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.
In this photo illustration, a Coterra Energy Inc. logo is seen on a smartphone screen.
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.
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.
When it comes to electric bikes, range anxiety is real — but it might be less of a concern than you think. In a recent real-world endurance test, Priority Bicycles’ Will Maurillo and Connor Swegle set out to answer a simple but ambitious question: Can a Current Plus e-bike hit 100 miles (160 km) on a single charge?
The test was part of the ongoing series Will Will Do It?, where Priority Bicycles’ Will Maurillo attempts new feats on bikes to see if he can pull them off.
The Priority Current Plus was upgraded late last year with a new 720Wh battery, or around 40% larger than the previous version. The bike is rated for up to 75 miles (121 km) on a single charge, and Will outfitted a stock Priority Current Plus with the company’s range extender battery to add another 500 Wh of battery as a reserve. Considering the bike is rated for 75 miles of range, that reserve battery was likely good planning.
It may seem like attempting a century, or a 100 mile (160 km) ride, would be problematic on a bike rated for just three-quarters of that distance. But that’s where real-world riding clashes with spec-sheet numbers. While the spec sheet can give riders an idea of an e-bike’s range on a single charge, the same e-bike can achieve drastically different ranges when ridden in different power modes.
Advertisement – scroll for more content
You’ll have to forgive the quick math here, but to put it simply, many e-bikes can achieve as little as 5-8 Wh/mile in the lowest power pedal assist mode. For comparison, an average electric car uses around 30-50x as much energy to travel the same distance. So, for a 720 Wh battery, 100 miles on a charge would require just 7.2 Wh/mile. That’s on the extreme end of efficiency for a commuter e-bike, but not totally impossible.
Will started his journey in upstate New York, setting out from Poughkeepsie and attempting to make it to Manhattan, nearly 90 miles (145 km) away. Taking what looks like bicycle trails most of the way, he and Connor rolled along on a cold morning with sights set on the distant downtown NYC.
Things started out well and after an impressive 57 miles (92 km), Will still had 40% charge remaining on the main downtube battery. After some playful shenanigans, including a quick stop at a trailside skatepark, he cruised on and finally made it to Manhattan, where he began a new battle against urban traffic, stoplights, and the general everyday tribulations of riding through big cities.
By mile 91.8 though, the main battery finally tapped out. At that point, he switched over to the range extender battery to finish up the last few miles and hit his goal of 100 miles (160 km). So while he technically went the distance, the last few miles did require the bike’s optional reserve battery.
This kind of real-world, long-distance ride is rare for most e-bike owners, but it’s a fascinating look at what’s becoming possible in the latest generation of electric bikes. While most riders won’t need to cover 100 miles in a single day, the demonstration speaks volumes about how far e-bikes have come.
For most commuters, even a 10 to 20 mile (16 to 32 km) daily round trip is well within the capability of even basic e-bikes today. But rides like Will’s show that e-bikes aren’t just limited to short hops across town. They’re becoming viable tools for longer-distance adventures, weekend exploration, or just eliminating range anxiety entirely.
And for those wondering how far the bike could have gone without such a fit rider using the lowest power pedal assist mode, I may be able to help. I actually own the same Current Plus e-bike and use it for my regular commuter/recreational bike. I only charge every few rides and often get a range of somewhere between 40-50 miles (64 to 80 km) when I’m using medium power pedal assist with occasional throttle usage.
Between the big battery and the low-maintenance components like the Gates belt drive, internally geared rear hub, and 140 Nm mid-drive motor, there’s a lot to like about the bike. I don’t push mine anywhere as far as Will did, and I’m certainly not as fit of a cyclist, but I can vouch for the Current Plus being the one bike I grab when I want a long and smooth ride that mixes fitness with recreational riding. I’d be lying if I said I never use the throttle when I’m tired, but the smooth torque sensor pedal assist definitely encourages me to pedal more than I do on my other e-bikes!
If you want to see my type of riding, check out my review video of the Current Plus, below.
FTC: We use income earning auto affiliate links.More.
The Tesla Solar Roof tiles are still alive, but the product is on the back burner at Tesla as it failed to achieve its promises.
When launching the solar roof in 2016, CEO Elon Musk presented it as a critical product to accelerate solar power deployment, as it opens up the market to people who want to go solar but also need to replace their roof soon.
However, Tesla didn’t reach volume production of the solar roof tiles until 2020, and even then, it was at a fraction of the deployment it was aiming for.
Advertisement – scroll for more content
In 2022, Electrekreported that Tesla installed solar roofs for the first time and confirmed that the Company deployed 2.5 MW of solar roofs during the second quarter of 2022, equivalent to approximately 23 roofs per week, which is far short of its goal.
Tesla shifted its focus on deploying Powerwalls and solar inverters through third-party installers.
The same thing is happening with Tesla’s solar roof tiles. The company appears to be giving up on installing them itself, but some installations are still happening with third-party certified installers.
Tesla doesn’t even give online quotes on its solar roof anymore and has people submit requests for quotes through third-party installers:
“In order to receive pricing and product information, Tesla will share your contact information with a Tesla Certified Installer.”
We are hearing less about solar roof installations lately, as Tesla has gone virtually silent on the program; however, some ongoing installations are still being carried out by third-party installers.
Weddle and Sons Roofing just posted about a new 20 kW Tesla Solar Roof installation in Topeka, Kansas:
It’s challenging to determine the exact deployment rate of the solar roof, but based on our checks with a few installers, it doesn’t appear to have increased since 2022.
Tesla-certified installers are even convincing potential buyers to opt for a regular roof with solar panels instead of a solar roof. Potential buyer Jeff Betty shared this text from an unnamed installer:
This is not entirely surprising, as the primary issue with the Tesla Solar Roof tiles is their pricing. Tesla aimed for the solution to be competitive with higher-end roofing options, but it remains expensive and much less affordable than many durable roof options, plus solar panels.
Electrek’s Take
In short, the Tesla Solar Roof is still alive, but it’s nowhere near the revolutionary product Tesla claimed it would be.
Instead, it has become a very niche higher-end roofing product that Tesla deploys in very low volume through third-party installers.
It’s not in any way a significant part of Tesla’s energy business, which is now almost entirely Megapacks and Powerwalls.
While Tesla’s solar roof is not for everyone, now is a great time to go solar with rooftop solar panels.
If you want to make sure you’re finding a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage. EnergySage is a free service that makes it easy for you to go solar – whether you’re a homeowner or renter. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20 to 30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and you share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links.More.
For the Valen Rev+, Retrospec managed to get the best out of that iconic moto-style scrambler spirit and put it into a comfortably handling fat tire e-bike while also keeping the performance bits that make it fun, and the best part is it comes at a reasonable price of just under $1,800
Aside from the looks and price this bike has a unique fun factor that comes from a combination of a few key components here.
One is the 20 by 4.0 inch Fat MTB tires with puncture protection and reflective sidewalls. Aside from these tires offering an extra layer of protection and suspension, Retrospec’s decision to offer wide tires also gives way more stability than a typical bike tire, which makes going through ruts, mud, or sand pretty effortless.
The second key component is the front suspension, which is fully adjustable and has 100mm of travel. Combined with the extra suspension from the fat tires, as mentioned earlier, this makes otherwise challenging terrain turn into fun detours that you’ll likely go out of your way to use.
Advertisement – scroll for more content
The third component is the 750w rear hub motor, which gives the bike a 28 mph assisted top speed. Combined with the secure handling and added front suspension, the Valen Rev+ is the kind of bike you want to plan an adventure with. Whether that’s a dirt road shortcut on your commute or a day to the beach, the comfortable long seat makes it hard to say no to a trip with the Valen Rev+
On the practical side, Retrospec put some significant thought into the design and build of this bike to ensure that riders are cared for with those often less thought of yet still essential features. Starting with the battery, the fully integrated 720Wh battery uses LG 21700 cells for a total of 68 miles of range when fully charged. In addition, the battery is lockable and easily removable for both on- and off-bike battery charging. It’s also seamlessly integrated into the bike’s frame, making for a clean look.
For safety, Retrospec added Tektro hydraulic disc brakes with e-bike-specific rotors, which is an important upgrade, considering an improved rotor typically allows for better heat dissipation and better overall performance. There are also Integrated front and rear lights with 100 Lux illumination for the front. Safety aside, the design here for the front light looks amazing.
For the less thought-of yet essential features, Retrospec included an easy-change rear wheel removal system that uses braze-ons located at the lower part of the bike, so there’s no need to remove zip ties. Unlike other e-bikes, the Valen Rev+ kept it simple with the same axel nut for both the front and rear which means fewer tools, but what makes the process itself a lot easier is not having to wrestle the chain when re-installing the wheel thanks to the chain hanger.
One of the great feelings of the Retrospec Valen Rev+ e-bike is how simple yet stylish it is; the display is a center-mounted color display with controls on the left-hand side of the handlebars. The control panel has only three buttons, so it’s as simple as it gets. With the up or down control, you can change through 6 levels of pedal assist, but if you’re looking for more control, you can also use the controls on the right side of the handlebars to cycle through the eight speeds on the Shimano Altus derailleur.
For how comfortable the moto-inspired Valen Rev+ is, it also feels great to pedal on in case you’re looking for more exercise and want to opt for the pedal assist rather than the throttle only. Unlike other e-bikes on the market, Retrospec’s Rev+ makes riding very approachable. For those who are newer to riding, that long seat and wide tires add a level of stability, making the overall learning experience much more enjoyable. With how comfortable the bike rides, it might make you think more about leaving the car at home more often and opting for the bike paths.
For those looking to get as much fun as possible out of an e-bike aside from the fat tires and front suspension, Retrospec’s BMX style handlebars offer excellent geometry and height that gives you much more control over the bike in case you wanna stand up and tackle some of the more challenging trails. In addition, if you’re looking to forget pedaling altogether, you could even choose to get the optional footpeg accessories, which, combined with the BMX-styled handlebars, will make the bike much more functional for off-road riding.
Overall, Retrospec seems to have put a lot of effort into bringing that scrambler moto spirit into a comfortable bike with loads of features that other manufacturers haven’t quite nailed down. From the easy rear wheel removal to the BMX-styled handlebars and comfortable long seat, it’s a very approachable and easy-to-maintain e-bike that can still rip on trails for those who want to tackle more of that tough off-road terrain.
FTC: We use income earning auto affiliate links.More.