Connect with us

Published

on

In this photo illustration, a Coterra Energy Inc. logo is seen on a smartphone screen.

Pavlo Gonchar | SOPA Images | LightRocket | Getty Images

Coterra Energy‘s (CTRA) solid third-quarter earnings beat on Thursday, along with hefty free cash flow and a raised dividend, solidified the Club’s investment case in the oil-and-gas producer.

  • Total revenue soared by nearly 500% year-on-year, to $2.52 billion, exceeding analysts’ estimates of $2.37 billion, according to Refinitiv.
  • Adjusted earnings per share more than doubled on an annual basis, to $1.42 a share, beating analysts’ forecasts of $1.37 a share.

Note: Coterra management is set to hold its post-earnings conference call at 10 a.m. ET Friday, which we’ll monitor for any updates.

Bottom line

Coterra continued to return an outsized amount of free cash flow to shareholders: 74% in the third quarter, to be exact.

While we’ve worked to moderate our energy exposure in recent months, our two-pronged investment rationale has not changed: 1) Hedge our portfolio against inflation as oil-and-gas prices stay higher for longer and 2) get rewarded for our patience through robust dividend payouts and stock buybacks, which are made possible by those same elevated commodity prices.

Coterra hiked its fixed-plus-variable dividend payout on a sequential basis, supporting the second part of our investment thesis. The company was the only one of our three exploration-and-production holdings to do so this earnings season. Pioneer Natural Resources (PXD) and Devon Energy (DVN), by contrast, announced quarter-over-quarter declines to their payouts, due to falling oil prices in the third quarter.

But Coterra’s larger natural gas exposure — a key reason we initiated our position in April — proved advantageous in the three months ended Sept. 30. U.S. natural gas prices bottomed out in early summer, before increasing for nearly two months in a row and then falling again more recently.

U.S. natural gas futures closed at $6.33 per million British thermal units on Thursday, while West Texas Intermediate crude — the U.S. oil benchmark — settled at $88.17 a barrel. Coterra’s stock was trading down nearly 2% in afterhours trading Thursday, at roughly $30 a share, as the market digested its third-quarter report.

Cash flow

Cash flow is king for companies like Coterra. Here’s how the Houston-based company did in the third quarter.

  • Cash flow from operations expanded by more than 600% year-over-year, to $1.77 billion, roughly in line with analysts forecasts of 1.76 billion, according to FactSet.
  • Adjusted discretionary cash flow (cash flow from operations excluding changes in assets and liabilities) was $1.52 billion, below estimates of $1.62 billion.
  • Free cash flow, or money the business generates subtracting capital expenditures, was $1.06 billion, short of analysts’ forecasts of $1.16 billion.
  • Capital expenditures of $460 million came in above the $450 million predicted by analysts.

Based on recent commodity strip prices, Coterra management expects free cash flow for the full year to be $3.9 billion, compared with the FactSet estimate of $3.83 billion.

Coterra also said its full-year capital budget is projected to be $1.7 billion, matching the high end of its prior guidance range of $1.6 billion to $1.7 billion.

Dividends and buybacks

Coterra said it would pay out a fixed-plus-variable dividend of 68 cents a share, up from its prior 60 cents a share quarter-on-quarter. Based on Coterra’s Thursday closing price of $30.61, that equates to a roughly 8.9% annualized dividend yield. Half of the company’s third-quarter free cash flow is going toward the dividend, as was the case with second-quarter free cash flow.

The company spent $253 million in the third quarter to repurchase 9.3 million shares at an average price of $27.03 a share. That’s equal to about 24% of free cash flow. In the second quarter, 30% of Coterra’s free cash flow went toward stock buybacks, totaling $303 million. As of Sept. 30, the company has $510 million remaining on its $1.25 billion buyback authorization.

Production and Q4 outlook

Total production in the quarter was 641,000 barrels of oil equivalent per day, above the 610,000 to 630,000 barrel-a-day guidance the company issued in August and above analysts’ forecasts for production of 624,100 barrels a day. Coterra attributed its total production levels to “strong well performance and improving cycle times.”

Here’s the breakdown of Coterra’s production in the third quarter:

  • Oil: 87,900 barrels a day, ahead of a consensus forecast of 86,700 barrels a day.
  • Natural gas: 2.8 billion cubic feet a day, slightly exceeding analysts’ forecasts of 2.77 billion cubic feet a day.

For the fourth quarter, Coterra expects total production to be between 615,000 and 635,000 barrels of oil equivalent a day, which at the midpoint is lower than the 632,900 barrels a day forecasted by analysts. The company also forecasts oil volumes to average between 86,000- to 89,000 barrels a day, roughly in line with estimates for 87,200 barrels a day. Natural gas volumes should average between 2.72 billion- and 2.78 billion cubic feet a day, below the 2.8 billion cubic feet a day predicted by analysts.

For the full year, Coterra raised its total production guidance by 1% at the midpoint, saying it now should be between 625,000- to 640,000 barrels of oil equivalent a day. At the midpoint that exceeds estimates for 630,000 barrels a day. At the same time, the company raised its forecast for natural gas production for the full year to between 2.76 billion- to 2.85 billion cubic feet a day, also up 1% at the midpoint. That compares with analysts’ forecasts of 2.8 billion cubic feet a day.

Coterra’s realized prices, excluding commodity derivatives, in the third quarter were $93.35 per barrel of oil, better than the $92.7 per barrel analysts expected, and $6.37 per thousand cubic feet of natural gas, below the $6.50 analysts predicted.

(Jim Cramer’s Charitable Trust is long CTRA. See here for a full list of the stocks.)

As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade.

THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER.  NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB.  NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Continue Reading

Environment

Trump nominates a Tesla critic to lead NHTSA

Published

on

By

Trump nominates a Tesla critic to lead NHTSA

President Trump has nominated Jonathan Morrison to lead the National Highway Traffic Safety Administration (NHTSA). Morrison has previously criticized and tussled with Tesla in his previous role at NHTSA.

Morrison is now Trump’s nominee to head the National Highway Traffic Safety Administration, which is in charge of regulating the auto industry in the US.

The attorney was the agency’s Chief Counsel during Trump’s first term, and he had a few disputes with Tesla during that time.

In September 2018, the US National Highway Traffic Safety Administration (NHTSA) released its Tesla Model 3 crash test results, and the EV got five-star safety ratings in every category.

Advertisement – scroll for more content

Tesla interpreted the data from the test and claimed that Model 3 achieved “the lowest probability of injury of any vehicle ever tested by NHTSA“.

Morrison sent Tesla a cease-and-desist letter over the claim, arguing that it was misleading.

The lawyers also subpoenaed Tesla to get data about a specific crash in 2019.

Next week, Morrison is expected to have his confirmation hearing in the Senate and could take up his role shortly after.

The nomination is significant in the context of the current feud between Tesla CEO Elon Musk and President Trump.

Musk has been criticizing Trump and his allies over their recently passed budget and tax bill, which is expected to significantly increase the federal government’s debt and eliminate virtually all subsidies to electric vehicles and renewable energy, potentially harming Tesla.

Trump has warned Musk that he could go directly after his companies and NHTSA would be the top vehicle for that when it comes to Tesla.

The agency had already launched several investigations into Tesla over the years, with the largest one examining Tesla’s Full Self-Driving program and several fatal crashes related to the ADAS system.

Electrek’s Take

Most NHTSA probes into Tesla have resulted in slaps on the wrist at best, but this FSD probe involves several fatal crashes, and even though it started under the Biden administration, it could potentially ramp up under Trump, especially amid his feud with Musk.

On the one hand, it’s disheartening to see the US reach this point, where feuds between billionaires and elected officials are settled through regulatory agencies. Still, at the same time, Musk did buy the election for Trump, so he created this situation in the first place, and there are serious concerns about how safe FSD is.

At the very least, I would hope that NHTSA will start to force Tesla to release all its FSD crash and disengagement data.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

A 25 mph ambulance? The GEM microcar is now an emergency responder

Published

on

By

A 25 mph ambulance? The GEM microcar is now an emergency responder

You might remember the GEM as a quirky little electric microcar that’s been cruising through campuses, resorts, and planned communities for years. But now, it’s taking on a more serious job – saving lives. Waev Inc., the maker behind the long-running GEM electric vehicle line, has just unveiled the GEM Ambulance, a purpose-built, all-electric, street-legal low-speed vehicle (LSV) designed specifically for emergency medical services.

While it might not replace a full-size ambulance on high-speed highways, this new electric responder is tailor-made for the dense environments where conventional ambulances often struggle: college campuses, sporting events, entertainment venues, airports, and more. With a top speed of 25 mph, it’s built for maneuverability, safety, and zero-emission performance in pedestrian-heavy areas.

“The GEM Ambulance fills a critical gap in medical response – delivering the ideal balance of agility and safety EMS teams need in crowded settings,” said Byron Dudley, Vice President at Waev Inc.

The new GEM Ambulance is built on the same proven electric platform that has powered GEM vehicles for over 25 years. It’s a highly refined LSV that combines practical engineering with professional-grade EMS functionality. In partnership with emergency equipment supplier QTAC, Waev integrated a skid-mounted EMS system that includes secure patient transport, attendant seating, optional oxygen and IV mounts, and rugged PolyTough™ construction designed to handle demanding conditions.

Advertisement – scroll for more content

Unlike golf carts or UTV-based setups that have been DIYed into emergency vehicles, the GEM Ambulance offers a more stable, comfortable, and professional platform. The EMS skid is positioned between the wheels for better weight distribution, and the vehicle’s low deck height and rear step-up provide easy access for patients and personnel alike.

The GEM Ambulance doesn’t skimp on emergency essentials either. It’s equipped with a 360-degree red emergency lighting system, an SAE Class 1-compliant siren with multiple sound patterns, a public address system, turn signals, LED headlights and taillights, and even a pedestrian noise emitter for quiet zones. A backup camera and full 360° sightlines give drivers added confidence when navigating tight environments.

And since it’s 100% electric, there’s no tailpipe emissions to worry about when operating indoors or in crowded spaces. Maintenance is minimal thanks to GEM’s maintenance-free batteries, regenerative braking, and corrosion-resistant aluminum frame. There’s even a seven-year warranty on the lithium-ion battery option.

The biggest surprise might be the price. According to Waev, the GEM Ambulance can cost up to 80% less than a traditional ambulance and 50% less than electric trucks or UTV-based alternatives. Plus, with operating costs of just $0.03 per mile, it promises long-term savings with no fuel, no fluids, and no downtime from engine servicing.

With applications ranging from college campuses and amusement parks to military installations and warehouse sites, the GEM Ambulance could be a game-changer for localized EMS response. It’s available now through GEM’s nationwide dealer network and can also be purchased through government contracts like Sourcewell, Texas BuyBoard, and GSA procurement channels.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

The Kia EV5 might be coming to the US after all

Published

on

By

The Kia EV5 might be coming to the US after all

The Kia EV5 is officially heading to North America in early 2026, paving the way for a potential US launch. If so, it could go head-to-head with the Tesla Model Y.

Is Kia launching the EV5 in the US?

On Tuesday, Kia unveiled the new EV5, a global version of its electric SUV that has been sold in China since 2023.

Starting at around $20,000 (149,800 yuan), the EV5 is leading Kia’s comeback in China. It’s also a top-selling EV in Australia, where it’s exported from Kia’s Chinese joint venture, Yueda Kia.

The global version will be made in Korea with a few slight upgrades. For one, it’s powered by an 81.4 kWh nickel-manganese-cobalt (NMC) battery pack, rather than the BYD LFP Blade battery used in the version sold in China.

Advertisement – scroll for more content

In Europe, the EV5 will be initially available in two variants: a baseline model and a GT-Line model. Both are powered by front-wheel drive (FWD) with up to 215 hp (160 kW) and 218 lb-ft (295 Nm) of torque.

Kia-EV5-US
Kia EV5 baseline trim (Source: Kia)

The global version is 4,610 mm long, 1,875 mm wide, and 1,675 mm tall, or a bit smaller than the Tesla Model Y. It’s about the size of the Hyundai IONIQ 5.

Inside, you’ll find a setup similar to the EV9 and EV3, featuring Kia’s new ccNC (connected car Navigation Cockpit) infotainment system. The setup features a 12.3″ instrument cluster and a 12.3″ infotainment display in a panoramic format. There’s also an added 5.3″ climate control screen.

Kia-EV5-US
Kia EV5 GT-Line interior (Source: Kia)

During the launch event, Kia said the “rollout begins” in Korea and Europe in the second half of 2025, adding North American sales will start in early 2026.

Does that include the US? I wouldn’t get my hopes up. In January, Kia announced the EV5 will be “exclusive to the Canadian market in North America.” It will begin arriving at dealerships in 2026.

Kia-EV5-US
Kia EV5 GT-Line (Source: Kia)

However, it might make sense. The EV5 for North America will have a built-in NACS port, unlocking access to Tesla Superchargers. It will be available in both AWD and FWD powertrains. Two battery sizes will be offered, 60.3 kWh and 81.4 kWh, offering a range of up to 310 miles (500 km).

Kia-EV5-US
Kia EV5 GT-Line interior (Source: Kia)

With sales of the EV6 and EV9 slipping nearly 50% each through the first half of the year in the US, the EV5 could complement the two.

Electrek’s Take

Although it’s still unlikely, the EV5 could serve as a potential electric alternative to the Sportage, Kia’s top-selling vehicle in the US.

Through June, Kia has sold over 87,000 Sportage models in the US. In comparison, it’s only sold 4,938 EV9s and 5,875 EV6 models.

Kia is launching the EV4, its first electric sedan, in the US early next year. However, a smaller compact electric SUV may be an even better fit.

It already builds the EV9 and EV6 in Georgia, so it could produce the EV5 in the US to avoid extra tariff costs. Or, it could even potentially be built at Hyundai’s new EV plant in Georgia. However, nothing is confirmed.

Would you buy the Kia EV5 in the US? Prices would likely start at around $50,000. Drop us a comment below and let us know your thoughts.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Trending