and retailers.Given the nature of its business, it’s clear why Forward Air is doing so well. Most of the supply chain issues that companies are facing today are related to transportation bottlenecks, which are driving up prices. Container management issues have created one of the biggest challenges of the supply chain today. The fact that it is a last-mile operator shows that it is also benefiting from the surging online shopping trend. This also explains why the Transportation – Truck industry, to which Forward Air belongs, is in the top 30% of Zacks-classified industries.In the last quarter, Forward Air’s revenue and earnings came in around 3% ahead of estimates. But the beats don’t tell the story about just how positive analysts are on this stock. Revenues represented a 29% increase from the prior year while earnings represented a 161% increase. The strong results were attributed to better quality freight in the less-than-truckload business, a strong economy and efficient execution. Forward Air management is convinced that the momentum will continue as cruise ships, conferences and trade shows return. And so, it raised guidance.Forward Air’s estimates have been rising over the past month. The current quarter estimate is up 27 cents (15%) in the last 30 days. The current year estimate is up 71 cents (13%) and the 2023 estimate is up 36 cents (over 5%).The current P/E of 16.50X is well below the median value of 20.37X over the past year and compares favorably with the S&P 500 and the related industry. So the shares are a bargain at these levels.The shares carry a Zacks Rank #2 (Buy).Hub Group, Inc. HUBGOak Brook, IL-based Hub Group is a supply chain solutions provider, offering a whole gamut of transportation and logistics management and brokerage services in North America. With its 1,000 tractors and 4,600 trailers (including driver staffing, management, and infrastructure) and approximately 43,750 dry, 53-foot containers, 450 refrigerated, 53-foot containers; and another approximately 250 dry, 53-foot containers on lease, Hub Group offers truckload, less-than-truckload, intermodal, final mile, small parcel and a host of other services. It primarily serves the retail, consumer products and durable goods industries.The Transportation – Services industry (top 36%) to which Hub Group belongs is also a part of the supply chain, so many of the trends discussed above for Forward Air also apply in this case.Additionally, the company announced very strong results for the last quarter, with earnings beating by 77% on revenue that beat by over 9%. Earnings jumped 406% from the prior year while revenues increased 41%.Analysts got excited with the strong showing, sending current-quarter estimates up 63 cents (41%) in the last 7 days. In the last 30 days, estimates have increased a total 68 cents (45%). 2022 and 2023 estimates have also soared a respective $1.66 (27%) and 71 cents (13%).Its current P/E of 9.02X is also below its medial level of 16.99X over the past year and the S&P 500, which makes them cheap by both measures.The shares carry a Zacks Rank #2.M/I Homes, Inc. MHOColumbus, OH-based M/I Homes designs, constructs and sells single-family homes and attached townhomes under the M/I Homes brand name in Ohio, Indiana, Illinois, Minnesota, Michigan, Florida, Texas, North Carolina and Tennessee. It targets first-time, millennial, move-up, empty-nester and luxury buyers. The company also purchases undeveloped land to divide into lots for the construction of single-family homes, as well as for sale to others. In addition, it originates and sells mortgages; and provides title insurance policies, examination and closing services to purchasers of its homes.There is a historical shortage of single-family homes in particular, which makes this a hot segment. And the strong underlying demand coupled with low inventories in the housing market in general is also leading to constantly increasing prices. So while mortgage rates continue to rise in response to the Fed and the high prices push out some buyers, the prices are allowing absorption of the rising input and labor costs. Companies are still seeing favorable operating metrics. One constraint that builders continue to see is the availability of lots. But this shouldn’t be as big a factor for a company like M/I Homes because it is in the business of developing lots as well. Overall, the Building Products - Home Builders industry to which it belongs is in the top 29% of Zacks-classified industries, so operating conditions remain favorable.In the last quarter, M/I Homes beat earnings estimates by 6% while missing revenue estimates by about 3%. Reported revenue was up around 4% and earnings up 11%. In the last 7 days, the current-quarter estimate has increased 23 cents (a little over 6%). The estimates for 2022 and 2023 are up a respective 86 cents (about 6%) and 69 cents (4%).M/I Homes shares are trading at just 3.16X P/E, which is ridiculous compared to the S&P 500 but also below the industry’s 4.65X. Moreover, it is below the median level of 4.08X over the past year, indicating the existence of upside potential.  The shares carry a Zacks Rank #2.MaxLinear, Inc. MXLCarlsbad, California-based MaxLinear provides radiofrequency (RF), high-performance analog, and mixed-signal communications systems-on-chip (SoCs) solutions for the connected home, wired and wireless infrastructure, and industrial and multi-market applications worldwide. Its products integrate various portions of a high-speed communication system. The product range includes broadband radio transceiver front ends, data converters, embedded systems and software architecture, and architecture and system design for highly integrated end-to-end communication platform solutions. The products are sold to electronics distributors, module makers, original equipment manufacturers (OEMs), and original design manufacturers (ODMs) through a direct sales force, third-party sales representatives, and a distributor network.In the last quarter, MaxLinear reported an earnings surprise of 33% that came on top of a 2% sale surprise. MaxLinear is seeing strong growth across its served markets on the strength of its comprehensive product portfolio and the accelerating pace of new product launches, particularly in connectivity, fiber-to-the home broadband, optical, and wireless infrastructure markets. It continues to take share in Wi-Fi and management expects this business to more than double this year and also grow very strongly in the next.  Encouraged by the strong showing, analysts have raised their estimates. The Zacks Consensus Estimate for the current quarter has therefore improved 10 cents (11%) in the last 7 days. The current year estimate increased 36 cents (10%) while the estimate for 2023 increased 43 cents (11%).But prices have clearly not caught up as the shares are still trading at 14.13X, which is below the median level of 26.4X and trails both the industry and the S&P 500. Definitely the time to go for the shares!MaxLinear belongs to the Zacks-classified Semiconductor - Analog and Mixed industry, which is a top 21% industry. Along with the Zacks #2 rank, this is a solid indication of upside potential.The shares carry a Zacks Rank #2.3-Month Price PerformanceImage Source: Zacks Investment Research Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 Forward Air Corporation (FWRD): Free Stock Analysis Report MaxLinear, Inc (MXL): Free Stock Analysis Report MI Homes, Inc. (MHO): Free Stock Analysis Report Hub Group, Inc. (HUBG): Free Stock Analysis Report Griffon Corporation (GFF): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksMay 5th, 2022

Ocean Power Technologies, Inc. Announces Third Quarter Fiscal 2022 Results

MONROE TOWNSHIP, N.J., March 14, 2022 (GLOBE NEWSWIRE) -- Ocean Power Technologies, Inc. ("OPT" or "the Company") (NYSE:OPTT), a leader in innovative and cost-effective low-carbon marine data, power, and consulting service solutions, today announced financial results for its third quarter ended January 31, 2022. BUSINESS HIGHLIGHTS As previously announced, the Company completed its acquisition of Marine Advanced Robotics (MAR) on November 15, 2021, expanding OPT's commercial offering into autonomous vehicles for maritime data services. MAR is expected to contribute approximately $2.0 million to revenue for Fiscal Year 2023. In the 3Q22, the Company recognized $257,000 of revenue related to MAR. Revenues grew 53% to $484,000 in the third quarter of Fiscal Year 2022 compared to $317,000 for the third quarter of Fiscal Year 2021, driven by MAR and the growth of Strategic Consulting Services. OPT continued development of its proprietary next-generation Maritime Domain Awareness ("MDA") software, configured to provide cyber-secure autonomous monitoring of large ocean areas, such as windfarms, marine protected areas, and areas of interest to national security, suitable for installation on buoys and vehicles. The Company continued its offshore testing off the coast of New Jersey for OPT's continued development of this leading-edge MDA solution. Subsequent to quarter-end, Matthew Burdyny, a seasoned marine technology sales and strategy executive, joined OPT as Vice President, Global Sales & Marketing. Management Commentary – Philipp Stratmann, OPT's President and Chief Executive Officer"Our third quarter was headlined by our largest acquisition to date – Marine Advanced Robotics (MAR), a manufacturer of autonomous surface vehicles, that brings new customers, revenue, and an excellent team to OPT, all of which further support our mission to become the recognized leader for Marine Domain Awareness. The addition of roaming platforms enables us to deploy our ocean data as a service solution to a more expansive customer base and allows us to expand further into the subsea data market, such as for infrastructure surveys. "Through the continued development of our Data-as-a-Service and Power-as-a-Service business models, in combination with our Consulting Services offerings, we are attracting a broader customer group and expanding our revenue opportunities. I am excited that Matt is joining OPT. His experience in selling marine technology services and solutions will further drive our growth. We are optimistic about the direction we are heading and the momentum we are starting to feel." FINANCIAL HIGHLIGHTS Revenues – increased to $484,000 for the 3Q22, compared to $317,000 for the 3Q21, due to $257,000 as contributed by MAR in addition to $120,000 of growth in Strategic Consulting Services. This increase was partially offset by $210,000 of project-based work, recognized in the 3Q21 and not repeated due to contract completion. Engineering and product development costs – were down sequentially $617,000 from the 2Q22 as a result of lower project costs. Compared to 3Q21, engineering and product development costs increased by $1.5 million, mainly due to OPT's investment in MDA software development. Selling, general, and administrative (SG&A) costs – increased by $925,000 from the 2Q22 due primarily to approximately $700,000 of acquisition costs related to MAR and an increase of approximately $225,000 for share-based compensation. SG&A was up approximately $1.2 million from the 3Q21 due to the aforementioned items plus an increase in recruiting fees and an increase in costs related to the OPT annual general meeting of shareholders. Net loss – based on the above activity, the Company had a net loss of $5.5 million for the 3Q22 compared to a net loss of $3.1 million for the 3Q21. Balance Sheet and Cash Flow Total unrestricted cash and cash equivalents were $63.9 million as of January 31, 2022. The Company has no bank debt. Net cash used in operating activities for the first nine months of Fiscal Year 2022 was $15.8 million, compared to $8.5 million for the first nine months of Fiscal Year 2021, primarily due to increase program expenses, acquisition expenses, and headcount. Employment Inducement GrantThe Company granted an inducement award to Matthew Burdyny, the Company's new Vice President, Global Sales & Marketing. This award was granted under the Ocean Power Technologies, Inc. Employment Inducement Incentive Award Plan (the "Plan"), which was amended on February 11, 2022, to increase the shares of Company common stock available for issuance pursuant to equity awards granted under the Plan to 275,000. The Compensation Committee of the Company's Board of Directors granted the inducement award pursuant to Section 711 of the NYSE American Company Guide, consisting of 50,000 restricted shares of the Company's common stock vesting equally over three years. The award is subject to the same terms and conditions as the equity awards to other officers under the Company's 2015 Omnibus Incentive Plan. This award was made as an inducement, material to obtain the employee's acceptance of employment with the Company. Matthew Burdyny BioMatthew Burdyny joined OPT on March 1, 2022, as Vice President, Global Sales & Marketing. Prior to joining the Company, Mr. Burdyny was most recently Vice President, Strategy & Business Development at Teledyne Marine, a leading supplier of marine technology and a business unit of Teledyne Technologies Inc., and brings more than 13 years of experience in sales, business development, marketing, acquisitions, and product development to OPT. He received a Bachelor of Mechanical Engineering degree from the University of Victoria and a Master's degree in Management from Harvard University. Conference Call & Webcast As announced on February 2, 2022, OPT will host a conference call and webcast to review its financial and operating results on Tuesday, March 15, 2022, at 9:00 A.M. Eastern Time. Investors, analysts, and other interested parties may access the conference call by: 877-407-8291 (toll-free in the U.S.) 201-689-8345 for international callers Webcast link via the Company's website at www.OceanPowerTechnologies.com/investor-relations A digital replay will be available by telephone approximately two hours after the call's completion and until June 14, 2022. Access by dialing 877-660-6853 from the U.S. or 201-612-7415 for international callers and using the Conference ID# 13726660. The archived webcast will also be available on the OPT website investor relations page. About Ocean Power TechnologiesOPT provides intelligent maritime solutions and services that enable safer, cleaner, and more productive ocean operations for the defense and security, oil and gas, science and research, and offshore wind markets. Our PowerBuoy® platforms provide clean and reliable electric power and real-time data communications for remote maritime and subsea applications. We also provide WAM-V® autonomous surface vessels (ASVs) and marine robotics services through our wholly owned subsidiary Marine Advanced Robotics. We are headquartered in Monroe Township, New Jersey, and have offices in Houston, Texas, and Richmond, California. To learn more, visit www.OceanPowerTechnologies.com. Forward-Looking StatementsThis release may contain forward-looking statements that are within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by certain words or phrases such as "may", "will", "aim", "will likely result", "believe", "expect", "will continue", "anticipate", "estimate", "intend", "plan", "contemplate", "seek to", "future", "objective", "goal", "project", "should", "will pursue" and similar expressions or variations of such expressions. These forward-looking statements reflect the Company's current expectations about its future plans and performance. These forward-looking statements rely on a number of assumptions and estimates that could be inaccurate and subject to risks and uncertainties. Actual results could vary materially from those anticipated or expressed in any forward-looking statement made by the Company. Please refer to the Company's most recent Forms 10-Q and 10-K and subsequent filings with the U.S. Securities and Exchange Commission for further discussion of these risks and uncertainties. The Company disclaims any obligation or intent to update the forward-looking statements in order to reflect events or circumstances after the date of this release. Financial Tables FollowAdditional information may be found in the Company's Annual Report on Form 10-K that has been filed with the U.S. Securities and Exchange Commission. The Form 10-K is accessible at www.sec.gov or the Investor Relations section of the Company's website (www.OceanPowerTechnologies.com/investor-relations). Ocean Power Technologies, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except share data)                       January 31, 2022   April 30, 2021         (Unaudited)     ASSETS         Current assets:           Cash and cash equivalents   $ 63,454     $ 83,028     Restricted cash, short-term     384       384     Accounts receivable     113       350     Contract assets     407       190     Inventory     193       -     Other current assets     436       487       Total current assets     64,987       84,439   Property and equipment, net     365       406   Intangibles, net     4,203       274   Right-of-use asset, net     825       1,036   Restricted cash, long-term     222       222   Goodwill     7,754       -       Total assets   $ 78,356     $ 86,377   LIABILITIES AND STOCKHOLDERS' EQUITY         Current liabilities:           Accounts payable   $ 522     $ 687     Accrued expenses     1,292       1,881     Contract liabilities, current portion     15       -     Right-of-use liability, current portion     323       347     Litigation payable     -       1,224     Advance payable - MAR     456       -     Contingent Liability     1,591       60     Paycheck protection program loan- current     -       495       Total current liabilities     4,199       4,694   Paycheck protection program loan, less current portion     -       396   Right-of-use liability, less current portion     615       819       Total liabilities     4,814       5,909   Commitments and contingencies (Note 15)         Stockholders' Equity:           Common stock, $0.001 par value; authorized 100,000,000 shares,       issued and outstanding 55,894,213 and 52,478,011 shares   56       52     Treasury stock, at cost; 21,040 shares     (338 )    .....»»

Category: earningsSource: benzingaMar 14th, 2022

AECOM (ACM) Set to Serve as GEC for the City of Richardson

AECOM (ACM) to augment city staff and provide program management services for necessary renovations, prioritizing critical needs and maximum impact. AECOM ACM has won a General Engineering Consultant (GEC) contract from the City of Richardson, TX to support the city’s Capital Improvement Program, including the recently approved 2021 Bond Program.In order to identify opportunities that will enhance efficiency, minimize public disruption, and reduce costs, AECOM will provide program coordination, management, and delivery services to citywide projects associated with this program. The City of Richardson’s Capital Improvement Program includes nearly $400 million worth of projects and is likely to be delivered over the next five to seven years. These projects are focused on repairs and improvement of streets, public buildings, sidewalks, drainage, and parks.Travis Boone, chief executive of AECOM’s U.S. West region, said, This comprehensive bond program will provide necessary renovations to public buildings, parks, and infrastructure across the city, prioritizing critical needs and maximum impact. Our team has a proven track record in the region, and we’re excited to bring our technical excellence and local knowledge to help deliver the successful completion of this program."Solid Project Execution Aids AECOMAECOM is a leading solutions provider for supporting professional, technical, and management solutions for diverse industries across end markets like transportation, facilities, government as well as environmental, energy, and water businesses. The major part of the U.S. government’s broad infrastructural plan is focused on transit and water markets, wherein AECOM enjoys a dominant position.Currently, this leading professional, technical and management solution provider has been witnessing a robust pipeline of pursuits across the business. It has been benefiting from solid infrastructure spending in the United Kingdom, Canada, Hong Kong and Australia.Image Source: Zacks Investment ResearchThe stock has rallied 52.6% over a year compared with the industry’s 28.1% growth. Earnings estimates for fiscal 2022 have moved up 3.1% in the past 60 days, depicting analysts' optimism over bottom-line growth potential. The Zacks Consensus Estimate for the Zacks Rank #3 (Hold) company’s fiscal 2022 earnings indicates a 17% increase from the year-ago level. AECOM currently has good visibility into growth and a strong backlog for the upcoming quarters.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Some Better-Ranked Stocks in the Construction SectorBoise, ID-based Boise Cascade Company BCC — which makes wood products and distributes building materials in the United States as well as Canada — is aided by factors like favorable commodity wood products, pricing, and robust construction activity.Boise Cascade, a Zacks Rank #1 stock, is expected to witness 159.1% growth in 2021 earnings. Shares of the company have jumped 45.8% in the past year.Louisiana-Pacific Corporation LPX is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products, and exterior siding for use in residential, industrial, and light commercial construction. It operates through four segments: Siding, Oriented Strand Board, Engineered Wood Products and South America.Louisiana-Pacific’s shares have appreciated 94.3% in the past year. LPX has an expected earnings growth rate of more than 213.2% for the current year.Weyerhaeuser Company WY is one of the leading U.S. forest product companies. The company has been benefiting from solid new residential construction activity, which in turn is leading to improved demand. Also, its focus on operational excellence has been advantageous over time.Weyerhaeuser’s earnings estimates for the current fiscal year have increased 0.9% over the past seven days. Shares of the company have jumped 18.2% in the past year. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Weyerhaeuser Company (WY): Free Stock Analysis Report AECOM (ACM): Free Stock Analysis Report LouisianaPacific Corporation (LPX): Free Stock Analysis Report Boise Cascade, L.L.C. (BCC): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksDec 23rd, 2021

Lockheed"s (LMT) Arm Wins Deal to Support CH-53K Aircraft

Lockheed (LMT) is going to procure long-lead items involving full-rate production of CH-53K aircraft Lockheed Martin Corp.’s LMT business unit, Sikorsky, recently won a contract for procuring long-lead items involving full-rate production of CH-53K aircraft. The Naval Air Systems Command, Patuxent River, MD, offered the contract.Valued at $35.3 million, the contract is expected to get completed by December 2022. Work related to this deal will be executed in Stratford, CT.Growing Importance of CH-53K HelicopterThe CH-53K helicopter takes forward Sikorsky’s 50 years of manufacturing and operational success with its CH-53A, CH-53D/G and CH-53E predecessors. The new heavy lifter allows the U.S. Marine Corps and international militaries to move troops and equipment from ship to shore and to higher altitude terrains more quickly and effectively. It is also effective in handling missions like humanitarian aid, troop transport, casualty evacuation, support of special operation forces, and combat search and rescue.In February 2021, Israel made a decision to purchase Lockheed’s CH-53K helicopter over Boeing's BA CH-47, in an effort to further build on the Israel Defense Force’s capabilities. Such a strategic move by Israel could be pivotal for Lockheed’s growth in the trouble-ridden Middle East area over top competitors.Growth ProspectsSubstantial fleet modernization plans of militaries deploying new and advanced attack helicopters are anticipated to support the combat helicopter market growth. Notably, per a Mordor Intelligence report, the global attack helicopter market is expected to witness a CAGR of more than 4% during the 2020-2025 time period.Such growth can be attributed to the rise in global threats, geopolitical instabilities and increased spending on defense. These projections are expected to boost the growth of major combat helicopter producers like Lockheed.Will Other Helicopter Makers Benefit?No doubt, the aforementioned growth projections for the combat helicopter market also bode well for other helicopter makers such as Airbus SE EADSY, Boeing and Textron TXT.Boeing’s MH-47G belongs to the family of CH-47 Chinook multi-role heavy-lift helicopters. The helicopter enjoys massive global demand owing to the advanced and combat-proven features that enable it to work in all kinds of combat and tactical missions.During the third quarter, Boeing delivered four CH-47F Block II Chinook helicopters for the U.S Army. The company boasts a long-term earnings growth rate of 4%.Airbus is among the world's largest suppliers of advanced military helicopters. Airbus helicopters are in service across more than 150 countries worldwide. Airbus’ product line offers the full spectrum of rotary-wing aircraft solutions for civil, government, military, law enforcement and Para public uses. Some of the significant helicopters manufactured by EADSY are H125M, H135M and H145M.The Zacks Consensus Estimate for Airbus’ 2021 earnings has increased 8% in the past 60 days. Shares of Airbus have appreciated 3.4% in the past year.Textron’s Bell unit is a renowned manufacturer of military helicopters like AH-1Z, UH-1Y, V-22 among others. The segment delivered 33 commercial helicopters in the third quarter.The Zacks Consensus Estimate for Textron’s 2021 earnings has been revised upward by 1.5% to $3.33 in the last 60 days. TXT has gained 56.2% in the past year.Price Movement and Zacks RankShares of Lockheed Martin have lost 6.2% in the past year compared with the industry's decline of 34.5%.Image Source: Zacks Investment Research The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Boeing Company (BA): Free Stock Analysis Report Lockheed Martin Corporation (LMT): Free Stock Analysis Report Textron Inc. (TXT): Free Stock Analysis Report Airbus Group (EADSY): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksDec 9th, 2021

Electric Vehicles: The Future of Automotive And Competitive Innovation

It was not too long ago that electric vehicles were disregarded by the bulk of consumers as a serious replacement for their petrol-based cars. Concerns about their range and a lack of stations where one could charge their car (especially when compared to petrol alternatives) once dominated the conversation. However, ownership of such vehicles is […] It was not too long ago that electric vehicles were disregarded by the bulk of consumers as a serious replacement for their petrol-based cars. Concerns about their range and a lack of stations where one could charge their car (especially when compared to petrol alternatives) once dominated the conversation. However, ownership of such vehicles is on the rise, and electric vehicles are set to transform the automotive industry. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Mobility is changing. Major issues associated with traditional vehicles and approaches in the automobile industry, such as emissions, congestion and a growing carbon footprint, are reaching a tipping point that demands a revision of the status quo. In response, several companies are busy producing dazzling innovations in electric vehicles that will ensure they represent the future of the mobility industry. Top electric vehicle stocks to watch right now: Lucid Group Inc (NASDAQ:LCID) Fisker Inc (NYSE:FSR) Nio Inc (NYSE:NIO) Why The Future Is Electric Electric vehicles have secured themselves as the future of the automobile industry because their ability to transform the way we move is inherently based on shifts in three primary areas: government regulation, consumer sentiment and technological innovation. This tri-fold foundation makes certain that this revolution in mobility is definitive. This editorial maintains that electric vehicles represent the future of the automobile industry and will continue to analyse this assertion with the backdrop of these three foundational ideas that are supporting it. Government Regulation The past, present and future efforts of governments to achieve sustainable mobility with their policies is accelerating the adoption of electric vehicles and helping a foundation for them. With the growing inauguration of more stringent emission targets by regulators around the globe, the increased growth of electric vehicles in order to reach these targets is being encouraged. Specific Policies Furthermore, the European Parliament produced its “Fit for 55” initiative in 2021, which hopes to amalgamate energy, climate, transport, land use and taxation efforts and reduce greenhouse gas emissions by 55% holistically by 2030. In addition to this, the Green Car Initiative (GCI) was proposed by the Directorate-General for Mobility and Transport; it contains a budget up to 50 million Euros to support any projects relating to electric vehicles. In the US, President Biden has built on the endeavours of Obama’s administration by holding themselves to a 50% electric vehicle target for 2030. Other government incentives are also present in the form of purchasable rebates and tax credits; in the past $2.4 billion dollars has been allocated in grants to support the production of EVs. This budget has primarily been split between support for the manufacture of EV batteries, other components, and the infrastructure required for EVs. General electric vehicle subsidies are also offered by most governments around the world. Their Effect The measures from both of these governments appear to have been vastly successful so far, which bodes well for the future of electric vehicles. Electric vehicles have been gradually perforating into the European market for a while now, with their numbers uninterruptedly growing since 2010 from 700 to 550,000 units. At this point in time, these vehicles now represent as much as 2% of total new car purchases - and 3.5% of newly purchased vehicles for passengers. This success can be seen in the US as well, with brands such as Tesla experiencing exponential growth in their sales. Over the past five years, the brand has watched as their sales grew by 10x; the quintessence of this growth was seen in 2016, when over 80,000 vehicles were sold in this year alone. Over 1 million vehicles are expected to have been produced by the end of this year. Consumer Sentiment Consumer sentiment is the second leg supporting the future of electric vehicles. Opinions towards EVs have changed drastically over the course of the past decade. This is due to a plummeting in their cost, spurred on in part by a decrease in the price of lithium-ion battery packs (a type of rechargeable battery used in the production of EVs), as well as the increased favourability of government incentives towards them in recent years. Furthermore, a large reason for the huge growth in uptake that electric vehicles have witnessed over the last demi-decade has been the gradual breaking down of the greatest obstacle to their success: their huge upfront cost. Outsourcing manufacturing to China has qualified brands to sell EVs for up to 30% less, and drops in price of lithium-ion battery packs have lowered this even further. In the US, it was documented in 2020 that up to 2 million electric vehicles are registered, a 300% increase when compared to four years prior. Within this, ‘all-electric’ cars appear to be the subcategory that is growing the most rapidly. This small portion of the market alone grew by nearly 800,000 vehicles in the same period of time. 2021 produced a record number of electric vehicle sales in Australia. As a matter of fact, a smaller amount of vehicles was sold throughout the entirety of 2020 than was in the first half of 2021 alone. The market share of such vehicles doubled during this 1 year period from 0.7% to 1.5%. Despite this, the scale of the electric vehicle industry appears smallest in Australia out of all the economies observed: there are currently only 23 electric vehicle models available for sale here, compared to over 130 options in the UK. Out of the three, Europe has demonstrated the most significant increase in sales. The annual growth in sales since 2016 has been compoundly increasing at a rate equivalent to 60% per year. Several individual markets within this region have witnessed a huge proportion of their automobile sales being electric vehicles - for example in Norway this percentage was 75%, and in Iceland it was 50%. Competitive Innovations The efforts of players within the industry to conceptualise and implement new ideas and visions for the future of electric mobility, such as passenger-centric, autonomous or connected development, further accelerate the rate at which automotive technology is innovated. This aids in bolstering the future of electric cars as innovation is key to survival in business, stagnation often means being surpassed and becoming redundant. The competitive innovations of this industry will be analysed in the context of two specific companies with their own unique vision for the future of electric cars: Tesla and Laureti Group. These two prodigious companies are acting to disrupt the automotive ecosystem in different ways based on their different approaches. Tesla Tesla Inc (NASDAQ: TSLA)'s historic rise in the car industry marked the start of a novel direction for the global auto industry: one characterised by electricity. The company’s owner, Elon Musk, has been taking a unique approach to the construction of his vehicles that challenged the status quo of the industry since 2009, causing many to seriously doubt its Through its Silicon Valley approach to software as a means of innovating the industry with electric cars, Tesla has since led developments in manufacturing, software and the architecture of its electronics that have facilitated its ability to consistently produce innovations faster than their competitors. Specifically, Tesla innovated the energy production and consumption systems of its cars. On top of this, the way in which it approached its business model completely contradicted the established format of the time: instead of trying to develop an affordable car to mass produce, it did the exact opposite and constructed a desirable car that created demand for electric vehicles. These innovations have been appropriately profitable for Tesla. In 2017, the company surpassed previous industry giant General Motors to assert itself as the largest market capitalization of all car manufacturers in the United States. Toyota was the next giant to be transcended by Tesla, when it became the most valuable car maker on the planet in 2020. Today, VW, through VW I.D.4 and newly announced I.D.5 as well as Mercedes, through the EQA, EQB and EQC ranges, are giving Tesla a square on challenge - and although this may cause a downside risk to the Tesla stock unless it keeps innovating, overall, more players switching to electric is encouraging for the environment and our future. Laureti Group Another innovator of the electric vehicle industry is Laureti Group. This growing startup approached the development of electric cars from a slightly alternative angle to Tesla. Whereas Tesla focused on tackling emissions, Laureti is prioritising the reduction of carbon footprints holistically. Furthermore, Tesla is on track to make transportation emission-free by producing a product that seeks to replace each individual consumer’s standard, polluting petrol car with an electric one. Contrastingly, Laureti is producing vehicles that provide a ‘business lounge on the move’ as part of a corporate business fleet, reducing personal ownership of cars, and thus carbon footprint overall. Put simply, Tesla is producing luxury electric cars that private individuals can own, whereas Laureti is producing premium electric vehicles that are designed to be accessed through companies as their price is far too steep and generally unjustifiable for the majority. Laureti’s primary innovation is the integration of its seamless Mira.OS service - the world’s mobility operating system. It is using Mira.OS to provide what it calls a ‘passenger-centric’ experience. Whilst all cars of the present are focussed on the driver, it is more important to focus on the passenger now as the reality of autonomous cars is as close as 2030. When this breakthrough in technology arrives, the ‘smart cabin’ experience Laureti is hoping to provide will be infinitely more useful to people than a higher top speed or quicker 0-60mph. Users will want to be able to work on the go and utilise the once ‘dead time’ of commuting in order to maximise productivity. Waymo Embracing the trend of EV’s and rise in AI, Waymo has set out to provide a safer alternative to human-driven transport. Whereas this is counter-intuitive for humans who feel that an element of control is desirable for their own safety, it is fast gathering data based on a self-drive shipping fleet that is well underway to prove that the aim of a safer alternative is being achieved. Instead of calling itself a self-driving car firm, Waymo refers to itself as a self-driving technology company. Thousands of self-driving cars are equipped with lidar sensors, which enable driverless operations and 360-degree perception technology to detect obstructions. Waymo's objective is to make getting around safe and simple for people and objects. They're taking autonomous driving to new places, from moving people to moving products. Their goal is ambitious, and their work has the ability to change people's lives. Waymo claims to have developed the most advanced sensors and perception systems, as well as having access to high-quality data. More than 20 million autonomously driven miles and five generations of development are included in the system dataset. Its fifth-generation Driver uses a combination of sensors, including radar, lidar, and cameras, to see 360 degrees around the vehicle. Waymo is currently the only company in the United States operating a fully autonomous public ride-hailing service. Romeo Power This company can be seen as a technology partner for other motor companies, as it powers anything from small cars all the way up the spectrum including big trucks and manufacturing robotics. It’s aim to deliver superior capacity power is aimed at alleviating some of the biggest consumer objectives to adaptation: vehicle ranges are considered too short for intercity travel and Romero can be one of the key innovators to address this. Romeo Power Inc (NYSE:RMO) is a lithium-ion battery module and pack manufacturer for commercial electric cars. Romeo Power supports large-scale sustainable mobility by supplying safer, longer-lasting batteries with longer range and shorter charge times with its energy dense battery modules and packs. The organization can create lightweight and efficient solutions that deliver superior performance and provide improved acceleration, range, safety, and durability thanks to higher energy density. Its modules and packs are modular and adaptable, and its patented battery management system optimizes them. They are supplying innovative electrification solutions to some of the most complex commercial vehicle applications as a pioneer in battery-powered energy. Their advanced hardware, paired with their cutting-edge battery management systems, ensures that their customers get the safety, performance, dependability, and configurability they need to succeed. They are committed to bringing about meaningful change in energy sourcing and electrification, ensuring that everyone has access to sustainable energy. Closing Remarks On balance, it is indisputable that the future of the automobile is electric. The roots that have developed for it are established and deep. There is no reason for the success of the trifold support provided by government regulations, favourable consumer sentiment and competitive innovations not to continue into the future. Updated on Nov 9, 2021, 3:55 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 9th, 2021

Hubbell Reports Third Quarter 2021 Results

Shelton, CT, Oct. 26, 2021 (GLOBE NEWSWIRE) -- HUBBELL REPORTS THIRD QUARTER 2021 EARNINGS PER DILUTED SHARE OF $1.98 AND ADJUSTED EARNINGS PER DILUTED SHARE OF $2.24 Q3 net sales +9% (organic +5%) Q3 diluted EPS of $1.98; adjusted diluted EPS of $2.24 Update FY21 reported diluted EPS to $6.85-$7.05 Update FY21 adjusted diluted EPS to $8.30-$8.50 SHELTON, CT. (October 26, 2021) – Hubbell Incorporated (NYSE:HUBB) today reported operating results for the third quarter ended September 30, 2021. "Hubbell successfully navigated through a dynamic operating environment in the third quarter," said Gerben Bakker, Chairman, President and Chief Executive Officer. "While material inflation, supply chain disruptions, and increased freight and logistics costs caused operational headwinds in the quarter, the Company actively mitigated through price increases and other productivity initiatives. Price realization of +7% in the third quarter represented a significant acceleration from first half levels, and prior restructuring and organizational efficiency initiatives continue to deliver ongoing cost savings." Mr. Bakker continued, "Customer demand for reliable and efficient critical infrastructure solutions remained strong across our Utility and Electrical businesses, driving another quarter of significant orders growth. While unit volumes were down slightly year-over-year in the quarter due to supply chain constraints, above average backlog visibility gives us confidence in a strong finish to the full year." "In Utility Solutions, demand strength was broad-based across power, gas and water utility customers for T&D components, as well as communications & controls. Although supply chain disruptions limited third quarter shipments, secular trends including grid modernization, hardening of aging infrastructure, and the renewable energy transition are expected to continue driving attractive growth over the long term. In Electrical Solutions, sales and orders growth was led by strong demand for connectors, grounding and wiring products across light industrial verticals, including communications, solar, and industrial manufacturing markets. This strength was partially offset by softness in commercial and residential lighting markets." Mr. Bakker concluded, "We are pleased with the results of the third quarter, as our employees across the enterprise executed with urgency and efficiency to operate with discipline while serving our customers with best-in-class quality and reliability. Looking ahead, we are confident in our ability to deliver for our customers and shareholders as we work to fulfill strong demand while continuing to implement price and productivity initiatives." Certain terms used in this release, including "Net debt", "Free Cash Flow", "Organic net sales", "Organic growth", "Restructuring-related costs", "EBITDA", and certain "adjusted" measures, are defined under the section entitled "Non-GAAP Definitions." See page 8 for more information. THIRD QUARTER FINANCIAL HIGHLIGHTS The comments and year-over-year comparisons in this segment review are based on third quarter results in 2021 and 2020. Electrical Solutions segment net sales in the third quarter of 2021 increased 11% to $612 million compared to $551 million reported in the third quarter of 2020. Organic sales increased 9% in the quarter while acquisitions contributed 1% and foreign exchange contributed 1%. Operating income was $72.0 million, or 11.8% of net sales, compared to $65.9 million, or 12.0% of net sales in the same period of 2020. Adjusted operating income was $76.1 million, or 12.4% of net sales, in the third quarter of 2021 as compared to $70.1 million, or 12.7% of net sales in the same period of the prior year. Changes in adjusted operating profit and operating margin were driven primarily by strong price realization, modest volume growth, and restructuring benefits, offset by material inflation and higher logistics and supply chain costs. Utility Solutions segment net sales in the third quarter of 2021 increased 8% to $602 million compared to $558 million reported in the third quarter of 2020. Organic sales increased 2% in the quarter, with acquisitions, net of dispositions, contributing approximately 6% growth. Total Utility T&D Components sales increased approximately 10% and Utility Communications and Controls sales increased by approximately 4%. Operating income was $83 million, or 13.8% of net sales, in the third quarter of 2021 as compared to $97 million, or 17.4% of net sales in the same period of 2020. Adjusted operating income was $98 million, or 16.3% of net sales, in the third quarter of 2021 as compared to $111 million, or 20.0% of net sales in the same period of the prior year. Decreases in adjusted operating profit and adjusted operating margin were primarily due to lower volumes, material inflation, and higher logistics and supply chain costs, partially offset by strong price realization and restructuring benefits. Adjusted third quarter 2021 results exclude $0.26 of amortization of acquisition-related intangible assets. Adjusted third quarter 2020 results exclude $0.25 of amortization of acquisition-related intangible assets as well as $0.09 due to a pension settlement charge. Net cash provided by operating activities was $98 million in the third quarter of 2021 versus $151.9 million in the comparable period of 2020. Free cash flow was $70 million in the third quarter of 2021 versus $135.2 million reported in the comparable period of 2020 as the Company built working capital to secure materials and components to serve strong customer demand. SUMMARY & OUTLOOK For the full year 2021, Hubbell anticipates sales growth of 12-13%. This expectation is comprised of 8-9% organic growth, including 5% price realization, bolstered by approximately 3-4% growth from acquisitions and a modest tailwind from foreign exchange. Hubbell anticipates 2021 earnings per diluted share in the range of $6.85-$7.05 and anticipates adjusted diluted earnings per share ("Adjusted EPS") in the range of $8.30-$8.50. Adjusted EPS excludes amortization of acquisition-related intangible assets, which the Company expects to be approximately $1.15 for the full year. Adjusted EPS also excludes a loss on the early extinguishment of debt from the 2022 Notes that were redeemed by the Company on April 2, 2021, as well as a loss recognized on the disposal of a business during the second quarter of 2021. The Company believes Adjusted EPS is a useful measure of underlying performance in light of our acquisition strategy and core operations. The earnings per share and adjusted earnings per share ranges are based on an adjusted tax rate of approximately 21% and include approximately $0.20-$0.25 per share of anticipated restructuring and related investment. The ranges also incorporate the impact of acquisitions, which we anticipate adding approximately $0.20 to full year adjusted earnings. The Company expects full year 2021 free cash flow conversion at approximately 100% of adjusted net income. CONFERENCE CALL Hubbell will conduct an earnings conference call to discuss its third quarter 2021 financial results today, October 26, 2021 at 10:00 a.m. ET. A live audio of the conference call will be available and can be accessed by visiting Hubbell's "Investor Relations - Events/Presentations" section of www.hubbell.com. Audio replays of the recorded conference call will be available after the call and can be accessed two hours after the conclusion of the original conference call by calling (855) 859-2056 and using passcode 6696827. The replay will remain available until November 25, 2021 at 11:59 p.m. ET. Audio replays will also be available at the conclusion of the call by visiting www.hubbell.com and selecting "Investors" from the options at the bottom of the page and then "Events/Presentations" from the drop-down menu. FORWARD-LOOKING STATEMENTS Certain statements contained herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements about expectations regarding our financial results, condition and outlook, anticipated end markets, near-term volume, continued opportunity for operational improvement, our ability to drive consistent and differentiated performance, the impact of our high quality portfolio of electrical solutions and utility solutions with strong brand value and best in class reliability, and our projected financial results set forth in "Summary & Outlook" above, as well as other statements that are not strictly historic in nature. In addition, all statements regarding anticipated growth, changes in operating results, market conditions and economic conditions are forward-looking, including those regarding the adverse impact of the COVID-19 pandemic on the Company's end markets, supply chain disruptions and material costs. These statements may be identified by the use of forward-looking words or phrases such as "believe", "expect", "anticipate", "plan", "estimated", "target", "should", "could", "may", "subject to", "continues", "growing", "projected", "if", "potential", "will likely be", and similar words and phrases. Such forward-looking statements are based on our current expectations and involve numerous assumptions, known and unknown risks, uncertainties and other factors which may cause actual and future performance or the Company's achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: The scope and duration of the COVID-19 pandemic and its impact on global economic systems, our employees, sites, operations, customers, material costs and supply chain; the outcome of contingencies or costs compared to amounts provided for such contingencies, including those with respect to pension withdrawal liabilities; achieving sales levels to meet revenue expectations; unexpected costs or charges, certain of which may be outside the Company's control; the effects of tariffs and other trade actions taken by the U.S. and other countries; changes in demand for our products, as well as product sales prices and material costs; expected benefits of productivity improvements and cost reduction actions; effects of unfavorable foreign currency exchange rates; the impact of U.S. tax reform legislation; general economic and business conditions; the impact of and the ability to complete and integrate strategic acquisitions; the impact of certain divestitures; the ability to effectively develop and introduce new products, expand into new markets and deploy capital; and other factors described in our Securities and Exchange Commission filings, including the "Business", "Risk Factors", and "Quantitative and Qualitative Disclosures about Market Risk" Sections in the Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Reports on Form 10-Q. About the Company Hubbell Incorporated is a leading manufacturer of utility and electrical solutions enabling customers to operate critical infrastructure reliably and efficiently. With 2020 revenues of $4.2 billion, Hubbell solutions empower and energize communities in front of and behind the meter. The corporate headquarters is located in Shelton, CT. Contact:                    Dan Innamorato Hubbell Incorporated 40 Waterview Drive P.O. Box 1000 Shelton, CT 06484 (475) 882-4000         ####### NON-GAAP DEFINITIONS References to "adjusted" operating measures exclude the impact of certain costs, gains or losses. Management believes these adjusted operating measures provide useful information regarding our underlying performance from period to period and an understanding of our results of operations without regard to items we do not consider a component of our core operating performance. Adjusted operating measures are non-GAAP measures, and include adjusted operating income, adjusted operating margin, adjusted net income, adjusted net income available to common shareholders, adjusted net income attributable to Hubbell, adjusted earnings per diluted share, and adjusted EBITDA. These non-GAAP measures exclude, where applicable: Amortization of all intangible assets associated with our business acquisitions, including inventory step-up amortization associated with those acquisitions. The intangible assets associated with our business acquisitions arise from the allocation of the purchase price using the acquisition method of accounting in accordance with Accounting Standards Codification 805, "Business Combinations." These assets consist primarily of customer relationships, developed technology, trademarks and tradenames, and patents, as reported in Note 6—Goodwill and Other Intangible Assets, under the heading "Total Definite-Lived Intangibles," within the Company's audited consolidated financial statements set forth in its Annual Report on Form 10-K for Fiscal Year Ended December 31, 2020. The Company excludes these non-cash expenses because we believe it (i) enhances management's and investors' ability to analyze underlying business performance, (ii) facilitates comparisons of our financial results over multiple periods, and (iii) provides more relevant comparisons of our results with the results of other companies as the amortization expense associated with these assets may fluctuate significantly from period to period based on the timing, size, nature, and number of acquisitions. Although we exclude amortization of these acquired intangible assets and inventory step-up from our non-GAAP results, we believe that it is important for investors to understand that revenue generated, in part, from such intangibles is included within revenue in determining adjusted net income attributable to Hubbell Incorporated. Losses recognized in the second quarter of 2021 from the early extinguishment of long-term debt and the disposition of a business. The Company excludes these losses because we believe it enhances management's and investors' ability to analyze underlying business performance and facilitates comparisons of our financial results over multiple periods. Pension charges including a settlement charge in the third quarter of 2020. Income tax effects of the above adjustments which are calculated using the statutory tax rate, taking into consideration the nature of the item and the relevant taxing jurisdiction, unless otherwise noted. Adjusted EBITDA is a non-GAAP measure that excludes the items noted above and also excludes the Other income (expense), net, Interest expense, net, and Provision for income taxes captions of the Condensed Consolidated Statement of Income, as well as depreciation and amortization expense. Net debt (defined as total debt less cash and investments) to total capital is a non-GAAP measure that we believe is a useful measure for evaluating the Company's financial leverage and the ability to meet its funding needs. Free cash flow is a non-GAAP measure that we believe provides useful information regarding the Company's ability to generate cash without reliance on external financing. In addition, management uses free cash flow to evaluate the resources available for investments in the business, strategic acquisitions and further strengthening the balance sheet. In connection with our restructuring and related actions we have incurred restructuring costs as defined by U.S. GAAP, which are primarily severance and employee benefits, asset impairments, accelerated depreciation, as well as facility closure, contract termination and certain pension costs that are directly related to restructuring actions. We also incur restructuring-related costs, which are costs associated with our business transformation initiatives, including the consolidation of back-office functions and streamlining our processes, and certain other costs and gains associated with restructuring actions. We refer to these costs on a combined basis as "restructuring and related costs", which is a non-GAAP measure. Organic net sales, a non-GAAP measure, represent net sales according to U.S. GAAP, less net sales from acquisitions and divestitures during the first twelve months of ownership or divestiture, respectively, less the effect of fluctuations in net sales from foreign currency exchange. The period-over-period effect of fluctuations in net sales from foreign currency exchange is calculated as the difference between local currency net sales of the prior period translated at the current period exchange rate as compared to the same local currency net sales translated at the prior period exchange rate. We believe this measure provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, as these activities can obscure underlying trends. When comparing net sales growth between periods excluding the effects of acquisitions, business dispositions and currency exchange rates, those effects are different when comparing results for different periods. For example, because net sales from acquisitions are considered inorganic from the date we complete an acquisition through the end of the first year following the acquisition, net sales from such acquisition are reflected as organic net sales thereafter. There are limitations to the use of non-GAAP measures. Non-GAAP measures do not present complete financial results. We compensate for this limitation by providing a reconciliation between our non-GAAP financial measures and the respective most directly comparable financial measure calculated and presented in accordance with GAAP. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These financial measures should not be considered in isolation from, as substitutes for, or alternative measures of, reported GAAP financial results, and should be viewed in conjunction with the most comparable GAAP financial measures and the provided reconciliations thereto. We believe, however, that these non-GAAP financial measures, when viewed together with our GAAP results and related reconciliations, provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure. Reconciliations of each of these non-GAAP measures to the most directly comparable GAAP measure can be found in the tables below. RECAST SEGMENT INFORMATION As previously disclosed, beginning in the first quarter of 2021, the Company is reporting the results of its Gas Connectors and Accessories business as part of the Utility Solutions segment. This realignment has no impact on the Company's historical consolidated financial position, results of operations or cash flows. The historical segment information has been recast to conform to the new reporting structure. The recast financial information does not represent a restatement of previously issued financial statements. HUBBELL INCORPORATEDCondensed Consolidated Statement of Income(unaudited)(in millions, except per share amounts)   Three Months Ended September 30,   Nine Months Ended September 30,   2021   2020   2021   2020 Net sales $ 1,213.6        $ 1,108.6        $ 3,483.8        $ 3,148.1      Cost of goods sold 883.3        779.0        2,532.9        2,224.5      Gross profit 330.3        329.6        950.9        923.6      Selling & administrative expenses 175.0        166.7        525.3        510.4      Operating income 155.3        162.9        425.6        413.2      Operating income as a % of Net sales 12.8    %   14.7    %   12.2    %   13.1    % Interest expense, net (13.5 )     (15.0 )     (41.4 )     (45.8 )   Loss on disposition of business (0.1 )     —        (6.9 )     —      Loss on extinguishment of debt —        —        (16.8 )     —      Pension charge —        (6.6 )     —        (6.6 )   Other income (expense), net (1.2 )     (2.3 )     (3.1 )     (8.9 )   Total other expense, net (14.8 )     (23.9 )     (68.2 )     (61.3 )   Income before income taxes 140.5        139.0        357.4        351.9      Provision for income taxes 29.9        30.4        71.1        78.5      Net income 110.6        108.6        286.3        273.4      Less: Net income attributable to noncontrolling interest 2.1        1.5        4.3        3.1      Net income attributable to Hubbell Incorporated $ 108.5        $ 107.1        $ 282.0        $ 270.3      Earnings Per Share:               Basic $ 1.99        $ 1.97        $ 5.18        $ 4.97      Diluted $ 1.98        $ 1.96        $ 5.14        $ 4.95      Cash dividends per common share $ 0.98        $ 0.91        $ 2.94        $ 2.73      HUBBELL INCORPORATEDCondensed Consolidated Balance Sheet(unaudited)(in millions)   September 30, 2021   December 31, 2020 ASSETS       Cash and cash equivalents $ 257.9      $ 259.6    Short-term investments 9.9      9.3    Accounts receivable (net of allowances of $11.6 and $12.5) 798.3      634.7    Inventories, net 700.7      607.3    Other current assets 66.4      76.7    TOTAL CURRENT ASSETS 1,833.2      1,587.6    Property, plant and equipment, net 521.2      519.2    Investments 72.1      71.1    Goodwill 1,922.6      1,923.3    Other intangible assets, net 738.0      810.6    Other long-term assets 154.6      173.3    TOTAL ASSETS $ 5,241.7      $ 5,085.1    LIABILITIES AND EQUITY       Short-term debt $ 128.9      $ 153.1    Accounts payable 491.9      378.0    Accrued salaries, wages and employee benefits 81.9      91.5    Accrued insurance 77.1      71.6    Other accrued liabilities 255.6      254.0    TOTAL CURRENT LIABILITIES 1,035.4      948.2    Long-term debt 1,434.9      1,436.9    Other non-current liabilities 593.3      614.6    TOTAL LIABILITIES 3,063.6      2,999.7    Hubbell Incorporated Shareholders' Equity 2,168.8      2,070.0    Noncontrolling interest 9.3      15.4    TOTAL EQUITY 2,178.1      2,085.4    TOTAL LIABILITIES AND EQUITY $ 5,241.7      $ 5,085.1    HUBBELL INCORPORATEDCondensed Consolidated Statement of Cash Flows(unaudited)(in millions)   Nine Months Ended September 30,   2021   2020 Cash Flows From Operating Activities       Net income attributable to Hubbell Incorporated $ 282.0        $ 270.3      Depreciation and amortization 122.6        117.0      Stock-based compensation expense 16.5        20.0      Loss on disposition of business 6.9        —      Loss on extinguishment of debt 16.8        —      Pension charge —        6.6      Provision for bad debt expense (0.1 )     8.3      Deferred income taxes 5.9        (4.3 )   Accounts receivable, net (165.0 )     (42.1 )   Inventories, net (97.9 )     45.1      Accounts payable 120.6        45.0      Current liabilities 5.3        (44.8 )   Contributions to defined benefit pension plans (0.1 )     (2.8 )   Other, net (6.7 )     37.3      Net cash provided by operating activities 306.8        455.6      Cash Flows From Investing Activities       Capital expenditures (66.5 )     (51.7 )   Proceeds from disposal of business 8.5        —      Acquisition of businesses, net of cash acquired 0.1        (2.0 )   Net change in investments (3.4 )     2.2      Other, net 7.8        5.1      Net cash used in investing activities (53.5 )     (46.4 )   Cash Flows From Financing Activities       Long-term debt issuance (repayment), net (1.3 )     (106.3 )   Short-term debt borrowings (repayments), net (24.2 )     (9.0 )   Payment of dividends (159.8 ).....»»

Category: earningsSource: benzingaOct 26th, 2021

CP reports third-quarter revenue growth of 4 percent; maintains full-year adjusted diluted EPS guidance

CALGARY, AB, Oct. 20, 2021 /PRNewswire/ - Canadian Pacific Railway Limited (TSX:CP) (NYSE:CP) today announced third-quarter revenues of $1.94 billion, diluted earnings per share ("EPS") of $0.70, adjusted diluted EPS1 of $0.88, an operating ratio ("OR") of 60.2 percent and an adjusted OR1 of 59.4 percent. "The third quarter presented challenges across the supply chain, but the CP team's commitment to the foundations of precision scheduled railroading enabled us to respond quickly and effectively to changing environments," said Keith Creel, CP President and Chief Executive Officer. "We are committed to controlling what we can control, as CP continues to focus on providing service excellence to our customers and driving value for our shareholders." Third-quarter highlights Revenues increased by 4 percent to $1.94 billion, from $1.86 billion last year Reported diluted EPS of $0.70, a 20 percent decrease from $0.88 last year, and adjusted diluted EPS of $0.88, a 7 percent increase from $0.82 last year Reported OR, which includes Kansas City Southern ("KCS") acquisition-related costs, increased by 200 basis points to 60.2 percent from 58.2 percent Adjusted OR, which excludes the KCS acquisition-related costs, increased 120 basis points to 59.4 percent over last year's third-quarter OR of 58.2 percent Updated outlookCP now expects low single-digit volume growth in 2021, as measured in revenue ton-miles, compared to 2020. CP remains confident that it will deliver full-year double-digit adjusted diluted EPS growth2,3 in 2021. CP's revised guidance continues to assume other components of net periodic benefit recovery to increase by approximately $40 million versus 2020, an effective tax rate of approximately 24.6 percent and capital expenditure of $1.55 billion. "Despite global supply chain issues and a challenging Canadian grain crop, we remain confident in our ability to deliver full-year double-digit adjusted diluted EPS growth," said Creel. "The underlying demand environment remains strong, and our commitment to generate sustainable, profitable growth will not be distracted by elements outside our control." Additionally, CP will continue its work preparing to create the first single-line rail network linking the U.S., Mexico and Canada by combining with Kansas City Southern. "The transitory issues over the past year have only reinforced the need for enhanced competition and optionality for North American shippers," Creel said. "Our excitement about the opportunities ahead with the combined companies continues to grow." 1 These measures have no standardized meanings prescribed by accounting principles generally accepted in the United States of America ("GAAP") and, therefore, may not be comparable to similar measures presented by other companies. These measures are defined and reconciled in the Non-GAAP Measures supplementary schedule of this Earnings Release. 2 CP's expectation for full year double-digit adjusted diluted EPS growth in 2021 is relative to 2020's adjusted diluted EPS of $3.53. CP's reported diluted EPS was $3.59 in 2020. 3 Although CP has provided a forward-looking non-GAAP measure (adjusted diluted EPS), management is unable to reconcile, without unreasonable efforts, the forward-looking adjusted diluted EPS to the most comparable GAAP measure (diluted EPS), due to unknown variables and uncertainty related to future results. These unknown variables may include unpredictable transactions of significant value. In recent years, CP has recognized acquisition-related costs (including legal, consulting and financing fees, and fair value gain or loss on foreign exchange (FX) forward contracts and interest rate hedges), the merger termination payment received, changes in income tax rates and a change to an uncertain tax item. These or other similar, large unforeseen transactions affect diluted EPS but may be excluded from CP's adjusted diluted EPS. Additionally, the U.S.-to-Canadian dollar FX rate is unpredictable and can have a significant impact on CP's reported results but may be excluded from CP's adjusted diluted EPS. In particular, CP excludes the FX impact of translating the Company's debt and lease liabilities from adjusted diluted EPS. For information regarding non-GAAP measures, including reconciliations to the most comparable GAAP measures, see the attached supplementary schedule Non-GAAP Measures. Conference call details CP will discuss its results with the financial community in a conference call beginning at 8 a.m. ET (6 a.m. MT) today. Conference call accessToronto participants dial in number: 1-416-764-8688  Operator assisted toll free dial in number: 1-888-390-0546   Callers should dial in 10 minutes prior to the call.  Webcast We encourage you to access the webcast and presentation material in the Investors section of CP's website at investor.cpr.ca. A replay of the third-quarter conference call will be available by phone through to Oct. 27, 2021 at 416-764-8677 or toll free 1-888-390-0541, password 549569. Note on forward-looking information This news release may contain certain forward-looking information and forward-looking statements (collectively, "forward-looking information") within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance. Forward-looking information may contain statements with words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "plan", "will", "outlook", "should" or similar words suggesting future outcomes. This news release contains forward-looking information relating, but not limited to statements concerning 2021 volume as measured in revenue ton-miles, adjusted diluted EPS growth, capital program investments, the U.S.-to-Canadian dollar exchange rate, annualized effective tax rate, other components of net periodic benefit recovery, cost control efforts, the success of our business, our operations, priorities and plans, anticipated financial and operational performance, business prospects and demand for our services and growth opportunities. The forward-looking information that may be in this news release is based on current expectations, estimates, projections and assumptions, having regard to CP's experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to: changes in business strategies, North American and global economic growth; commodity demand growth; sustainable industrial and agricultural production; commodity prices and interest rates; foreign exchange rates (as specified herein); effective tax rates (as specified herein); performance of our assets and equipment; sufficiency of our budgeted capital expenditures in carrying out our business plan; geopolitical conditions, applicable laws, regulations and government policies; the availability and cost of labour, services and infrastructure; the satisfaction by third parties of their obligations to CP; and the anticipated impacts of the COVID-19 pandemic on CP businesses, operating results, cash flows and/or financial condition. Although CP believes the expectations, estimates, projections and assumptions reflected in the forward-looking information presented herein are reasonable as of the date hereof, there can be no assurance that they will prove to be correct. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty. Undue reliance should not be placed on forward-looking information as actual results may differ materially from those expressed or implied by forward-looking information. By its nature, CP's forward-looking information involves inherent risks and uncertainties that could cause actual results to differ materially from the forward looking information, including, but not limited to, the following factors: changes in business strategies and strategic opportunities; general Canadian, U.S., Mexican and global social, economic, political, credit and business conditions; risks associated with agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures, including competition from other rail carriers, trucking companies and maritime shippers in Canada, the U.S. and Mexico; North American and global economic growth; industry capacity; shifts in market demand; changes in commodity prices and commodity demand; uncertainty surrounding timing and volumes of commodities being shipped via CP; inflation; geopolitical instability; changes in laws, regulations and government policies, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; changes in fuel prices; disruption in fuel supplies; uncertainties of investigations, proceedings or other types of claims and litigation; compliance with environmental regulations; labour disputes; changes in labour costs and labour difficulties; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; sufficiency of budgeted capital expenditures in carrying out business plans; services and infrastructure; the satisfaction by third parties of their obligations; currency and interest rate fluctuations; exchange rates; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; trade restrictions or other changes to international trade arrangements; the effects of current and future multinational trade agreements on the level of trade among Canada, the U.S. and Mexico; climate change and the market and regulatory responses to climate change; anticipated in-service dates; success of hedging activities; operational performance and reliability; customer, shareholder, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; the adverse impact of any termination or revocation by the Mexican government of Kansas City Southern de México, S.A. de C.V.'s Concession; public opinion; various events that could disrupt operations, including severe weather, such as droughts, floods, avalanches and earthquakes, and cybersecurity attacks, as well as security threats and governmental response to them, and technological changes; acts of terrorism, war or other acts of violence or crime or risk of such activities; insurance coverage limitations; material adverse changes in economic and industry conditions, including the availability of short and long-term financing; the pandemic created by the outbreak of COVID-19 and its variants and resulting effects on economic conditions, the demand environment for logistics requirements and energy prices, restrictions imposed by public health authorities or governments, fiscal and monetary policy responses by governments and financial institutions, and disruptions to global supply chains; the timing and completion of the pending KCS transaction, including receipt of regulatory and shareholder approvals and the satisfaction of other conditions precedent; interloper risk to the pending KCS transaction; the realization of anticipated benefits and synergies of the transaction and the timing thereof; the success of integration plans for KCS; the focus of management time and attention on the pending KCS transaction and other disruptions arising from the transaction; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favourable terms or at all; cost of debt and equity capital; potential changes in CP's share price which may negatively impact the value of consideration offered to KCS stockholders; and the ability of the management of the Company, its subsidiaries and affiliates to execute key priorities, including those in connection with the pending KCS transaction. The foregoing list of factors is not exhaustive. These and other factors are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States. Reference should be made to "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements" in CP's annual and interim reports on Form 10-K and 10-Q. Any forward-looking information contained in this news release is made as of the date hereof. Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, or the foregoing assumptions and risks affecting such forward-looking information, whether as a result of new information, future events or otherwise. About Canadian PacificCanadian Pacific is a transcontinental railway in Canada and the United States with direct links to major ports on the west and east coasts. CP provides North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpr.ca to see the rail advantages of CP. CP-IR FINANCIAL STATEMENTS INTERIM CONSOLIDATED STATEMENTS OF INCOME(unaudited) For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars, except share and per share data) 2021 2020 2021 2020 Revenues (Note 3) Freight $ 1,896 $ 1,821 $ 5,822 $ 5,573 Non-freight 46 42 133 125 Total revenues 1,942 1,863 5,955 5,698 Operating expenses Compensation and benefits 381 382 1,165 1,127 Fuel 199 140 623 483 Materials 51 53 164 162 Equipment rents 31 39 92 108 Depreciation and amortization 203 195 605 582 Purchased services and other (Note 9, 10) 303 275 932 853 Total operating expenses 1,168 1,084 3,581 3,315 Operating income 774 779 2,374 2,383 Less: Other expense (income) (Note 4, 10) 124 (36) 253 89 Merger termination fee (Note 10) — — (845) — Other components of net periodic benefit recovery (Note 14) (95) (86) (286) (257) Net interest expense 104 114 315 346 Income before income tax expense 641 787 2,937 2,205 Income tax expense (Note 5) 169 189 617 563 Net income $ 472 $ 598 $ 2,320 $ 1,642 Earnings per share (Note 1, 6) Basic earnings per share $ 0.71 $ 0.88 $ 3.48 $ 2.42 Diluted earnings per share $ 0.70 $ 0.88 $ 3.46 $ 2.41 Weighted-average number of shares (millions) (Note 1, 6) Basic 666.9 676.2 666.7 679.3 Diluted 669.8 679.0 669.8 681.8 Dividends declared per share (Note 1) $ 0.190 $ 0.190 $ 0.570 $ 0.522 See Notes to Interim Consolidated Financial Statements. INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(unaudited) For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Net income $ 472 $ 598 $ 2,320 $ 1,642 Net (loss) gain in foreign currency translation adjustments, net of hedging activities (17) 16 3 (18) Change in derivatives designated as cash flow hedges 141 3 69 6 Change in pension and post-retirement defined benefit plans 53 44 158 134 Other comprehensive income before income taxes 177 63 230 122 Income tax expense on above items (29) (29) (59) (16) Other comprehensive income (Note 7) 148 34 171 106 Comprehensive income $ 620 $ 632 $ 2,491 $ 1,748 See Notes to Interim Consolidated Financial Statements. INTERIM CONSOLIDATED BALANCE SHEETS AS AT(unaudited) September 30 December 31 (in millions of Canadian dollars) 2021 2020 Assets Current assets Cash and cash equivalents $ 210 $ 147 Restricted cash and cash equivalents 13 — Accounts receivable, net (Note 8) 811 825 Materials and supplies 227 208 Other current assets 190 141 1,451 1,321 Investments 205 199 Properties 21,007 20,422 Goodwill and intangible assets 372 366 Pension asset 1,232 894 Other assets 405 438 Payment to Kansas City Southern (Note 10) 1,773 — Total assets $ 26,445 $ 23,640 Liabilities and shareholders' equity Current liabilities Accounts payable and accrued liabilities $ 1,744 $ 1,467 Long-term debt maturing within one year (Note 11, 12) 1,932 1,186 3,676 2,653 Pension and other benefit liabilities 825 832 Other long-term liabilities 522 585 Long-term debt (Note 11, 12) 8,036 8,585 Deferred income taxes 3,918 3,666 Total liabilities 16,977 16,321 Shareholders' equity Share capital 2,008 1,983 Additional paid-in capital 68 55 Accumulated other comprehensive loss (Note 7) (2,643) (2,814) Retained earnings 10,035 8,095 9,468 7,319 Total liabilities and shareholders' equity $ 26,445 $ 23,640 See Contingencies (Note 16). See Notes to Interim Consolidated Financial Statements. INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited) For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Operating activities Net income $ 472 $ 598 $ 2,320 $ 1,642 Reconciliation of net income to cash provided by operating activities: Depreciation and amortization 203 195 605 582 Deferred income tax expense (Note 5) 130 45 190 133 Pension recovery and funding (Note 14) (62) (65) (188) (192) Foreign exchange loss (gain) on debt and lease liabilities (Note 4) 46 (40) (39) 89 Other operating activities, net (14) 56 (50) 11 Change in non-cash working capital balances related to operations (227) (296) 246 (448) Cash provided by operating activities 548 493 3,084 1,817 Investing activities Additions to properties (372) (484) (1,111) (1,341) Investment in Central Maine & Québec Railway — — — 19 Payment to Kansas City Southern (Note 10) (1,773) — (1,773) — Proceeds from sale of properties and other assets 16 2 65 9 Other — (1) (1) — Cash used in investing activities (2,129) (483) (2,820) (1,313) Financing activities Dividends paid (127) (113) (380) (339) Issuance of CP Common Shares 4 3 20 32 Purchase of CP Common Shares (Note 13) — (400) — (945) Issuance of long-term debt, excluding commercial paper — — — 958 Repayment of long-term debt, excluding commercial paper (Note 11) (318) (49) (349) (74) Proceeds from term loan (Note 11) 633 — 633 — Net issuance (repayment) of commercial paper (Note 11) 713 459 (66) (114) Net increase in short-term borrowings — — — 5 Acquisition-related financing fees (Note 10) — — (45) — Other (3) — (7) 11 Cash provided by (used in) financing activities 902 (100) (194) (466) Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents 10 (4) 6 12 Cash position (Decrease) increase in cash, cash equivalents, and restricted cash (669) (94) 76 50 Cash, cash equivalents, and restricted cash at beginning of period 892 277 147 133 Cash, cash equivalents, and restricted cash at end of period $ 223 $ 183 $ 223 $ 183 Supplemental disclosures of cash flow information: Income taxes paid $ 129 $ 311 $ 401 $ 455 Interest paid $ 153 $ 163 $ 365 $ 383 See Notes to Interim Consolidated Financial Statements. INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) For the three months ended September 30 (in millions of Canadian dollars except per share data) Common Shares (in millions) Share capital Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total shareholders' equity Balance at July 1, 2021 666.8 $ 2,003 $ 63 $ (2,791) $ 9,690 $ 8,965 Net income — — — — 472 472 Other comprehensive income (Note 7) — — — 148 — 148 Dividends declared ($0.190 per share) — — — — (127) (127) Effect of stock-based compensation expense — — 6 — — 6 Shares issued under stock option plan 0.1 5 (1) — — 4 Balance at September 30, 2021 666.9 $ 2,008 $ 68 $ (2,643) $ 10,035 $ 9,468 Balance at July 1, 2020 677.6 $ 1,990 $ 53 $ (2,450) $ 7,872 $ 7,465 Net income — — — — 598 598 Other comprehensive income (Note 7) — — — 34 — 34 Dividends declared ($0.190 per share) (Note 1) — — — — (128) (128) Effect of stock-based compensation expense — — 4 — — 4 CP Common Shares repurchased (Note 13) (5.3) (15) — — (381) (396) Shares issued under stock option plan 0.2 3 (1) — — 2 Balance at September 30, 2020 672.5 $ 1,978 $ 56 $ (2,416) $ 7,961 $ 7,579 For the nine months ended September 30 (in millions of Canadian dollars except per share data) Common shares (in millions) Share capital Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total shareholders' equity Balance at January 1, 2021 666.3 $ 1,983 $ 55 $ (2,814) $ 8,095 $ 7,319 Net income — — — — 2,320 2,320 Other comprehensive income (Note 7) — — — 171 — 171 Dividends declared ($0.570 per share) (Note 1) — — — — (380) (380) Effect of stock-based compensation expense — — 18 — — 18 Shares issued under stock option plan 0.6 25 (5) — — 20 Balance at September 30, 2021 666.9 $ 2,008 $ 68 $ (2,643) $ 10,035 $ 9,468 Balance at January 1, 2020 685.0 $ 1,993 $ 48 $ (2,522) $ 7,549 $ 7,068 Net income — — — — 1,642 1,642 Other comprehensive income (Note 7) — — — 106 — 106 Dividends declared ($0.522 per share) (Note 1) — — — — (353) (353) Effect of stock-based compensation expense — — 13 — — 13 CP Common Shares repurchased (Note 13) (13.7) (39) — — (877) (916) Shares issued under stock option plan 1.2 24 (5) — — 19 Balance at September 30, 2020 672.5 $ 1,978 $ 56 $ (2,416) $ 7,961 $ 7,579 See Notes to Interim Consolidated Financial Statements. NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (unaudited) 1    Basis of presentation These unaudited Interim Consolidated Financial Statements ("Interim Consolidated Financial Statements") of Canadian Pacific Railway Limited ("CPRL") and its subsidiaries (collectively, "CP", or "the Company"), expressed in Canadian dollars, reflect management's estimates and assumptions that are necessary for their fair presentation in conformity with generally accepted accounting principles in the United States of America ("GAAP"). They do not include all disclosures required under GAAP for annual financial statements and should be read in conjunction with the 2020 annual Consolidated Financial Statements and notes included in CP's 2020 Annual Report on Form 10-K. The accounting policies used are consistent with the accounting policies used in preparing the 2020 annual Consolidated Financial Statements. On April 21, 2021, the Company's shareholders approved a five-for-one share split of the Company's issued and outstanding Common Shares. On May 13, 2021, the Company's shareholders of record as of May 5, 2021 received four additional shares for every Common Share held. Ex-distribution trading in the Company's Common Shares on a split-adjusted basis commenced on May 14, 2021. Proportional adjustments were also made to outstanding awards under the Company's stock-based compensation plans in order to reflect the share split. All outstanding Common Shares, stock-based compensation awards, and per share amounts herein have been retrospectively adjusted to reflect the share split. CP's operations can be affected by seasonal fluctuations such as changes in customer demand and weather-related issues. This seasonality could impact quarter-over-quarter comparisons. In management's opinion, the Interim Consolidated Financial Statements include all adjustments (consisting of normal and recurring adjustments) necessary to present fairly such information. Interim results are not necessarily indicative of the results expected for the fiscal year. 2    Accounting changes Accounting pronouncements that became effective during the period covered by the Interim Consolidated Financial Statements did not have a material impact on the Company's Interim Consolidated Balance Sheets, Interim Consolidated Statements of Income, or Interim Consolidated Statements of Cash Flows. Likewise, accounting pronouncements issued, but not effective until after September 30, 2021, are not expected to have a material impact on the Company's Consolidated Balance Sheets, Consolidated Statements of Income, or Consolidated Statements of Cash Flows. Future changes Reference Rate Reform In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.  From the end of 2021, banks will no longer be required to report information that is used to determine the London Interbank Offered Rate ("LIBOR"), which is a benchmark interest rate commonly referenced in a variety of contractual agreements. As a result, LIBOR or other reference rates used globally could be discontinued. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. The guidance in the ASU was effective starting on March 12, 2020, and is available to be adopted on a prospective basis no later than December 31, 2022. The Company currently has a fully drawn U.S. $500 million non-revolving term credit facility referencing LIBOR that could be affected by the provisions of this ASU (See Note 11 - Debt). The Company also has a revolving credit facility that references LIBOR. The Company had no outstanding borrowings under the revolving credit facility as at September 30, 2021. The Company is evaluating the effects that the adoption of the ASU will have on its Consolidated Financial Statements and related disclosures, and whether it will elect to apply any of the optional expedients and exceptions provided in the ASU. 3    Revenues The following table disaggregates the Company's revenues from contracts with customers by major source: For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Freight Grain $ 352 $ 457 $ 1,244 $ 1,321 Coal 158 130 491 411 Potash 113 132 348 390 Fertilizers and sulphur 72 65 227 212 Forest products 89 85 259 244 Energy, chemicals and plastics 392 321 1,149 1,153 Metals, minerals and consumer products 196 152 535 474 Automotive 83 94 289 215 Intermodal 441 385 1,280 1,153 Total freight revenues 1,896 1,821 5,822 5,573 Non-freight excluding leasing revenues 25 27 75 80 Revenues from contracts with customers 1,921 1,848 5,897 5,653 Leasing revenues 21 15 58 45 Total revenues $ 1,942 $ 1,863 $ 5,955 $ 5,698 Contract liabilities        Contract liabilities represent payments received for performance obligations not yet satisfied and relate to deferred revenue, and are presented as components of "Accounts payable and accrued liabilities" and "Other long-term liabilities" on the Company's Interim Consolidated Balance Sheets. The following table summarizes the changes in contract liabilities: For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Opening balance $ 245 $ 79 $ 61 $ 146 Revenue recognized that was included in the contract liability balance at the beginning of the period (93) (25) (36) (95) Increase due to consideration received, net of revenue recognizedduring the period 4 5 131 8 Closing balance $ 156 $ 59 $ 156 $ 59 4    Other expense (income) For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Foreign exchange loss (gain) on debt and lease liabilities $ 46 $ (40) $ (39) $ 89 Other foreign exchange (gains) losses (7) 2 (9) (2) Acquisition-related costs (Note 10) 83 — 295 — Other 2 2 6 2 Other expense (income) $ 124 $ (36) $ 253 $ 89 5    Income taxes For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Current income tax expense $ 39 $ 144 $ 427 $ 430 Deferred income tax expense 130 45 190 133 Income tax expense $ 169 $ 189 $ 617 $ 563 The effective tax rates including discrete items for the three and nine months ended September 30, 2021 were 26.36% and 21.00%, respectively, compared to 23.97% and 25.52%, respectively for the same periods of 2020. For the three months ended September 30, 2021, the effective tax rate was 24.60%, excluding the discrete items of the Kansas City Southern ("KCS") acquisition-related costs of $98 million, and foreign exchange ("FX") loss of $46 million on debt and lease liabilities. For the three months ended September 30, 2020, the effective tax rate was 25.00%, excluding the discrete item of the FX gain of $40 million on debt and lease liabilities. For the nine months ended September 30, 2021, the effective tax rate was 24.60%, excluding the discrete items of the KCS acquisition-related costs of $442 million, the $845 million (U.S. $700 million) merger termination payment received in connection with KCS's termination of the Agreement and Plan of Merger (the "Original Merger Agreement"), and FX gain of $39 million on debt and lease liabilities. For the nine months ended September 30, 2020, the effective tax rate was 25.00%, excluding the discrete item of the FX loss of $89 million on debt and lease liabilities. 6    Earnings per share Basic earnings per share has been calculated using Net income for the period divided by the weighted-average number of shares outstanding during the period. The number of shares used in the earnings per share calculations are reconciled as follows: For the three months ended September 30 For the nine months ended September 30 (in millions) 2021 2020 2021 2020 Weighted-average basic shares outstanding 666.9 676.2 666.7 679.3 Dilutive effect of stock options 2.9 2.8 3.1 2.5 Weighted-average diluted shares outstanding 669.8 679.0 669.8 681.8 For the three and nine months ended September 30, 2021, there were 0.2 million and 0.1 million options, respectively, excluded from the computation of diluted earnings per share because their effects were not dilutive (three and nine months ended September 30, 2020 - nil and 0.6 million, respectively). 7    Changes in Accumulated other comprehensive loss ("AOCL") by component For the three months ended September 30 (in millions of Canadian dollars) Foreign currency net of hedging activities(1) Derivatives and.....»»

Category: earningsSource: benzingaOct 20th, 2021

CP reports third-quarter revenue growth of 4 percent; maintains full-year adjusted diluted EPS guidance

CALGARY, AB, Oct. 20, 2021 /CNW/ - Canadian Pacific Railway Limited (TSX:CP) (NYSE:CP) today announced third-quarter revenues of $1.94 billion, diluted earnings per share ("EPS") of $0.70, adjusted diluted EPS1 of $0.88, an operating ratio ("OR") of 60.2 percent and an adjusted OR1 of 59.4 percent. "The third quarter presented challenges across the supply chain, but the CP team's commitment to the foundations of precision scheduled railroading enabled us to respond quickly and effectively to changing environments," said Keith Creel, CP President and Chief Executive Officer. "We are committed to controlling what we can control, as CP continues to focus on providing service excellence to our customers and driving value for our shareholders." Third-quarter highlights Revenues increased by 4 percent to $1.94 billion, from $1.86 billion last year Reported diluted EPS of $0.70, a 20 percent decrease from $0.88 last year, and adjusted diluted EPS of $0.88, a 7 percent increase from $0.82 last year Reported OR, which includes Kansas City Southern ("KCS") acquisition-related costs, increased by 200 basis points to 60.2 percent from 58.2 percent Adjusted OR, which excludes the KCS acquisition-related costs, increased 120 basis points to 59.4 percent over last year's third-quarter OR of 58.2 percent Updated outlookCP now expects low single-digit volume growth in 2021, as measured in revenue ton-miles, compared to 2020. CP remains confident that it will deliver full-year double-digit adjusted diluted EPS growth2,3 in 2021. CP's revised guidance continues to assume other components of net periodic benefit recovery to increase by approximately $40 million versus 2020, an effective tax rate of approximately 24.6 percent and capital expenditure of $1.55 billion. "Despite global supply chain issues and a challenging Canadian grain crop, we remain confident in our ability to deliver full-year double-digit adjusted diluted EPS growth," said Creel. "The underlying demand environment remains strong, and our commitment to generate sustainable, profitable growth will not be distracted by elements outside our control." Additionally, CP will continue its work preparing to create the first single-line rail network linking the U.S., Mexico and Canada by combining with Kansas City Southern. "The transitory issues over the past year have only reinforced the need for enhanced competition and optionality for North American shippers," Creel said. "Our excitement about the opportunities ahead with the combined companies continues to grow." 1 These measures have no standardized meanings prescribed by accounting principles generally accepted in the United States of America ("GAAP") and, therefore, may not be comparable to similar measures presented by other companies. These measures are defined and reconciled in the Non-GAAP Measures supplementary schedule of this Earnings Release. 2 CP's expectation for full year double-digit adjusted diluted EPS growth in 2021 is relative to 2020's adjusted diluted EPS of $3.53. CP's reported diluted EPS was $3.59 in 2020. 3 Although CP has provided a forward-looking non-GAAP measure (adjusted diluted EPS), management is unable to reconcile, without unreasonable efforts, the forward-looking adjusted diluted EPS to the most comparable GAAP measure (diluted EPS), due to unknown variables and uncertainty related to future results. These unknown variables may include unpredictable transactions of significant value. In recent years, CP has recognized acquisition-related costs (including legal, consulting and financing fees, and fair value gain or loss on foreign exchange (FX) forward contracts and interest rate hedges), the merger termination payment received, changes in income tax rates and a change to an uncertain tax item. These or other similar, large unforeseen transactions affect diluted EPS but may be excluded from CP's adjusted diluted EPS. Additionally, the U.S.-to-Canadian dollar FX rate is unpredictable and can have a significant impact on CP's reported results but may be excluded from CP's adjusted diluted EPS. In particular, CP excludes the FX impact of translating the Company's debt and lease liabilities from adjusted diluted EPS. For information regarding non-GAAP measures, including reconciliations to the most comparable GAAP measures, see the attached supplementary schedule Non-GAAP Measures. Conference call details CP will discuss its results with the financial community in a conference call beginning at 8 a.m. ET (6 a.m. MT) today. Conference call accessToronto participants dial in number: 1-416-764-8688  Operator assisted toll free dial in number: 1-888-390-0546   Callers should dial in 10 minutes prior to the call.  Webcast We encourage you to access the webcast and presentation material in the Investors section of CP's website at investor.cpr.ca. A replay of the third-quarter conference call will be available by phone through to Oct. 27, 2021 at 416-764-8677 or toll free 1-888-390-0541, password 549569. Note on forward-looking information This news release may contain certain forward-looking information and forward-looking statements (collectively, "forward-looking information") within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance. Forward-looking information may contain statements with words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "plan", "will", "outlook", "should" or similar words suggesting future outcomes. This news release contains forward-looking information relating, but not limited to statements concerning 2021 volume as measured in revenue ton-miles, adjusted diluted EPS growth, capital program investments, the U.S.-to-Canadian dollar exchange rate, annualized effective tax rate, other components of net periodic benefit recovery, cost control efforts, the success of our business, our operations, priorities and plans, anticipated financial and operational performance, business prospects and demand for our services and growth opportunities. The forward-looking information that may be in this news release is based on current expectations, estimates, projections and assumptions, having regard to CP's experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to: changes in business strategies, North American and global economic growth; commodity demand growth; sustainable industrial and agricultural production; commodity prices and interest rates; foreign exchange rates (as specified herein); effective tax rates (as specified herein); performance of our assets and equipment; sufficiency of our budgeted capital expenditures in carrying out our business plan; geopolitical conditions, applicable laws, regulations and government policies; the availability and cost of labour, services and infrastructure; the satisfaction by third parties of their obligations to CP; and the anticipated impacts of the COVID-19 pandemic on CP businesses, operating results, cash flows and/or financial condition. Although CP believes the expectations, estimates, projections and assumptions reflected in the forward-looking information presented herein are reasonable as of the date hereof, there can be no assurance that they will prove to be correct. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty. Undue reliance should not be placed on forward-looking information as actual results may differ materially from those expressed or implied by forward-looking information. By its nature, CP's forward-looking information involves inherent risks and uncertainties that could cause actual results to differ materially from the forward looking information, including, but not limited to, the following factors: changes in business strategies and strategic opportunities; general Canadian, U.S., Mexican and global social, economic, political, credit and business conditions; risks associated with agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures, including competition from other rail carriers, trucking companies and maritime shippers in Canada, the U.S. and Mexico; North American and global economic growth; industry capacity; shifts in market demand; changes in commodity prices and commodity demand; uncertainty surrounding timing and volumes of commodities being shipped via CP; inflation; geopolitical instability; changes in laws, regulations and government policies, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; changes in fuel prices; disruption in fuel supplies; uncertainties of investigations, proceedings or other types of claims and litigation; compliance with environmental regulations; labour disputes; changes in labour costs and labour difficulties; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; sufficiency of budgeted capital expenditures in carrying out business plans; services and infrastructure; the satisfaction by third parties of their obligations; currency and interest rate fluctuations; exchange rates; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; trade restrictions or other changes to international trade arrangements; the effects of current and future multinational trade agreements on the level of trade among Canada, the U.S. and Mexico; climate change and the market and regulatory responses to climate change; anticipated in-service dates; success of hedging activities; operational performance and reliability; customer, shareholder, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; the adverse impact of any termination or revocation by the Mexican government of Kansas City Southern de México, S.A. de C.V.'s Concession; public opinion; various events that could disrupt operations, including severe weather, such as droughts, floods, avalanches and earthquakes, and cybersecurity attacks, as well as security threats and governmental response to them, and technological changes; acts of terrorism, war or other acts of violence or crime or risk of such activities; insurance coverage limitations; material adverse changes in economic and industry conditions, including the availability of short and long-term financing; the pandemic created by the outbreak of COVID-19 and its variants and resulting effects on economic conditions, the demand environment for logistics requirements and energy prices, restrictions imposed by public health authorities or governments, fiscal and monetary policy responses by governments and financial institutions, and disruptions to global supply chains; the timing and completion of the pending KCS transaction, including receipt of regulatory and shareholder approvals and the satisfaction of other conditions precedent; interloper risk to the pending KCS transaction; the realization of anticipated benefits and synergies of the transaction and the timing thereof; the success of integration plans for KCS; the focus of management time and attention on the pending KCS transaction and other disruptions arising from the transaction; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favourable terms or at all; cost of debt and equity capital; potential changes in CP's share price which may negatively impact the value of consideration offered to KCS stockholders; and the ability of the management of the Company, its subsidiaries and affiliates to execute key priorities, including those in connection with the pending KCS transaction. The foregoing list of factors is not exhaustive. These and other factors are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States. Reference should be made to "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements" in CP's annual and interim reports on Form 10-K and 10-Q. Any forward-looking information contained in this news release is made as of the date hereof. Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, or the foregoing assumptions and risks affecting such forward-looking information, whether as a result of new information, future events or otherwise. About Canadian PacificCanadian Pacific is a transcontinental railway in Canada and the United States with direct links to major ports on the west and east coasts. CP provides North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpr.ca to see the rail advantages of CP. CP-IR FINANCIAL STATEMENTS INTERIM CONSOLIDATED STATEMENTS OF INCOME(unaudited) For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars, except share and per share data) 2021 2020 2021 2020 Revenues (Note 3) Freight $ 1,896 $ 1,821 $ 5,822 $ 5,573 Non-freight 46 42 133 125 Total revenues 1,942 1,863 5,955 5,698 Operating expenses Compensation and benefits 381 382 1,165 1,127 Fuel 199 140 623 483 Materials 51 53 164 162 Equipment rents 31 39 92 108 Depreciation and amortization 203 195 605 582 Purchased services and other (Note 9, 10) 303 275 932 853 Total operating expenses 1,168 1,084 3,581 3,315 Operating income 774 779 2,374 2,383 Less: Other expense (income) (Note 4, 10) 124 (36) 253 89 Merger termination fee (Note 10) — — (845) — Other components of net periodic benefit recovery (Note 14) (95) (86) (286) (257) Net interest expense 104 114 315 346 Income before income tax expense 641 787 2,937 2,205 Income tax expense (Note 5) 169 189 617 563 Net income $ 472 $ 598 $ 2,320 $ 1,642 Earnings per share (Note 1, 6) Basic earnings per share $ 0.71 $ 0.88 $ 3.48 $ 2.42 Diluted earnings per share $ 0.70 $ 0.88 $ 3.46 $ 2.41 Weighted-average number of shares (millions) (Note 1, 6) Basic 666.9 676.2 666.7 679.3 Diluted 669.8 679.0 669.8 681.8 Dividends declared per share (Note 1) $ 0.190 $ 0.190 $ 0.570 $ 0.522 See Notes to Interim Consolidated Financial Statements. INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(unaudited) For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Net income $ 472 $ 598 $ 2,320 $ 1,642 Net (loss) gain in foreign currency translation adjustments, net of hedging activities (17) 16 3 (18) Change in derivatives designated as cash flow hedges 141 3 69 6 Change in pension and post-retirement defined benefit plans 53 44 158 134 Other comprehensive income before income taxes 177 63 230 122 Income tax expense on above items (29) (29) (59) (16) Other comprehensive income (Note 7) 148 34 171 106 Comprehensive income $ 620 $ 632 $ 2,491 $ 1,748 See Notes to Interim Consolidated Financial Statements. INTERIM CONSOLIDATED BALANCE SHEETS AS AT(unaudited) September 30 December 31 (in millions of Canadian dollars) 2021 2020 Assets Current assets Cash and cash equivalents $ 210 $ 147 Restricted cash and cash equivalents 13 — Accounts receivable, net (Note 8) 811 825 Materials and supplies 227 208 Other current assets 190 141 1,451 1,321 Investments 205 199 Properties 21,007 20,422 Goodwill and intangible assets 372 366 Pension asset 1,232 894 Other assets 405 438 Payment to Kansas City Southern (Note 10) 1,773 — Total assets $ 26,445 $ 23,640 Liabilities and shareholders' equity Current liabilities Accounts payable and accrued liabilities $ 1,744 $ 1,467 Long-term debt maturing within one year (Note 11, 12) 1,932 1,186 3,676 2,653 Pension and other benefit liabilities 825 832 Other long-term liabilities 522 585 Long-term debt (Note 11, 12) 8,036 8,585 Deferred income taxes 3,918 3,666 Total liabilities 16,977 16,321 Shareholders' equity Share capital 2,008 1,983 Additional paid-in capital 68 55 Accumulated other comprehensive loss (Note 7) (2,643) (2,814) Retained earnings 10,035 8,095 9,468 7,319 Total liabilities and shareholders' equity $ 26,445 $ 23,640 See Contingencies (Note 16). See Notes to Interim Consolidated Financial Statements. INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited) For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Operating activities Net income $ 472 $ 598 $ 2,320 $ 1,642 Reconciliation of net income to cash provided by operating activities: Depreciation and amortization 203 195 605 582 Deferred income tax expense (Note 5) 130 45 190 133 Pension recovery and funding (Note 14) (62) (65) (188) (192) Foreign exchange loss (gain) on debt and lease liabilities (Note 4) 46 (40) (39) 89 Other operating activities, net (14) 56 (50) 11 Change in non-cash working capital balances related to operations (227) (296) 246 (448) Cash provided by operating activities 548 493 3,084 1,817 Investing activities Additions to properties (372) (484) (1,111) (1,341) Investment in Central Maine & Québec Railway — — — 19 Payment to Kansas City Southern (Note 10) (1,773) — (1,773) — Proceeds from sale of properties and other assets 16 2 65 9 Other — (1) (1) — Cash used in investing activities (2,129) (483) (2,820) (1,313) Financing activities Dividends paid (127) (113) (380) (339) Issuance of CP Common Shares 4 3 20 32 Purchase of CP Common Shares (Note 13) — (400) — (945) Issuance of long-term debt, excluding commercial paper — — — 958 Repayment of long-term debt, excluding commercial paper (Note 11) (318) (49) (349) (74) Proceeds from term loan (Note 11) 633 — 633 — Net issuance (repayment) of commercial paper (Note 11) 713 459 (66) (114) Net increase in short-term borrowings — — — 5 Acquisition-related financing fees (Note 10) — — (45) — Other (3) — (7) 11 Cash provided by (used in) financing activities 902 (100) (194) (466) Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents 10 (4) 6 12 Cash position (Decrease) increase in cash, cash equivalents, and restricted cash (669) (94) 76 50 Cash, cash equivalents, and restricted cash at beginning of period 892 277 147 133 Cash, cash equivalents, and restricted cash at end of period $ 223 $ 183 $ 223 $ 183 Supplemental disclosures of cash flow information: Income taxes paid $ 129 $ 311 $ 401 $ 455 Interest paid $ 153 $ 163 $ 365 $ 383 See Notes to Interim Consolidated Financial Statements. INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) For the three months ended September 30 (in millions of Canadian dollars except per share data) Common Shares (in millions) Share capital Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total shareholders' equity Balance at July 1, 2021 666.8 $ 2,003 $ 63 $ (2,791) $ 9,690 $ 8,965 Net income — — — — 472 472 Other comprehensive income (Note 7) — — — 148 — 148 Dividends declared ($0.190 per share) — — — — (127) (127) Effect of stock-based compensation expense — — 6 — — 6 Shares issued under stock option plan 0.1 5 (1) — — 4 Balance at September 30, 2021 666.9 $ 2,008 $ 68 $ (2,643) $ 10,035 $ 9,468 Balance at July 1, 2020 677.6 $ 1,990 $ 53 $ (2,450) $ 7,872 $ 7,465 Net income — — — — 598 598 Other comprehensive income (Note 7) — — — 34 — 34 Dividends declared ($0.190 per share) (Note 1) — — — — (128) (128) Effect of stock-based compensation expense — — 4 — — 4 CP Common Shares repurchased (Note 13) (5.3) (15) — — (381) (396) Shares issued under stock option plan 0.2 3 (1) — — 2 Balance at September 30, 2020 672.5 $ 1,978 $ 56 $ (2,416) $ 7,961 $ 7,579 For the nine months ended September 30 (in millions of Canadian dollars except per share data) Common shares (in millions) Share capital Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total shareholders' equity Balance at January 1, 2021 666.3 $ 1,983 $ 55 $ (2,814) $ 8,095 $ 7,319 Net income — — — — 2,320 2,320 Other comprehensive income (Note 7) — — — 171 — 171 Dividends declared ($0.570 per share) (Note 1) — — — — (380) (380) Effect of stock-based compensation expense — — 18 — — 18 Shares issued under stock option plan 0.6 25 (5) — — 20 Balance at September 30, 2021 666.9 $ 2,008 $ 68 $ (2,643) $ 10,035 $ 9,468 Balance at January 1, 2020 685.0 $ 1,993 $ 48 $ (2,522) $ 7,549 $ 7,068 Net income — — — — 1,642 1,642 Other comprehensive income (Note 7) — — — 106 — 106 Dividends declared ($0.522 per share) (Note 1) — — — — (353) (353) Effect of stock-based compensation expense — — 13 — — 13 CP Common Shares repurchased (Note 13) (13.7) (39) — — (877) (916) Shares issued under stock option plan 1.2 24 (5) — — 19 Balance at September 30, 2020 672.5 $ 1,978 $ 56 $ (2,416) $ 7,961 $ 7,579 See Notes to Interim Consolidated Financial Statements. NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (unaudited) 1    Basis of presentation These unaudited Interim Consolidated Financial Statements ("Interim Consolidated Financial Statements") of Canadian Pacific Railway Limited ("CPRL") and its subsidiaries (collectively, "CP", or "the Company"), expressed in Canadian dollars, reflect management's estimates and assumptions that are necessary for their fair presentation in conformity with generally accepted accounting principles in the United States of America ("GAAP"). They do not include all disclosures required under GAAP for annual financial statements and should be read in conjunction with the 2020 annual Consolidated Financial Statements and notes included in CP's 2020 Annual Report on Form 10-K. The accounting policies used are consistent with the accounting policies used in preparing the 2020 annual Consolidated Financial Statements. On April 21, 2021, the Company's shareholders approved a five-for-one share split of the Company's issued and outstanding Common Shares. On May 13, 2021, the Company's shareholders of record as of May 5, 2021 received four additional shares for every Common Share held. Ex-distribution trading in the Company's Common Shares on a split-adjusted basis commenced on May 14, 2021. Proportional adjustments were also made to outstanding awards under the Company's stock-based compensation plans in order to reflect the share split. All outstanding Common Shares, stock-based compensation awards, and per share amounts herein have been retrospectively adjusted to reflect the share split. CP's operations can be affected by seasonal fluctuations such as changes in customer demand and weather-related issues. This seasonality could impact quarter-over-quarter comparisons. In management's opinion, the Interim Consolidated Financial Statements include all adjustments (consisting of normal and recurring adjustments) necessary to present fairly such information. Interim results are not necessarily indicative of the results expected for the fiscal year. 2    Accounting changes Accounting pronouncements that became effective during the period covered by the Interim Consolidated Financial Statements did not have a material impact on the Company's Interim Consolidated Balance Sheets, Interim Consolidated Statements of Income, or Interim Consolidated Statements of Cash Flows. Likewise, accounting pronouncements issued, but not effective until after September 30, 2021, are not expected to have a material impact on the Company's Consolidated Balance Sheets, Consolidated Statements of Income, or Consolidated Statements of Cash Flows. Future changes Reference Rate Reform In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.  From the end of 2021, banks will no longer be required to report information that is used to determine the London Interbank Offered Rate ("LIBOR"), which is a benchmark interest rate commonly referenced in a variety of contractual agreements. As a result, LIBOR or other reference rates used globally could be discontinued. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. The guidance in the ASU was effective starting on March 12, 2020, and is available to be adopted on a prospective basis no later than December 31, 2022. The Company currently has a fully drawn U.S. $500 million non-revolving term credit facility referencing LIBOR that could be affected by the provisions of this ASU (See Note 11 - Debt). The Company also has a revolving credit facility that references LIBOR. The Company had no outstanding borrowings under the revolving credit facility as at September 30, 2021. The Company is evaluating the effects that the adoption of the ASU will have on its Consolidated Financial Statements and related disclosures, and whether it will elect to apply any of the optional expedients and exceptions provided in the ASU. 3    Revenues The following table disaggregates the Company's revenues from contracts with customers by major source: For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Freight Grain $ 352 $ 457 $ 1,244 $ 1,321 Coal 158 130 491 411 Potash 113 132 348 390 Fertilizers and sulphur 72 65 227 212 Forest products 89 85 259 244 Energy, chemicals and plastics 392 321 1,149 1,153 Metals, minerals and consumer products 196 152 535 474 Automotive 83 94 289 215 Intermodal 441 385 1,280 1,153 Total freight revenues 1,896 1,821 5,822 5,573 Non-freight excluding leasing revenues 25 27 75 80 Revenues from contracts with customers 1,921 1,848 5,897 5,653 Leasing revenues 21 15 58 45 Total revenues $ 1,942 $ 1,863 $ 5,955 $ 5,698 Contract liabilities        Contract liabilities represent payments received for performance obligations not yet satisfied and relate to deferred revenue, and are presented as components of "Accounts payable and accrued liabilities" and "Other long-term liabilities" on the Company's Interim Consolidated Balance Sheets. The following table summarizes the changes in contract liabilities: For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Opening balance $ 245 $ 79 $ 61 $ 146 Revenue recognized that was included in the contract liability balance at the beginning of the period (93) (25) (36) (95) Increase due to consideration received, net of revenue recognizedduring the period 4 5 131 8 Closing balance $ 156 $ 59 $ 156 $ 59 4    Other expense (income) For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Foreign exchange loss (gain) on debt and lease liabilities $ 46 $ (40) $ (39) $ 89 Other foreign exchange (gains) losses (7) 2 (9) (2) Acquisition-related costs (Note 10) 83 — 295 — Other 2 2 6 2 Other expense (income) $ 124 $ (36) $ 253 $ 89 5    Income taxes For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2021 2020 2021 2020 Current income tax expense $ 39 $ 144 $ 427 $ 430 Deferred income tax expense 130 45 190 133 Income tax expense $ 169 $ 189 $ 617 $ 563 The effective tax rates including discrete items for the three and nine months ended September 30, 2021 were 26.36% and 21.00%, respectively, compared to 23.97% and 25.52%, respectively for the same periods of 2020. For the three months ended September 30, 2021, the effective tax rate was 24.60%, excluding the discrete items of the Kansas City Southern ("KCS") acquisition-related costs of $98 million, and foreign exchange ("FX") loss of $46 million on debt and lease liabilities. For the three months ended September 30, 2020, the effective tax rate was 25.00%, excluding the discrete item of the FX gain of $40 million on debt and lease liabilities. For the nine months ended September 30, 2021, the effective tax rate was 24.60%, excluding the discrete items of the KCS acquisition-related costs of $442 million, the $845 million (U.S. $700 million) merger termination payment received in connection with KCS's termination of the Agreement and Plan of Merger (the "Original Merger Agreement"), and FX gain of $39 million on debt and lease liabilities. For the nine months ended September 30, 2020, the effective tax rate was 25.00%, excluding the discrete item of the FX loss of $89 million on debt and lease liabilities. 6    Earnings per share Basic earnings per share has been calculated using Net income for the period divided by the weighted-average number of shares outstanding during the period. The number of shares used in the earnings per share calculations are reconciled as follows: For the three months ended September 30 For the nine months ended September 30 (in millions) 2021 2020 2021 2020 Weighted-average basic shares outstanding 666.9 676.2 666.7 679.3 Dilutive effect of stock options 2.9 2.8 3.1 2.5 Weighted-average diluted shares outstanding 669.8 679.0 669.8 681.8 For the three and nine months ended September 30, 2021, there were 0.2 million and 0.1 million options, respectively, excluded from the computation of diluted earnings per share because their effects were not dilutive (three and nine months ended September 30, 2020 - nil and 0.6 million, respectively). 7    Changes in Accumulated other comprehensive loss ("AOCL") by component For the three months ended September 30 (in millions of Canadian dollars) Foreign currency net of hedging activities(1) Derivatives andother(1).....»»

Category: earningsSource: benzingaOct 20th, 2021

Keysight (KEYS) Solutions to Enable Scania Transition to EV

The customized turnkey battery laboratory solution from Keysight (KEYS) will enable Scania's effective battery testing and tailored deployment. Keysight Technologies, Inc. KEYS recently announced that its Scienlab test systems will be deployed by Scania as part of its concerted efforts to shift to e-mobility for commercial vehicles. The comprehensive test solutions will likely help accelerate the development and improvement of battery cells for electric vehicles for customized battery life optimization and key actionable insights.Sweden-based Scania, an integral part of Volkswagen AG VWAGY, primarily manufactures buses and trucks. It is developing a new state-of-the-art battery laboratory at its research and development facilities in Södertälje, Sweden, spanning 1,000 square meters, including three 250-square-meter test halls for battery cells, modules and packs. Leveraging Keysight’s Scienlab battery test system, it aims to test battery performance and lifespan in various climatic conditions ranging from -40°C to 70°C.The customized turnkey battery laboratory solution from Keysight will enable the Volkswagen division’s effective battery testing and tailored deployment. In addition to Keysight’s Energy Storage Discover Software for test and control, Scania has also deployed its PathWave Lab Operations for Battery Test, which is an integrated, web-based lab management platform to optimize workflow, test throughput and data management. This will enable the vehicle manufacturer to better manage its resources such as lab personnel, test systems and devices under test to optimize the planning and coordination of its battery laboratory.The laboratory will help Scania test the performance of battery packs on operational electric trucks and buses without removing batteries by parking them in close proximity and connecting them to the testing equipment. It will further help it determine the best operational conditions for the battery for tailored utilization and optimization.Electronic devices form the very fulcrum of Internet of Things (IoT) services, wireless devices, data centers and 5G technologies. The rapid adoption of these devices is increasing the demand for electronics testing equipment. Further, technical advancements in mobile communications, semiconductors and automotive markets are likely to drive growth. Moreover, the rising demand for power management applications is a key catalyst for Keysight. Sturdy efforts toward the modification of the Internet infrastructure and evolution of smart cars & autonomous-driving vehicles bode well for its future growth potential.It has lost 8.1% over the past year compared with the industry’s decline of 10.8%. It carries a Zacks Rank #2 (Buy).Image Source: Zacks Investment ResearchHere are some other stocks in the industry that investors can consider:Clearfield, Inc. CLFD, sporting a Zacks Rank #1 (Strong Buy), is a solid pick for investors in the broader industry. You can see the complete list of today’s Zacks #1 Rank stocks here.Clearfield delivered an earnings surprise of 37.5%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 114.7% since June 2021. Over the past year, Clearfield has gained a solid 60.7%.Sierra Wireless, Inc. SWIR carries a Zacks Rank #2. It has a long-term earnings growth expectation of 15% and delivered an earnings surprise of 223.7%, on average, in the trailing four quarters.Over the past year, Sierra Wireless has gained 48.3%. Earnings estimates for the current year for the stock have moved up 616.7% since June 2021. The company continues to launch innovative products for business-critical operations that require high security and optimum 5G performance. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sierra Wireless, Inc. (SWIR): Free Stock Analysis Report Keysight Technologies Inc. (KEYS): Free Stock Analysis Report Clearfield, Inc. (CLFD): Free Stock Analysis Report Volkswagen AG Unsponsored ADR (VWAGY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 28th, 2022

Contract manufacturer Intandem Solutions shifts to commercial business

This nonprofit, that offers employment services to people with developmental disabilities, lost 30% of revenue with the end of subsidy programs in 2020. As a result, it's transitioning to a commercial business......»»

Category: topSource: bizjournalsJun 23rd, 2022

Here"s Why You Should Hold on to Inogen (INGN) Stock For Now

Investors continue to be optimistic about Inogen (INGN) on its potential in the POC space and a strong product portfolio. Inogen, Inc. INGN is well poised for growth in the coming quarters, backed by its high prospects in the portable oxygen concentrator (“POC”) space. Solid performance in the first quarter of 2022 and a strong product portfolio also buoy optimism. Headwinds resulting from Medicare and foreign exchange fluctuations are major downsides.Over the past year, the Zacks Rank #3 (Hold) stock has lost 64.1% compared with the 29.7% fall of the industry and 11.8% decline of the S&P 500.The renowned provider of POCs has a market capitalization of $563.6 million. The company projects 72.6% growth for 2023 and expects to witness continued improvements in its business. Inogen surpassed the Zacks Consensus Estimates in three of the trailing four quarters and missed the same in one, delivering an earnings surprise of 134.1%, on average.Image Source: Zacks Investment ResearchLet’s delve deeper.High Prospects in the POC Space: We are optimistic about the POCs’ superiority to conventional oxygen therapy (known as delivery model). POCs provide unlimited oxygen supply anywhere, thereby enhancing patient independence and mobility. Management at Inogen expects this to have an incremental positive impact on its industry and POC adoption.Product Portfolio: We are optimistic about Inogen’s expanding product portfolio. The company provides oxygen concentrator solutions for portable and stationary use. Notable products offered by the company include Inogen One G5 in the domestic business-to-business and direct-to-consumer channels, besides the Inogen One G3 and One G4 POC. Inogen At Home is aptly formulated for patients who need oxygen therapy during sleep.Management has confirmed Inogen’s plan of incorporating the Tidal Assist Ventilator directly into the Inogen One Portable Oxygen Concentrators and making the SideKick TAV product compatible with the Inogen At-Home Stationary Concentrator.Strong Q1 Results: Inogen’s robust year-over-year uptick in rental revenues in first-quarter 2022 buoys optimism. Strength in international business-to-business and domestic direct-to-consumer sales is encouraging. Inogen’s encouraging progress on its new commercial strategy for the prescriber channel raises our optimism. Positive initial results across Inogen’s contract sales organization, Ashfield, are also promising.DownsidesMedicare Headwinds: The Centers for Medicare & Medicaid Services has issued a final rule which requires Medicare prior authorization for certain durable medical equipment, prosthetics, orthotics and supplies that the agency characterizes as “frequently subject to unnecessary utilization.” If Inogen’s products are subject to prior authorization, it could reduce the number of patients qualified to come on service using their Medicare benefits. This could delay the start of treatment for such patients while the company waits for the prior authorization. It could also decrease sales productivity.Forex Woes: Inogen generates a significant portion of its revenues from the international market. Management expects international revenues to remain lumpy owing to the timing and size of the distributor.  It also expects adverse foreign currency exchange rates to impede revenue growth in the near term owing to the strengthening of the U.S. dollar against the Euro and other foreign currencies.Estimate TrendInogen has been witnessing a negative estimate revision trend for 2022. Over the past 90 days, the Zacks Consensus Estimate for its loss per share has widened from $1.11 to $1.53.The Zacks Consensus Estimate for second-quarter 2022 revenues is pegged at $100.6 million, suggesting a 1% decline from the year-ago reported number.Key PicksSome better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. AMN, Omnicell, Inc. OMCL and Masimo Corporation MASI.AMN Healthcare, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.You can see the complete list of today’s Zacks #1 Rank stocks here.AMN Healthcare has gained 7.6% against the industry’s 54.2% fall in the past year.Omnicell, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 20%. OMCL’s earnings surpassed estimates in three of the trailing four quarters and missed the same in the other, the average beat being 13.4%.Omnicell has lost 25.2% compared with the industry’s 59.9% fall over the past year.Masimo, carrying a Zacks Rank #2 at present, has an earnings yield of 3.6% against the industry’s negative yield. MASI’s earnings surpassed estimates in the trailing four quarters, the average beat being 4.4%.Masimo has lost 47.1% compared with the industry’s 29.7% fall over the past year. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Omnicell, Inc. (OMCL): Free Stock Analysis Report Masimo Corporation (MASI): Free Stock Analysis Report AMN Healthcare Services Inc (AMN): Free Stock Analysis Report Inogen, Inc (INGN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 22nd, 2022

Owens Corning (OC) to Buy Natural Polymers, Enhance Portfolio

The Natural Polymers buyout to boost Owens Corning's (OC) core insulation product portfolio. Owens Corning Inc. OC has signed a deal to acquire a manufacturer of spray polyurethane foam insulation, Natural Polymers, LLC, thereby expanding its core insulation product offerings. However, the terms of the transaction, which is expected to close in third-quarter 2022, were not disclosed.Shares of this building materials systems and composite solutions provider slipped by a meager 0.5% in the trading session on Jun 21, 2022.Key TakeawaysBased in Cortland, IL, Natural Polymers has the expertise in developing high-quality products and systems, and offers the least-volatile organic compound products currently available in the spray foam industry.The various business products of Natural Polymers are GREENGUARD Gold Certified by Underwriter’s Laboratories, which help in reducing indoor air pollution and the risk of chemical exposure.This buyout will enhance Owens Corning’s approach to strengthen its core building and construction products, and expand addressable markets into higher-growth segments.Natural Polymers’ technology will enable Owens Corning to offer its customers a more diversified insulation product portfolio.Natural Polymers’ business, which is expected to generate $100 million of sales in 2022, has shown a solid record of above-market growth. It is also expected to realize double-digit growth over the next several years.Product Expansion Via AcquisitionsAcquisitions are an important part of Owens Corning’s growth strategy. It is assessing its investment in bolt-on acquisitions that leverage its commercial, operational and geographic strength and expand its functional areas of offering.In April 2022, Owens Corning signed a deal with JR Plastics Corporation to acquire WearDeck, a premium producer of composite weather-resistant decking for commercial and residential applications. WearDeck is estimated to generate revenues of approximately $60 million in 2022.Owens Corning continues to invest in accelerating new product and process innovation to support customers and generate additional growth. Owens Corning anticipates gaining from the existing product portfolio and initiatives to better production efficiency. Its efforts to introduce products are encouraging. During first-quarter 2022, the company launched 16 new or refreshed products across global businesses. These products span across core product platforms, including roofing shingles and components, insulation XPS foam and mineral wool, and wind, non-woven, and other composite materials. Image Source: Zacks Investment ResearchComing to the share price performance, OC shares have outperformed its industry so far this year despite supply-chain disruptions, and significant inflation in material and transportation, given the above-mentioned tailwinds.This Zacks Rank #3 (Hold) company is benefiting from market-leading businesses, innovative products and process technologies, and capabilities.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.3 Top-Ranked Construction Stocks to BuySome better-ranked stocks which warrant a look in the Construction sector are Meritage Homes Corporation MTH, NVR, Inc. NVR and M/I Homes, Inc. MHO.Meritage Homes is one of the leading designers and builders of single-family homes. The company currently sports a Zacks Rank #1.Meritage Homes has declined 46.8% year to date. That said, earnings are expected to grow 42.7% in 2022. Earnings estimates have moved 1.4% north for 2022 over the past 30 days.NVR currently holds a Zacks Rank #1. The company is engaged in the construction and sale of single-family detached homes, townhomes and condominium buildings, all of which are primarily constructed on a pre-sold basis.NVR shares have declined 35.6% over a year. However, earnings are expected to grow 68.4% in 2022. Earnings estimates have increased 20.4% for 2022 over the past 30 days.M/I Homes currently carries a Zacks Rank #2 (Buy). This is one of the nation's leading builders of single-family homes.M/I Homes has lost 42.1% year to date. Earnings for 2022 are expected to grow 21.3%. Earnings estimates have increased 5.6% for 2022 over the past 30 days. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Meritage Homes Corporation (MTH): Free Stock Analysis Report NVR, Inc. (NVR): Free Stock Analysis Report Owens Corning Inc (OC): Free Stock Analysis Report MI Homes, Inc. (MHO): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 22nd, 2022

4 Industrial Services Stocks to Watch in a Prospering Industry

Backed by the ongoing expansion in manufacturing activities and e-commerce, the prospects of the industrial services industry hold promise despite the ongoing supply chain disruptions. We suggest keeping an eye on stocks like GWW, SITE, MSM and SCSC that are poised well to gain on these trends. The Zacks Industrial Services industry is poised to benefit from the ongoing expansion in the manufacturing sector despite the prevailing supply chain disruptions and cost pressures. Pricing actions and cost-cutting measures undertaken by the industry players have been driving margins.It is worth mentioning that the rise in e-commerce activities will act as a key catalyst for the industry. The industry players, including W.W. Grainger, Inc. GWW, SiteOne Landscape Supply, Inc. SITE, MSC Industrial Direct Company, Inc. MSM and ScanSource, Inc. SCSC, have been making efforts to capitalize on this trend.About the IndustryThe Zacks Industrial Services industry comprises companies that provide industrial equipment products and MRO (maintenance, repair and operations) services. It includes activities such as routine maintenance work, emergency maintenance and spare parts inventory control, which keep a facility and its equipment in good operating condition. The industry participants serve a wide array of customers ranging from commercial, government, healthcare to manufacturing. The industry's products (power tools, hand tools, cutting fluids, lubricants, Personal Protective Equipment and consumables) are utilized in production and plant maintenance but are not directly related to customers’ core products or services. By offering inventory management, process and procurement solutions, these companies reduce MRO supply chain costs and improve customers' plant floor productivity.What's Shaping the Future of Industrial Services IndustryMomentum in Manufacturing Activity: Around 70% of the industry’s revenues are derived from sales in the manufacturing sector. Trends in customers’ activity have historically correlated to changes in the Metalworking Business Index (“MBI”) and the Industrial Production Index (“IP”). The MBI is a sentiment index developed from a monthly survey of the U.S. metalworking industry, focused on durable goods manufacturing. The index has been above 50 lately, which indicates expansion. Backlog remains near historic highs. Per the Federal Reserve, manufacturing output has gained 4.8% over the past 12 months. In manufacturing, new orders, production and backlogs are growing at a rapid pace. The ongoing improvement in business sentiment and operational activity instills further optimism in the industrial services industry’s prospects.Supply Chain Issues and Cost Woes Persist:  The COVID-19 pandemic has impacted factory productivity and the supply chain. These supply chain and capacity challenges have led to higher transportation and labor costs due to the need to deliver finished goods to customers in a timely manner. Restrictions or disruptions of transportation, such as reduced availability of air transport, port closures and increased border controls or closures, in certain cases, have resulted in higher costs and delays, both for obtaining raw materials and components and shipping finished goods to customers. The companies have been witnessing tight labor availability for some positions and incurring higher labor costs to meet the high levels of demand. COVID-19-related worker absenteeism also remains an issue. Inflationary cost pressures add to the woes. Meanwhile, the industry players have been focusing on pricing actions, cost-cutting measures, efforts to improve productivity and efficiency, and diversification of supplier base to mitigate some of these headwinds.E-Commerce Acting as a Key Catalyst: MRO demand has been significantly impacted by the evolution of e-commerce. Customers’ demand for highly tailored solutions with real-time access to information and rapid delivery of products is on the rise. Customers basically want to execute their business activities in the most efficient way possible, which often means online. The pandemic led to a significant push in e-commerce activities. In 2020, over two billion people purchased goods or services online, recording e-retail sales above $4.2 trillion. In 2021, global retail e-commerce sales amounted to approximately $4.9 trillion. This is expected to go up 50% over the next four years and attain a level of around $7.4 trillion dollars by 2025. To capitalize on this trend, the players in the industrial services industry have increased their focus on making investments in e-commerce and digital capabilities.Zacks Industry Rank Indicates Bright ProspectsThe group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright prospects in the near term. The Zacks Industrial Services Industry, which is a 23-stock group within the broader Zacks Industrial Products Sector, currently carries a Zacks Industry Rank #48, which places it at the top 19% of 252 Zacks industries. 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 Industrial services stocks that investors can keep an eye on, it’s worth taking a look at the industry’s stock-market performance and valuation picture. Industry Versus S&P 500 & SectorThe Industrial Services industry has underperformed its own sector and the Zacks S&P 500 composite over the past year.Over this period, the industry has fallen 53.8% compared with the sector’s decline of 24.4%. The Zacks S&P 500 composite has slumped 14% in the same time frame.One-Year Price Performance Industry's Current ValuationOn the basis of the forward 12-month EV/EBITDA ratio, which is a commonly used multiple for valuing Industrial Services companies, we see that the industry is currently trading at 21.40x compared with the S&P 500’s 10.84x and the Industrial Products sector’s forward 12-month EV/EBITDA of 13.36x. This is shown in the charts below.Enterprise Value/EBITDA (EV/EBITDA) F12M RatioEnterprise Value/EBITDA (EV/EBITDA) F12M RatioOver the last five years, the industry has traded as high as 35.77x and as low as 8.30x, with the median being at 11.87x.4 Industrial Services Stocks to Keep an Eye onGrainger: The company is well-poised to gain from efforts to increase its customer base through incremental marketing investments and effective marketing strategies. GWW has been witnessing strong growth in non-pandemic product sales as the U.S. economy recovered. The company’s product mix is stabilizing as customers return to more normal operations. Grainger is thus investing in non-pandemic product inventory and partnering with suppliers to mitigate supply-related challenges, inbound lead time challenges and any possible cost increases. Investments in e-commerce and digital capabilities will yield results. Increased e-commerce sales and strong demand for non-pandemic products will continue to drive the top line. Cost control measures undertaken by the company will sustain margins.Lake Forest, IL-based Grainger is a broad line, business-to-business distributor of MRO supplies and other related products and services. This company currently has a Zacks Rank #2 (Buy) and an estimated long-term earnings growth rate of 13%. The Zacks Consensus Estimate for 2022 earnings has moved up 7% in the past 60 days. The consensus mark indicates year-over-year growth of 32.5%. GWW currently has a trailing four-quarter earnings surprise of 4.35%, on average.Price and Consensus: GWWSiteOne Landscape Supply: The company has been benefiting from robust demand as customers continue to invest in their outdoor living spaces. In addition to organic growth, it has been enhancing its business through acquisitions to increase its customer base, broaden product lines and expand its geographic reach. SITE acquired eight new high-performing companies in 2021, followed by three buyouts (JK Enterprise Landscape Supply, BellStone Masonry Supply and Preferred Seed) so far this year. The company will gain from its focus on cost reduction, driving operational excellence, product category management, enhancing supply chain efficiency and strengthening pricing. The company has been investing more in sophisticated information technology systems and data analytics.Roswell, GA-based SiteOne Landscape is a national wholesale distributor of landscape supplies. It currently carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the company’s earnings for fiscal 2022 indicates year-over-year growth of 9.8%. The estimate has moved up 5% in the past 60 days. The company has a trailing four-quarter earnings surprise of 129.9%, on average.Price and Consensus: SITEMSC Industrial Direct Company: The company has been committed to acquiring new companies to expand its product offering. It recently acquired Engman-Taylor, which will strengthen its metalworking business. MSM has been awarded a five-year contract to service 10 U.S. Marine core bases across the Continental United States, Hawaii and Japan, which will fuel revenues in the remaining part of fiscal 2022 and fiscal 2023. It continues to invest in technology and expand its e-commerce channel, which generates around 60% of its revenues. The company is improving its margin and operating leverage through Mission Critical productivity initiatives. It continues to expect $25 million in cost savings in fiscal 2022 and at least $100 million in total cost savings by the end of fiscal 2023.Melville, NY-based MSC Industrial distributes metalworking and maintenance, repair, and operations products and services in the United States, Canada, Mexico, and the U.K. The Zacks Consensus Estimate for MSM’s 2022 earnings has been revised upward by 6% in the past 60 days. The consensus mark indicates year-over-year growth of 26%. The company has a trailing four-quarter earnings surprise of 3.2%, on average. It currently carries a Zacks Rank #3.Price and Consensus: MSMScanSource: The company’s leadership position in large, niche markets along with sustained growth from innovative technology offerings across hardware, software, connectivity and cloud provide it with a competitive edge. The Specialty Technology Solutions segment has been benefiting from strong market demand, increases in big deals and market share gains. Digital acceleration and technology refresh initiatives with end-users are driving demand for the company’s channel partners. The Modern Communications & Cloud segment is gaining on the shift to cloud and subscriptions. The company has immense growth potential in both its segments. Its cost-control efforts will bolster margins. Its strategy to grow through acquisitions and alliances and enhance technology offerings and service capabilities is commendable.The Zacks Consensus Estimate for the ScanSource’s 2022 earnings has been revised upward by 15% in the past 60 days. The consensus mark indicates year-over-year growth of 46%. The Greenville, SC-based company, which distributes technology products and solutions, has a trailing four-quarter earnings surprise of 38.9%, on average. The company currently sports a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here. Price and Consensus: SCSC Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 W.W. Grainger, Inc. (GWW): Free Stock Analysis Report MSC Industrial Direct Company, Inc. (MSM): Free Stock Analysis Report ScanSource, Inc. (SCSC): Free Stock Analysis Report SiteOne Landscape Supply, Inc. (SITE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 21st, 2022

Here"s How Much You"d Have If You Invested $1000 in Enphase Energy a Decade Ago

Holding on to popular or trending stocks for the long-term can make your portfolio a winner. How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.What if you'd invested in Enphase Energy (ENPH) ten years ago? It may not have been easy to hold on to ENPH for all that time, but if you did, how much would your investment be worth today?Enphase Energy's Business In-DepthWith that in mind, let's take a look at Enphase Energy's main business drivers. Incorporated in 2006, Enphase Energy, Inc. is a global energy technology company that delivers energy management technology for the solar industry. It designs, develops, manufactures and sells home energy solutions, which connect energy generation, energy storage and control and communications management on one intelligent platform.Microinverters remain this California-based company’s legacy product. As of Dec 31, 2021, Enphase shipped more than 32 million microinverters. At present, more than 1.7 million Enphase residential and commercial systems have been deployed across 130 countries.The company’s IQ platform is the current generation integrated solar, storage and energy management offering, which enables self-consumption and delivers its core value proposition of yielding more energy, simplifying design and installation, and improving system uptime and reliability. The Enphase Home Energy Solution with IQ uses a single technology platform for seamless management of the whole solution, enabling rapid commissioning with the Installer Toolkit; consumption monitoring with our Envoy Communications Gateway with IQ Combiner+, Enphase Enlighten, a cloud-based energy management platform, and our Enphase AC Battery. It also produces the world’s only truly integrated solar-plus-storage solution. Markedly, the Enphase Home Energy Solution with IQ platform consists of Enphase microinverters, the AC Battery, an Envoy gateway and Enlighten cloud-based software.Currently, Enphase’s products cater to the residential and commercial markets of the United States, Canada, Mexico, Central America, Europe, Australia, New Zealand, India and certain other Asian markets. However, its largest market remains the United States. Over the last three years, revenues generated from the U.S. market have represented 69-80% of the company’s total revenues.Bottom LineAnyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Enphase Energy ten years ago, you're likely feeling pretty good about your investment today.According to our calculations, a $1000 investment made in June 2012 would be worth $27,169.12, or a gain of 2,616.91%, as of June 21, 2022, and this return excludes dividends but includes price increases.In comparison, the S&P 500 gained 171.07% and the price of gold went up 12.67% over the same time frame.Analysts are anticipating more upside for ENPH. Enphase Energy enjoys a strong position as a leading U.S. manufacturer of microinverters and fully integrated solar-plus-storage solutions. It is striving to expand in Europe steadily throughout 2022. Such expansion plans tend to boost its long-term growth in the battery storage market. The company has also been making acquisitions to boost its long-term growth, which should enable it to strategically grow its business and boost its revenues. It holds a strong solvency position. The stock has outperformed the industry in the past year. However, the shortage of semiconductors worldwide has been affecting the solar market. As a result, it is suffering from the supply-chain constraint, which may hurt its results to some extent. Also, a comparative analysis of its trailing 12-month EV/EBITDA ratio reflects a relatively gloomy picture. The stock is up 8.96% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 10 higher, for fiscal 2022. The consensus estimate has moved up as well. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 Enphase Energy, Inc. (ENPH): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 21st, 2022

3 Manufacturing Tools Stocks to Watch Amid Industry Challenges

The Zacks Manufacturing-Tools & Related Products industry witnesses pandemic-led supply-side challenges, inflationary pressures and a shortage of skilled workers. Backed by end-market strength, LECO, KMT and EPAC are worth a watch now. The Zacks Manufacturing-Tools & Related Products industry stands to benefit from growth in economic and manufacturing activities in the country. Also, improvement in trade activities throughout the world is boosting the prospects of the industry participants.However, supply-chain disruptions related to the availability of semiconductor chips are expected to adversely impact its performance in the quarters ahead. High labor and raw material costs, along with logistic issues, remain concerning as well. Three industry players that are worth watching in the industry at present are Lincoln Electric Holdings, Inc. LECO, Kennametal Inc. KMT and Enerpac Tool Group Corp. EPAC.About the IndustryThe Zacks Manufacturing-Tools & Related Products industry comprises companies that develop and distribute hand and mechanics tools, hydraulic tools, engineered fastening systems and heavy-lifting technology solutions. Arc-welding products, robotic-welding packages, fume-extraction equipment, oxy-fuel cutting equipment, plasma cutters, healthcare solutions, electronic security solutions and other products are also produced by some tool-makers. The highly advanced tools are used in industrial, commercial, oil & gas, mining, automotive and other industries. The providers of electronic security solutions cater to commercial, retailers, government, financial and healthcare markets. Regarding international operations, some industry players provide products and services to customers in North and South America, Japan, Europe, Canada, Asia and the Middle East.3 Trends Shaping the Future of the Manufacturing Tools IndustryFavorable Operating Environment: The industry has been benefiting from a consistent rise in manufacturing activities, supported by growth in domestic and export orders for industrial products. The ISM’s manufacturing index registered 56.1% in May 2022, indicating expansion of the U.S. manufacturing activity for the 24th month in a row. Also, the digitalization of business operations has enabled industry participants to boost their competitiveness with enhanced operational productivity, product quality and lower costs. A surge in the e-commerce business has proved beneficial for the companies.Prevalent Supply and Cost Concerns: The industry participants have been experiencing supply-chain disruptions and inflation in raw materials, which have been weighing on their margins and profitability. For Kennametal, issues related to the availability of semiconductor chips have limited growth opportunities in the transportation markets. Also, logistic problems and rising freight charges remain concerning for the players. The shortage of skilled workers in the United States has been a perennial concern as well for the industry participants.Persistent Woes: The fresh imposition of pandemic-related restrictions in some parts of the world, owing to the pandemic, has raised concerns for industry players as it might adversely impact their customers’ spending. The pandemic-led restrictions remain concerning for Enerpac Tool in the Americas/Europe region. Such issues might persist in the coming quarters as well. Innovation plays an important role in the industry. The industry participants often make steady investments to upgrade products and services to stay competitive in the market.  However, these frequent investments hurt the margins and profitability of the companies. Also, the industry players often rely on acquisitions to expand product portfolio, boost technological capabilities and extend geographical presence. Such actions often leave many companies with a highly leveraged balance sheet.Zacks Industry Rank Suggests Bleak ProspectsThe Manufacturing-Tools & Related Products industry is a six-stock group within the broader Zacks Industrial Products sector. The industry currently carries a Zacks Industry Rank #224, which places it in the bottom 11% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bleak 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.The industry’s positioning in the bottom 50% of the Zacks-ranked industries resulted from weak earnings prospects for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in the group’s earnings growth potential. The industry’s earnings estimates for 2022 have been decreased by 12.1% over the past year, while that for 2023 have been lowered by 10%.Before we discuss a few stocks in the industry, let’s take a look at the industry’s shareholder returns and current valuation.Industry Underperforms S&P 500 & SectorThe Zacks Manufacturing-Tools & Related Products industry has underperformed both the S&P 500 and the sector in the past year.While the industry players have collectively declined 38%, the sector has lost 22%, while the S&P 500 has fallen 12.2% in the said time frame.One-Year Price PerformanceManufacturing-Tools & Related Products Industry's ValuationThe P/E ratio is one of the commonly used methods for valuing manufacturing tools and related product stocks.The industry’s forward 12-month P/E ratio is 8.24. This clearly shows that the industry is trading below the S&P 500’s ratio of 15.95 and the sector’s 14.17.Over the past five years, the industry has traded at the highest level of 21.45X forward 12-month P/E and the lowest level of 8.24X. The median level over the same period was 15.28X.Industry’s P/E Ratio (Forward 12-Month) Versus S&P 500Industry’s P/E Ratio (Forward 12-Month) Versus Sector3 Manufacturing Tool Stocks Worth WatchingBelow we have discussed three stocks from the industry currently carrying either a Zacks Rank #2 (Buy) or #3 (Hold), which can be on investors’ watch list. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Lincoln Electric: The Cleveland, OH-based company makes welding and cutting products for use in several industries, including petrochemical, transportation and fabrication. It is likely to benefit from innovative product offerings, synergistic gains from buyouts, strengthening end markets and the use of digital platforms in the quarters ahead. However, supply-chain woes, raw material and labor cost inflation and the pandemic-led issues remain concerning.Shares of this a Zacks Rank #2 company have gained 3.4% in the past year. It delivered better-than-expected results in the last four quarters, with an average of 12.1%. In the past 60 days, LECO’s earnings estimates have moved up 10.9% for 2022.Price and Consensus: LECOKennametal: Based in Latrobe, PA, Kennametal Inc. is a manufacturer, marketer and distributor of high-speed metal cutting tools, tooling systems and wear-resistant parts. The company is likely to benefit from strong product offerings, innovation capabilities and a diversified business structure in the quarters ahead. However, supply-chain issues, commodity price inflation, currency issues and a hike in other costs are concerning.Shares of the Zacks Rank #3 company have lost 26.2% in the past year. It reported better-than-expected results thrice in the last four quarters, with an earnings surprise of 13.6%, on average. KMT’s earnings estimates have declined 4.5% for fiscal 2022 (ending June 2022) in the past 60 days.Price and Consensus: KMTEnerpac Tool: The company engages in the designing, manufacturing and distribution of various industrial tools, including high-pressure hydraulic tools and controlled force products. It is poised to benefit from strengthening end markets, its focus on rental and value-added services and product development initiatives in the quarters ahead. However, EPAC is exposed to headwinds from supply-chain restrictions, logistics issues and cost inflation.Shares of this Menomonee Falls, WI-based company have lost 23.9% in the past year. It delivered better-than-expected results twice and missed estimates twice in the last four quarters, with an average of 15%. In the past 60 days, the Zacks Rank #3 company’s earnings estimates have been stable for fiscal 2022 (ending August 2022).Price and Consensus: EPAC Special Report: The Top 5 IPOs for Your Portfolio Today, you have a chance to get in on the ground floor of one of the best investment opportunities of the year. As the world continues to benefit from an ever-evolving internet, a handful of innovative tech companies are on the brink of reaping immense rewards - and you can put yourself in a position to cash in. One is set to disrupt the online communication industry. Brilliantly designed for creating online communities, this stock is poised to explode when made public. With the strength of our economy and record amounts of cash flooding into IPOs, you don’t want to miss this opportunity.>>See Zacks’ Hottest IPOs NowWant 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 Lincoln Electric Holdings, Inc. (LECO): Free Stock Analysis Report Kennametal Inc. (KMT): Free Stock Analysis Report Enerpac Tool Group Corp. (EPAC): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksJun 16th, 2022

KBR to Acquire Digital Transformation Specialist VIMA Group

The VIMA Group buyout is set to aid KBR in bolstering digital offerings for various defense clients. KBR, Inc. KBR has agreed to acquire a UK-based digital transformation company — VIMA Group — for up to £75 million. This addition would strengthen KBR’s offerings in digital and information technology services for defense sector clients.Stuart Bradie, CEO and president of KBR, said, "This acquisition builds on our growing platform of high end, technically differentiated advisory, consulting, and transformation solutions in international markets."Buyout SynergiesVIMA Group offers solutions across a number of large-scale, high-priority digital transformation programs to support its clients, including defense and other public sector firms. It ensures the availability of effective digital and information technology as guided by UK's Digital Strategy for Defence.VIMA is a trusted advisor and one of the top-five suppliers to Defence Digital and Navy Digital – both organizations within the UK Ministry of Defence with a number of highly strategic, fast-growing programs.Meanwhile, KBR’s outlook for government business looks solid as the administration’s spending priorities remain focused on defense modernization, including military, intel, commercial, cyber, digital and intelligence space, with an emphasis on emerging technologies. This acquisition will help KBR bolster its inorganic growth and expand its market share.In sync with this inorganic strategy, KBR acquired a leading provider of high-end systems engineering, assurance and technology advisory services — Frazer-Nash — in October 2021. The addition of Frazer-Nash, which serves across the defense, renewable energy and critical infrastructure sectors primarily in the U.K. and Australia, will complement KBR's global priorities with minimal overlap because of its geographic footprint. Image Source: Zacks Investment ResearchComing to the share price performance, KBR’s shares have gained 18.7% over the past year against the Zacks Engineering - R and D Services industry’s 5.8% fall. KBR’s solid prospects are backed by continuous contract wins, strong project execution, backlog level and potential government and technology businesses.Zacks RankKBR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.3 Construction Stocks to Buy NowSome better-ranked stocks in the Construction sector include Simpson Manufacturing Co., Inc. SSD, Beazer Homes USA BZH and AECOM ACM.Simpson Manufacturing — currently carrying a Zacks Rank #1 — designs, engineers, manufactures and sells wood and concrete construction products.SSD’s expected earnings growth rate for 2022 is 18.1%. The Zacks Consensus Estimate for current-year earnings has improved 11.6% over the past 60 days.Beazer Homes — also sporting a Zacks Rank #1 — designs, builds and sells single-family homes. BZH designs homes that appeal primarily to entry-level and first move-up homebuyers. Beazer Homes USA’s objective is to provide customers with homes that have quality and value. BZH’s subsidiary, Beazer Mortgage, originates the mortgages for the company's homebuyers.Beazer Homes’ expected earnings growth rate for fiscal 2022 is 48.9%. The Zacks Consensus Estimate for current-year earnings has improved 14.6% over the past 60 days.AECOM — currently carrying a Zacks Rank #2 (Buy) — is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government and those in environmental, energy and water businesses.AECOM’s expected earnings growth rate for 2022 is 21.6%. Special Report: The Top 5 IPOs for Your Portfolio Today, you have a chance to get in on the ground floor of one of the best investment opportunities of the year. As the world continues to benefit from an ever-evolving internet, a handful of innovative tech companies are on the brink of reaping immense rewards - and you can put yourself in a position to cash in. One is set to disrupt the online communication industry. Brilliantly designed for creating online communities, this stock is poised to explode when made public. With the strength of our economy and record amounts of cash flooding into IPOs, you don’t want to miss this opportunity.>>See Zacks’ Hottest IPOs NowWant 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 AECOM (ACM): Free Stock Analysis Report KBR, Inc. (KBR): Free Stock Analysis Report Beazer Homes USA, Inc. (BZH): Free Stock Analysis Report Simpson Manufacturing Company, Inc. (SSD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 16th, 2022

Commercial Metals Company Reports Third Quarter Fiscal 2022 Results

Net earnings of $312.4 million, or $2.54 per diluted share, increased by 140% compared with $130.4 million, or $1.07 per diluted share, in the prior year period Core EBITDA of $483.9 million increased 110% year-on-year; a total of $1.4 billion of Core EBITDA achieved over the trailing 12 months Margins over scrap in North America and Europe reflect strong market conditions and favorable customer sentiment Continued strength in North America downstream pipeline, with record bid activity and backlog levels on both a volume and price basis Completed the acquisition of Tensar Corporation, creating a new, attractive strategic growth platform IRVING, Texas, June 16, 2022 /PRNewswire/ -- Commercial Metals Company (NYSE:CMC) today announced financial results for its fiscal third quarter ended May 31, 2022.  Net earnings were $312.4 million, or $2.54 per diluted share, on net sales of $2.5 billion, compared to prior year period net earnings of $130.4 million, or $1.07 per diluted share, on net sales of $1.8 billion. During the third quarter of fiscal 2022, the Company recorded net after-tax costs of $7.8 million related to the acquisition of Tensar Corporation and an asset impairment.  Excluding this expense, third quarter adjusted earnings were $320.2 million, or $2.61 per diluted share, compared to adjusted earnings of $127.1 million, or $1.04 per diluted share, in the prior year period.  "Adjusted EBITDA," "core EBITDA," "adjusted earnings" and "adjusted earnings per diluted share" are non-GAAP financial measures. Details, including a reconciliation of each such non-GAAP financial measure to the most directly comparable measure prepared and presented in accordance with GAAP, can be found in the financial tables that follow. Barbara R. Smith, Chairman of the Board, President and Chief Executive Officer, said, "The third quarter was another remarkable financial result for our Company, underpinned by strong operational execution and robust market conditions across our key geographies.  I am extremely proud of CMC's financial achievements during the quarter, especially in Europe.  CMC employees in Poland have opened their homes and communities in a heartfelt grassroots effort to assist refugees fleeing the war in Ukraine.  Amazingly, while responding to dire humanitarian needs, our team produced record quarterly adjusted EBITDA that nearly matched the best annual performance in the history of CMC's Europe segment." Ms. Smith continued, "In late April, we welcomed Tensar to the CMC organization.  Seeing the early results of the teams working together has only further reinforced our confidence in the strategic merits of this transaction and the potential for meaningful commercial synergies.  With the onboarding of Tensar, CMC has added a highly attractive new growth platform and is creating a valuable and unique portfolio of solutions for existing and new markets." The Company's balance sheet and liquidity position remained strong as of May 31, 2022.  Cash and cash equivalents ended the quarter with a balance of $410.3 million, following a $550 million payment, net of cash acquired, to complete the purchase of Tensar.  In addition, $624.3 million remained available under the Company's credit and accounts receivable facilities.  CMC repurchased approximately one million shares of common stock during the quarter, returning $38.6 million of cash to shareholders.  As of May 31, 2022, $294.4 million remained under the current share repurchase authorization. On June 15, 2022, the board of directors declared a quarterly dividend of $0.14 per share of CMC common stock payable to stockholders of record on June 29, 2022. The dividend to be paid on July 13, 2022, marks the 231st  consecutive quarterly payment by the Company, and represents a 17% increase from the dividend paid in July 2021.  Business Segments - Fiscal Third Quarter 2022 Review Demand for CMC's finished steel products in North America was again robust during the quarter, with several key internal and external indicators pointing toward continued strength.  Downstream bid volumes, a key indicator of the construction project pipeline, increased meaningfully from a year ago, resulting in the expansion of contract backlog levels.  Demand from industrial end markets continued to trend positively, with most end use applications increasing compared to the prior year period. The North America segment reported adjusted EBITDA of $379.4 million for the third quarter of fiscal 2022, an increase of 83% compared to $207.3 million in the prior year period.  This improvement was driven by record margins on sales of both steel products and raw materials.  Steel products have experienced five consecutive quarters of year-over-year margin expansion, while margins on raw material sales have grown for nine consecutive quarters.  Controllable costs per ton of finished steel shipped were unchanged in comparison to the second fiscal quarter, but were up from the prior year period primarily as a result of higher per unit purchase costs for freight, energy and alloys. Shipment volumes of finished steel, which include steel products and downstream products, followed typical seasonal patterns, and were essentially unchanged from the prior year period.  The average selling price for steel products increased by $316 per ton compared to the third quarter of fiscal 2021, while the cost of scrap utilized rose $103 per ton.  The result was a year-over-year increase of $213 per ton in margin over scrap.  The average selling price for downstream products increased by $281 per ton from the prior year period and $75 per ton on a sequential basis.  Future pricing indicators on new work entering the backlog remain positive, as average price levels for bids and new awards climbed significantly from the prior year period. The Europe segment reported record adjusted EBITDA of $121.0 million for the third quarter of fiscal 2022, up 142% compared to adjusted EBITDA of $50.0 million for the prior year quarter.  The improvement was driven by a significant expansion in both shipment volume and margin over scrap.  Similar to North America, underlying demand for steel products remained robust.  Volumes of rebar, merchant bar, and wire rod increased on a year-over-year basis, assisted by the addition of a third rolling line, which improved production flexibility and the mill's ability to capitalize on favorable market conditions.  During the first 12 months of operating the new rolling line, quarterly shipment volumes of finished products have increased 35% compared to the average of the preceding five years. As a result of continued strong demand and constrained supply in the wake of trade sanctions against Russia and Belarus, average selling price increased by $303 per ton compared to the prior year quarter, while the cost of scrap utilized rose $154 per ton.  The result was a year-over-year increase in margin over scrap of $149 per ton. The Company's new Tensar business generated EBITDA of $4.9 million during its first five weeks as part of CMC.  Excluding a $2.2 million charge to reflect purchasing accounting effect on inventory, EBITDA amounted to $7.1 million on net sales of $28.0 million.  EBITDA margin of 25.4% was consistent with Tensar's trailing five-year average.  Tensar's financial performance is included within CMC's existing operating segments, with North American results incorporated into CMC's North America segment and all other operations included in the Europe segment. Outlook Ms. Smith said, "We anticipate strong financial performance to continue in the fourth quarter.  Robust demand for each of CMC's major product lines is expected to persist, augmented by our growing downstream backlog and solid levels of new work entering the project pipeline.  Margins over scrap in both North America and Europe should remain at levels near those of the third quarter, driven by favorable market conditions across our geographies." Ms. Smith added, "Looking into CMC's fiscal 2023, we see several factors that should support continued strength in construction markets.  Firstly, as a result of the continued high levels of new bidding activity, we anticipate entering our new fiscal year with historically high levels of contract backlog.  In addition, new project bid levels should remain strong based on the benefits of rising activity related to the recently enacted federal infrastructure bill, non-residential construction activity supported by follow-on investment in the wake of historically high new residential community formation in our home markets, and from the continuation of reshoring trends that have already resulted in significant new projects.  The expected early calendar 2023 startup of our Arizona 2 micro mill will provide CMC with a greater flexibility to capitalize on these anticipated favorable demand conditions." Conference Call CMC invites you to listen to a live broadcast of its third quarter fiscal 2022 conference call today, Thursday, June 16, 2022, at 11:00 a.m. ET.  Barbara R. Smith, Chairman of the Board, President and Chief Executive Officer, and Paul Lawrence, Senior Vice President and Chief Financial Officer, will host the call. The call is accessible via our website at www.cmc.com. In the event you are unable to listen to the live broadcast, the call will be archived and available for replay on our website on the next business day. Financial and statistical information presented in the broadcast are located on CMC's website under "Investors." About Commercial Metals Company Commercial Metals Company and its subsidiaries manufacture, recycle and fabricate steel and metal products and provide related materials and services through a network of facilities that includes seven electric arc furnace ("EAF") mini mills, two EAF micro mills, one rerolling mill, steel fabrication and processing plants, construction-related product warehouses, and metal recycling facilities in the United States and Poland. Through its Tensar division, CMC is a leading global provider of innovative ground and soil stabilization solutions selling into more than 80 national markets through its two major product lines: Tensar® geogrids and Geopier® foundation systems. Forward-Looking Statements This news release contains forward-looking statements within the meaning of the federal securities laws with respect to general economic conditions, key macro-economic drivers that impact our business, the impact of the Russian invasion of Ukraine, the effects of ongoing trade actions, the effects of continued pressure on the liquidity of our customers, potential synergies and organic growth provided by acquisitions and strategic investments, demand for our products, metal margins, the effect of COVID-19 and related governmental and economic responses thereto, the ability to operate our steel mills at full capacity, future availability and cost of supplies of raw materials and energy for our operations, share repurchases, legal proceedings, the undistributed earnings of our non-U.S. subsidiaries, U.S. non-residential construction activity, international trade, capital expenditures, our liquidity and our ability to satisfy future liquidity requirements, estimated contractual obligations, the expected capabilities and benefits of new facilities, the timeline for execution of our growth plan, and our expectations or beliefs concerning future events. The statements in this release that are not historical statements, are forward-looking statements. These forward-looking statements can generally be identified by phrases such as we or our management "expects," "anticipates," "believes," "estimates," "future," "intends," "may," "plans to," "ought," "could," "will," "should," "likely," "appears," "projects," "forecasts," "outlook" or other similar words or phrases, as well as by discussions of strategy, plans, or intentions. Our forward-looking statements are based on management's expectations and beliefs as of the time this news release was prepared. Although we believe that our expectations are reasonable, we can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or any other changes. Important factors that could cause actual results to differ materially from our expectations include those described in our filings with the Securities and Exchange Commission, including, but not limited to, in Part I, Item 1A, "Risk Factors" of our annual report on Form 10-K for the fiscal year ended August 31, 2021, and Part II, Item IA, "Risk Factors" of our subsequent quarterly reports on Form 10-Q, as well as the following: changes in economic conditions which affect demand for our products or construction activity generally, and the impact of such changes on the highly cyclical steel industry; rapid and significant changes in the price of metals, potentially impairing our inventory values due to declines in commodity prices or reducing the profitability of our downstream contracts due to rising commodity pricing; impacts from COVID-19 on the economy, demand for our products, global supply chain and on our operations, including the responses of governmental authorities to contain COVID-19 and the impact of various COVID-19 vaccines; excess capacity in our industry, particularly in China, and product availability from competing steel mills and other steel suppliers including import quantities and pricing; the impact of the Russian invasion of Ukraine on the global economy, energy supplies and raw materials, which is uncertain, but may prove to negatively impact our business and operations; compliance with and changes in existing and future laws, regulations and other legal requirements and judicial decisions that govern our business, including increased environmental regulations associated with climate change and greenhouse gas emissions; involvement in various environmental matters that may result in fines, penalties or judgments; evolving remediation technology, changing regulations, possible third-party contributions, the inherent uncertainties of the estimation process and other factors that may impact amounts accrued for environmental liabilities; potential limitations in our or our customers' abilities to access credit and non-compliance of their contractual obligations, including payment obligations; activity in repurchasing shares of our common stock under our repurchase program; financial covenants and restrictions on the operation of our business contained in agreements governing our debt; our ability to successfully identify, consummate and integrate acquisitions, and the effects that acquisitions may have on our financial leverage; risks associated with acquisitions generally, such as the inability to obtain, or delays in obtaining, required approvals under applicable antitrust legislation and other regulatory and third party consents and approvals; operating and startup risks, as well as market risks associated with the commissioning of new projects could prevent us from realizing anticipated benefits and could result in a loss of all or a substantial part of our investments; lower than expected future levels of revenues and higher than expected future costs; failure or inability to implement growth strategies in a timely manner; impact of goodwill impairment charges; impact of long-lived asset impairment charges; currency fluctuations; global factors, such as trade measures, military conflicts and political uncertainties, including changes to current trade regulations, such as Section 232 trade tariffs and quotas, tax legislation and other regulations which might adversely impact our business; availability and pricing of electricity, electrodes and natural gas for mill operations; ability to hire and retain key executives and other employees; competition from other materials or from competitors that have a lower cost structure or access to greater financial resources; information technology interruptions and breaches in security; ability to make necessary capital expenditures; availability and pricing of raw materials and other items over which we exert little influence, including scrap metal, energy and insurance; unexpected equipment failures; losses or limited potential gains due to hedging transactions; litigation claims and settlements, court decisions, regulatory rulings and legal compliance risks; risk of injury or death to employees, customers or other visitors to our operations; and civil unrest, protests and riots.   COMMERCIAL METALS COMPANY FINANCIAL & OPERATING STATISTICS (UNAUDITED) Three Months Ended Nine Months Ended (in thousands, except per ton amounts) 5/31/2022 2/28/2022 11/30/2021 8/31/2021 5/31/2021 5/31/2022 5/31/2021 North America Net sales $  2,033,150 $  1,614,224 $  1,653,622 $  1,660,409 $  1,558,068 $  5,300,996 $  4,010,567 Adjusted EBITDA 379,355 535,463 268,524 212,018 207,330 1,183,342 534,576 External tons shipped Raw materials 353 329 334 331 368 1,016 1,000 Rebar 505 407 442 469 500 1,354 1,458 Merchant and other 274 245 257 302 289 776 821 Steel products 779 652 699 771 789 2,130 2,279 Downstream products 399 327 400 415 408 1,126 1,122 Average selling price per ton Raw materials $       1,207 $       1,103 $       1,034 $       1,069 $           949 $       1,116 $           813 Steel products 1,110 1,041 976 900 794 1,045 702 Downstream products 1,244 1,169 1,092 1,014 963 1,168 943 Cost of raw materials per ton $           908 $           834 $           766 $           805 $           697 $           837 $           597 Cost of ferrous scrap utilized per ton $           472 $           436 $           428 $           434 $           369 $           446 $           327 Steel products metal margin per ton $           638 $           605 $           548 $           466 $           425 $           599.....»»

Category: earningsSource: benzingaJun 16th, 2022

Oceaneering (OII) to Partner With Collins for NASA Project

Oceaneering International (OII) to team up with Collins Aerospace and ILC Dover for the development of high-technology spacesuits for NASA. The Houston, TX-based subsea engineering and applied technology company, Oceaneering International OII, recently declared that Oceaneering Space Systems, which is a division of its Aerospace and Defense Technologies segment, would be part of a team led by one of the world's largest suppliers of aerospace and defense products — Collins Aerospace — selected by National Aeronautics and Space Administration (“NASA”) to develop next-generation extravehicular spacesuits.NASA is looking at its commercial partners for the development and maintenance of the new spacesuit technology. The group selected by NASA, which also includes the engineering development and manufacturing company – ILC Dover, has vast experience in supplying spacesuits to the space body. Moreover, Collins is only one of the two firms to have won a NASA contract for Extravehicular Activity Services of around $3.5 billion over 12 years to provide spacesuits for upcoming missions.The spacesuits, which the firms develop, will be owned by them and rented out to NASA for missions and at the same time, they will also be able to offer the suits to other customers.The new suits being developed will require next-gen technology and will be used for missions starting in 2025 and through 2034. Further, they will provide better mobility and weigh considerably less than the ones currently in use. The suits will also cater to almost every astronaut’s body type and augment mission times by rapidly incorporating new technologies.Rod Larson, the President and Chief Executive Officer at Oceaneering, mentioned that his firm is thrilled to work with Collins and ILC Dover on this project and that this contract builds on Oceaneering’s venerable relationships with Collins, ILC Dover and NASA and its know-how in prior spacesuit programs. Larson added that OII has assisted in successful space missions for NASA, along with industry partners, over the last 40 years by delivering thousands of products and other mission support.Founded in 1964, Oceaneering International, Inc. is one of the leading suppliers of offshore equipment and technology solutions to the energy industry. The company provides specialized products and services for all the phases of the offshore oilfield lifecycle — from exploration to decommissioning — with a focus on deep water.Oceaneering currently has a Zacks Rank #3 (Hold). Those interested in the energy sector might want to look at some better-ranked stocks. Oasis Petroleum OAS, Marathon Petroleum MPC and Comstock Resources CRK each sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Oasis Petroleum’s stock has increased 87.2% in a year. Oasis Petroleum beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being around 19.6%.The Zacks Consensus Estimate for OAS’ 2022 earnings is projected at $36.11 per share, up about 279.3% from the projected year-ago earnings of $9.52.Marathon Petroleum is valued at around 55.27 billion. Marathon Petroleum beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 65%.The Zacks Consensus Estimate for MPC’s 2022 earnings is projected at $13.72 per share, up approximately 460% from the projected year-ago earnings of $2.45.Comstock’s stock price has increased 184% in a year. The Zacks Consensus Estimate for Comstock’s 2022 earnings has been revised about 43% upward over the past 60 days from $2.51 per share to $3.59.The Zacks Consensus Estimate for CRK’s 2022 earnings is pegged at $3.59 per share, up 209.5% from the projected year-ago earnings of $1.16. How to Profit from the Hot Electric Vehicle Industry Global electric car sales in 2021 more than doubled their 2020 numbers. And today, the electric vehicle (EV) technology and very nature of the business is changing quickly. The next push for future technologies is happening now and investors who get in early could see exceptional profits. See Zacks' Top Stocks to Profit from the EV Revolution >>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 Comstock Resources, Inc. (CRK): Free Stock Analysis Report Oceaneering International, Inc. (OII): Free Stock Analysis Report Marathon Petroleum Corporation (MPC): Free Stock Analysis Report Oasis Petroleum Inc. (OAS): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksJun 14th, 2022

ReneSola (SOL) Wins Contracts for Two Solar Projects in US

ReneSola (SOL) announces that it has been awarded REC contracts involving two of its solar projects in New York and Illinois, respectively, enabling it to capitalize on the growing solar market of the regions. ReneSola Ltd SOL recently announced that it has earned 20-year Index Renewable Energy Credit (“REC”) contracts involving two of its solar projects in New York and Illinois, respectively. This, in turn, further strengthens ReneSola’s presence in the United States and enables the company to capitalize on the growing solar market of the two regions to curtail climate crisis effects.Details of the ContractOn Jun 2, 2022, SOL’s 22-megawatt (MW) Roosevelt solar project in Massena, NY was picked by the New York State Energy Research and Development Authority as part of its endeavor to achieve 70% renewable-based energy by 2030 and zero emissions by 2040. Also, this project is one of the 22 projects that New York seeks to add to achieve its ambitious renewable target.Meanwhile, on May 12, 2022, ReneSola’s 20 MW utility-scale solar project in Wilmington, IL was awarded a 20-year Index REC contract as Illinois aims to double its investment in renewable energy to reach 40% renewable-based energy by 2030 and 50% by 2040.Such contract wins are likely to enhance ReneSola’s footprint in the U.S. solar market and assist the company in duly meeting its 3 gigawatts (GW) of a mid-to-late-stage pipeline target by end of 2022 and 5 GW by 2024.U.S. Solar OutlookSolar capacity additions in the United States are likely to go up by leaps and bounds due to the Biden-led government’s increased focus on making the environment carbon free and reducing dependence on fossil fuels.  In this context, per the latest short-term energy outlook report from the U.S. Energy Information Administration, solar capacity additions to the electric power sector will be 20 GW for 2022 and 22 GW for 2023, while the small-scale solar capacity is expected to grow to 39 GW by the end of 2022 and 46 GW in 2023.Against this backdrop, we may safely conclude that the underlying strength in the U.S. solar market is likely to benefit major solar companies operating in the region. To this end, SOL and other solar companies that can enjoy the perks of the expanding U.S. solar market are:Enphase Energy ENPH: It enjoys a strong position in the global solar space as a leading U.S. manufacturer of microinverters and fully integrated solar-plus-storage solutions. In the fourth quarter of 2021, Enphase Energy introduced its IQ8 family of microinverters to residential installers in North America and expects to introduce the same internationally in the second half of 2022.The Zacks Consensus Estimate for Enphase Energy’s 2022 sales implies a growth rate of 49.9% from the prior-year reported figure. ENPH shares have returned 22.8% in the past year.Canadian SolarCSIQ: It has a strong pipeline of projects and carries out various acquisitions and strategies to further consolidate its position. In May 2022, Canadian Solar completed the construction of a 100 MW renewable solar power plant near Ruleville in the Mississippi Delta. The Sunflower Solar Station is the largest solar installation in Mississippi and provides enough energy to power 16,000 homes.The Zacks Consensus Estimate for Canadian Solar’s 2022 sales indicates an improvement of 41.2% from the prior-year reported figure. CSIQ shares have returned 25.8% in the past month.First Solar FSLR currently operates many of the world’s largest grid-connected photovoltaic (PV) power plants. In May 2022, First Solar signed an agreement with Scout Clean Energy, a renewable energy developer and owner-operator headquartered in Boulder, CO, to supply 378 MW DC of advanced, responsibly produced thin-film PV solar modules.First Solar’s long-term earnings growth rate is pegged at 13.2%. Shares of FSLR have rallied 0.6% in the past month.Price MovementIn the past month, shares of ReneSola have rallied 10.1% compared with the industry’s rise of 27.6%.Image Source: Zacks Investment ResearchZacks RankReneSola currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. How to Profit from the Hot Electric Vehicle Industry Global electric car sales in 2021 more than doubled their 2020 numbers. And today, the electric vehicle (EV) technology and very nature of the business is changing quickly. The next push for future technologies is happening now and investors who get in early could see exceptional profits. See Zacks' Top Stocks to Profit from the EV Revolution >>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 Renesola Ltd. (SOL): Free Stock Analysis Report First Solar, Inc. (FSLR): Free Stock Analysis Report Canadian Solar Inc. (CSIQ): Free Stock Analysis Report Enphase Energy, Inc. (ENPH): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 14th, 2022