Thursday, May 4, 2023

Earnings Roundup - Q1 2023

We'll go into more detail on some of these later, but posting some highlights:

  • Lamar Advertising Company (LAMR): "Adjusted EBITDA for the first quarter of 2023 was $198.0 million versus $191.2 million for the first quarter of 2022, an increase of 3.5%. Cash flow provided by operating activities was $108.7 million for the three months ended March 31, 2023 versus $102.0 million for the first quarter of 2022, an increase of $6.7 million."
  • Canadian Natural Resources Limited (CNQ): "In Q1/23, we generated approximately $1.9 billion in adjusted net earnings and approximately $3.4 billion in adjusted funds flow, resulting in significant free cash flow of approximately $1.4 billion after dividends and base capital expenditures. Year-to-date, we have returned approximately $2.8 billion to shareholders through dividends and share repurchases, up to and including May 3, 2023. Our commitment to increasing shareholder returns is evident in our sustainable and growing quarterly dividend, which was recently increased to $0.90 per share in March 2023, up from $0.85 per share, marking 2023 as the 23rd consecutive year of dividend increases. The increasing dividend and the Company's commitment to return 100% of free cash flow to shareholders, when net debt reaches $10 billion, demonstrates the confidence the Board of Directors has in the Company's world class assets and its ability to generate significant and sustainable free cash flow throughout the commodity price cycle."
  • North American Helium Inc. (private): "Including volumes from this latest facility, current helium production is in excess of 130 million cubic feet per year, representing approximately 5% of total helium supply in North America. This does not include another plant we plan to bring online in Q4 of this year. With the addition of the second rig to our drilling program, we expect to drill approximately 30 wells this year to support additional growth in 2024."
  • Natural Resource Partners L.P. (NRP): "NRP's strong performance continued in the first quarter of 2023 driven by robust prices for metallurgical coal and soda ash," said Craig Nunez, NRP's president and chief operating officer. "In addition to generating $73 million of free cash flow, we redeemed $47.5 million of preferred units at par with cash and permanently retired $16.7 million of Opco Senior Notes. We will continue to aggressively pay off debt and preferred equity with internally generated cash while maintaining distributions to our common unitholders."
  • Texas Pacific Land Corporation (TPL): "Our share of production remained relatively consistent at 20.9 thousand Boe per day for the first quarter of 2023 compared to 20.8 thousand Boe per day for the same period of 2022. The decrease in oil and gas royalty revenue was partially offset by an increase of $5.8 million in easements and other surface-related income and a combined increase of $8.2 million in produced water royalties and water sales. Our revenue streams are directly impacted by commodity prices and development and operating decisions made by our customers and vary as the pace of development and oil demand varies. Our total operating expenses of $41.4 million for the first quarter of 2023 increased $18.4 million compared to the same period of 2022. The increase in operating expenses is principally related to an increase in legal and professional fees during the first quarter of 2023 compared to the same period of 2022."
  • AB InBev SA (BUD): "United States: Continued top-line growth with stable EBITDA despite the elevated cost environment. Operating performance: Revenue grew by 4.0% with revenue per hl increasing by 5.6%, driven by revenue management initiatives and continued premiumization. Sales-to-wholesalers (STWs) were down by 1.6% and sales-to-retailers (STRs) declined by 3.0%, estimated to be below the industry. EBITDA was flat."
  • Magellan Midstream Partners LP (MMP): "Magellan is increasing our annual DCF guidance by $40 million to $1.22 billion for 2023 to reflect higher-than-expected performance during first quarter and our latest outlook for refined products transportation rates. While management continues to evaluate upcoming mid-year changes to our tariffs, we currently expect to increase our refined products rates by an all-in average of approximately 11% on July 1, 2023, based on our recent market analyses."
  • Royal Gold, Inc. (RGLD): "First Quarter 2023 Highlights: Robust financial results with revenue of $170.4 million and operating cash flow of $108.7 million, up 5% and 7% compared to the prior year period. Revenue split: 71% gold, 14% copper, 12% silver. Production volume of 90,200 GEOs2, 4% higher than the prior year period. Repaid $75 million of debt, reducing total debt to $500 million and increasing total available liquidity to $634 million. Maintained adjusted EBITDA margin of 79%. Paid quarterly dividend of $0.375 per share, a 7% increase over the prior year period."
  • Marathon Oil Corporation (MRO): "Marathon Oil's percentage of CFO framework provides clear visibility to significant return of capital to equity investors, ensuring the shareholder gets the first call on cash flow generation and protecting shareholder distributions from capital inflation. In a $60/bbl WTI or higher price environment, the Company targets returning a minimum of 40% of CFO to equity investors. The Company remains on track to meet or exceed this minimum objective in 2023. During first quarter, Marathon Oil returned 42% of adjusted CFO to equity investors, exceeding its minimum commitment. First quarter return of capital totaled $397 million, including $334 million of share repurchases and the $63 million base dividend."
  • Ford Motor Company (F): "Ford is maintaining the full-year 2023 performance expectations that the company first articulated in early February: for adjusted EBIT of $9 billion to $11 billion and adjusted free cash flow of about $6 billion.Additionally, the company reaffirmed 2023 segment-level EBIT expectations: about $7 billion for Ford Blue, up modestly from last year; a full-year loss of about $3 billion for Ford Model e; and EBIT approaching $6 billion for Ford Pro, which would be nearly twice its 2022 earnings."
  • Marathon Petroleum Corporation (MPC): "So I'll give you some numbers in terms of what Q1 look like relative to Q1 of 2022. So on the gasoline front, our book of business is just described was up 4.7%. The EIA call on demand on Q1 was about 1.7%. On the West Coast, despite some historically heavy rainfall and flood events, we're actually flat year on year, which bodes for some optimism as we trend into the summer in the West Coast. On the distillate side, we are off about 1.2% in the first quarter. EIA call on demand was down about 7%, but we believe that's heavily weighted with some sluggish home heat demand due to the warmer weather temperatures this past winter in the Northeast. On the West Coast, often asked in terms of distillate, we were actually up 1.4% year on year again despite those weather events. And on the jet fuel side of the business, we saw a 6% rise in demand in the quarter, which comps to about 5% from the EIA perspective."
  • Philips 66 (PSX): "Phillips 66 generated $1.2 billion in cash from operations in the first quarter of 2023. Excluding working capital impacts, operating cash flow was $2.5 billion. During the first quarter, Phillips 66 funded $800 million of share repurchases, $486 million in dividends and $378 million of capital expenditures and investments."
  • Starbucks Corporation (SBUX): "North America comparable store sales increased 12%, driven by a 6% increase in comparable transactions and a 5% increase in average ticket; U.S. comparable store sales increased 12%, driven by a 6% increase in comparable transactions and a 6% increase in average ticket."
  • Avis Budget Group, Inc. (CAR):“Our first quarter demand was strong, with our international inbound and commercial customers continuing their improved growth. This culminated with the most rental transactions in our first quarter history,” said Joe Ferraro, Avis Budget Group Chief Executive Officer.
  • Valero Energy Corp. (VLO): "Refining throughput volumes in the first quarter of 2023 averaged 2.9 million barrels per day, which was 130,000 barrels per day higher than the first quarter of 2022. Throughput capacity utilization was 93% in the first quarter of 2023 compared to 89% in the first quarter of 2022. [...] So, so far, our 7-day average in our wholesale system, our gasoline sales are up 16% year-over-year. Our diesel volumes are up 25% year-over-year. So our wholesale team continues to do a great job. In March, we set a record at 998,000 barrels a day. In April, the volumes are trending right along those levels. So demand seems very, very strong in our system. And even the DTN data for the wholesale racks across the industry is very strong as well. In terms of your question on diesel weakness, we're just not seeing it. I can tell you, in addition to the wholesale volumes, today, there's domestic arbs that are open from PADD 3 into PADD 2 as we're seeing a surge in agricultural demand that's going along with planting season. You also have a domestic arb open to ship from PADD 3 to PADD 1. We see strong waterborne premiums to go to Latin America. The transatlantic arb is open to Europe. And so for us, distillate fundamentals look pretty good. [...] So our wholesale on the gasoline side, we're up 16% year-over-year. On distillate, we're up 25% year-over-year. March, we set a sales volume record 998,000 barrels a day. And then April, the volumes are trending about like they did in March. [...] So we've come into driving season with 10 million barrels below where we were last year on gasoline inventory. So especially summer grade gasoline is very tight, and it is going to stress the Colonial system as we move into driving season."
  • Sprouts Farmers Market, Inc. (SFM): "We are pleased with our first quarter; we believe our long-term growth strategy is gaining traction and driving positive performance," said Jack Sinclair, chief executive officer of Sprouts Farmers Market. "Our results included comparable store sales growth of 3.1%, total sales growth of 6 percent, and adjusted diluted earnings per share growth of 24 percent."
  • Franco Nevada (FNV): "Our diversified portfolio continues to generate strong cash flows and high margins. The first quarter was impacted by production disruptions at Cobre Panama and Antapaccay as well as lower energy prices. Stronger precious metal deliveries are anticipated in Q2 with both assets having returned to normal operations. "Cobre Panama's CP 100 Expansion is on-track for year-end and we look forward to initial contributions from Magino, Séguéla and Salares Norte during the year", commented Paul Brink, CEO. Franco-Nevada is debt-free, is growing its cash balances and has a strong pipeline of growth opportunities."
  • Novo Nordisk (NVO): "Operating profit increased by 31% in Danish kroner and by 28% at constant exchange rates (CER) to DKK 25.0 billion. Sales in North America Operations increased by 47% in Danish kroner (41% at CER). Wholesaler inventory movements in the US positively impacted sales growth. Sales in International Operations increased by 9% in Danish kroner (10% at CER)."
  • Murphy USA Inc. (MUSA): "Total retail gallons increased 4.9% in Q1 2023 compared to Q1 2022, while volumes on a same store sales ("SSS") basis increased 1.4%. Merchandise contribution dollars for Q1 2023 increased 6.5% to $187.1 million on average unit margins of 19.4%, compared to the prior-year quarter contribution dollars of $175.7 million on unit margins of 19.7%. During Q1 2023, the Company repurchased approximately 48.8 thousand common shares for $13.7 million at an average price of $279.67 per share. 
  • ConocoPhillips (COP): "Delivered record company and Lower 48 production of 1,792 thousand barrels of oil equivalent per day (MBOED) and 1,036 MBOED, respectively. Distributed $3.2 billion to shareholders through a three-tier return of capital framework, including $1.7 billion through share repurchases and $1.5 billion through the ordinary dividend and VROC. Generated cash provided by operating activities of $5.4 billion and cash from operations (CFO) of $5.7 billion."
  • United States Steel Corporation (X): "EVs cannot run without the kind of ultra-thin electrical steel that will be soon rolling off the line at Big River Steel to the tune of about 200,000 tons a year. The launch of our new electrical steel, InduX, further strengthens our partnership with strategic customers; in this case, the growing numbers of manufacturers of EVs. InduX will also serve the booming market for green power generation. This specialized steel is in high demand from our customer base. In fact, we've already pre-sold our first coil of electrical steel from Big River. It seems like not a day goes by that a customer isn't reaching out inquiring about reserving time on the new line. The bottom line is steel has not only been essential to human society since the Bronze Age, it is essential to our green energy future. And U.S. Steel is the essential partner in making that transition happen. We are veterans of electrical steel, with current production already in Europe."


CP said...

The Company posted quarterly revenue of $94.8 billion, down 3 percent year over year, and quarterly earnings per diluted share of $1.52, unchanged year over year. “We are pleased to report an all-time record in Services and a March quarter record for iPhone despite the challenging macroeconomic environment, and to have our installed base of active devices reach an all-time high,” said Tim Cook, Apple’s CEO. “We continue to invest for the long term and lead with our values, including making major progress toward building carbon neutral products and supply chains by 2030.” “Our year-over-year business performance improved compared to the December quarter, and we generated strong operating cash flow of $28.6 billion while returning over $23 billion to shareholders during the quarter,” said Luca Maestri, Apple’s CFO.

CP said...

Suncor delivered adjusted funds from operations of $3.002 billion ($2.26 per common share) in the first quarter of 2023, compared to $4.094 billion ($2.86 per common share) in the prior year quarter, and returned approximately $1.6 billion of value to shareholders through $874 million in share repurchases and the payment of $690 million of dividends.

During the first quarter of 2023, the company completed the sale of its wind and solar assets for gross proceeds of $730 million, and the acquisition of an additional 14.65% working interest in Fort Hills for $712 million. Also during the first quarter of 2023, the company reached an agreement for the sale of its U.K. E&P portfolio for gross proceeds of approximately $1.2 billion, including a contingent consideration of approximately $338 million, before closing adjustments and other closing costs. The sale is pending regulatory approval and is expected to close in the second quarter of 2023.

Subsequent to the first quarter of 2023, Suncor entered into an agreement to purchase TotalEnergies' Canadian operations through the acquisition of TotalEnergies EP Canada Ltd. (TotalEnergies Canada), which holds a 31.23% working interest in Fort Hills, a 50% working interest in the Surmont in situ asset (Surmont), as well as certain other associated assets. The acquisition is for cash consideration of $5.5 billion, before closing adjustments and other closing costs, with the potential for additional payments of up to an aggregate maximum of $600 million. The transaction will have an effective date of April 1, 2023, and is anticipated to close in the third quarter of 2023, subject to pre-emptive rights, regulatory approval and other closing conditions.

The company intends to fund the acquisition primarily through debt issuances. As a result, the company plans to maintain its current capital allocation levels, allocating excess funds equally towards debt repayment and share buybacks. Should the acquisition close as contemplated, Suncor's Board of Directors currently intends to increase the quarterly dividend by approximately 10% following transaction close.

CP said...

Vertex reported first quarter 2023 net income of $53.8 million, or $0.71 per basic share, versus a net loss attributable to common shareholders of $4.9 million, or $0.08 loss per basic share for the first quarter 2022. Adjusted EBITDA (see “Non-GAAP Financial Measures”, below) was $34.9 million for the first quarter 2023 compared to Adjusted EBITDA of $13.0 million in the prior-year period. Financial results for the first quarter 2023 include an after-tax, $48.9 million gain on the sale of the Company’s Heartland assets during the quarter. Schedules reconciling the Company’s GAAP and non-GAAP financial results, including Adjusted EBITDA are included later in this release (see also “Non-GAAP Financial Measures”, below).

CP said...

Scorpio Tankers Inc. Announces Financial Results for the First Quarter of 2023 and an Increase to its Quarterly Dividend

CP said...

OTC Markets (OTCM)

Gross revenues of $28.0 million for the quarter, up 8% versus the prior year period

Operating income of $6.9 million for the quarter, down 20% versus the prior year period

Operating profit margin of 25.4%, versus 34.4% for the prior year period

Net income of $6.3 million, down 17% versus the prior year period, and quarterly diluted GAAP EPS of $0.52, down 16%

Total cash returned to shareholders during the quarter of $5.5 million, comprised of dividends of $2.1 million and repurchases of common stock of $3.4 million

CP said...

*Consolidated net sales increased 8.9% in the quarter to $5.44 billion
*Diluted net income per share increased 30.5% to $1.84 per share in the quarter compared to $1.41 per share in the first quarter 2022
*Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) increased 26.7% to $878.2 million in the quarter

CP said...

Occidental Announces 1st Quarter 2023 Results
*Strong operational performance drove cash flow from operations of $2.9 billion and cash flow from
operations before working capital of $3.2 billion
*Capital spending of $1.5 billion, resulting in quarterly free cash flow before working capital of $1.7 billion
*Production of 1,220 Mboed exceeded the mid-point of guidance by 40 Mboed; full-year production
guidance raised to 1,195 Mboed
*Repurchased $752 million of common stock, accounting for over 25% of the $3.0 billion repurchase program
*Triggered the redemption of $647 million of preferred stock, initiating the next phase of
shareholder return framework

CP said...

Chris Conoscenti, Chief Executive Officer of Sitio, commented, "Producer activity on our assets continues to be steady, with average production of 34,440 Boe/d in the first quarter, which is in-line with Sitio’s pro forma production of 34,424 Boe/d in the fourth quarter of 2022. We evaluated approximately 50,000 net royalty acres for acquisition in the first quarter of 2023, but we did not find any opportunities that met our returns criteria. This was the first quarter in over two years that we haven't announced or closed an acquisition. Instead, we focused on strengthening the balance sheet by reducing long-term debt by approximately $34 million and continuing to improve our internal efficiencies."