Oil-field-services firm Halliburton (HAL) reported better-than-expected fourth-quarter results Tuesday, bolstering the Club’s long-term investment case in the energy stock. Total revenue climbed by 30.5% year-over-year, to $5.58 billion, largely in line with analysts’ forecasts. Earnings-per-share (EPS) doubled on an annual basis, to 72 cents a share, ahead of expectations for EPS of 67 cents a share. Bottom line Halliburton served up another strong quarter, with a headline earnings beat , strong margin expansion, solid cash flows and a robust outlook. Even better, the management team doesn’t expect investments in new oil-and-gas projects to wane any time soon. The board authorized management to link a portion of future dividends and buybacks to the company’s free-cash-flow generation. Nonetheless, shares of Halliburton tumbled Tuesday, trading down roughly 2.4%, at $39.59 a share. We don’t view today’s move lower as anything more than profit taking following a very strong year. Given years of material underinvestment in oil-and-gas production in the U.S. and an undersupplied global oil market, management expects demand to sustain the company beyond 2023. The Club, therefore, would see any further weakness in the stock as a potential buying opportunity. Our investment case continues to factor in a relatively strong crude oil market. West Texas Intermediate crude — the U.S. oil benchmark — has climbed by more than 4% since the start of the year, to around $80 a barrel. We are raising our price target on Halliburton to $48 a share, up from $44, while maintaining our two rating on the stock — meaning we would wait for a pullback before buying . Outlook Halliburton’s management said Tuesday that business on the ground “points towards continued oil-and–gas tightness.” This has resulted in a nearly 50% increase in supply side spending in the U.S., with activity growth of almost 30%, ultimately amounting to a roughly 5% increase in production. Management expects “activity to remain strong and service intensity to increase through 2023.” The team noted similarly tight dynamics in international markets, saying several members of the Organization of Petroleum Exporting Countries (OPEC) failed to meet their production quotas in in 2022. Meanwhile, the team expects demand to remain resilient in 2023, boosted by China’s economic reopening. Longer term, “only multiple years of increased investment in both stemming declines and reserve additions will solve [the] short supply” of oil and gas globally. In management’s view, the investments needed to bring supply and demand into balance “will drive demand for oil-field services [for] the next several years.” Capital return initiatives Management on Tuesday announced a 33% increase to the stock’s quarterly-dividend payout, to 16 cents per share, while saying the company would resume stock buybacks under the existing board authorization of roughly $5 billion. The team repurchased $250 million worth of shares in the fourth quarter. Moreover, the board approved a capital return framework that will allow management the ability to return at least 50% of annual free cash flow via dividends and buybacks going forward, similar to what we’ve seen at the Club’s other energy holdings. Management attributed the overall improvement in operating margin year-on-year to increased global activity, higher pricing and year-end product-and-software sales. The completion-and-production unit delivered its strongest operating margin performance since 2012, expanding to 20.7%, “due to improved pricing, service efficiency and activity mix in North America land, as well as increased activity in international markets.” The drilling-and-evaluation segment reported a margin improvement of 210-basis points on an annual basis. (Jim Cramer’s Charitable Trust is long HAL. 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.
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Oil-field-services firm Halliburton (HAL) reported better-than-expected fourth-quarter results Tuesday, bolstering the Club’s long-term investment case in the energy stock.
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The first of 23 caissons for Princess Elisabeth Island, the world’s first artificial energy island, is nearly complete.
Princess Elisabeth Island will be an electricity grid at sea that will connect offshore wind farms to the Belgian mainland and also serve as a hub for future interconnectors with the UK and Denmark. Belgian electricity transmission system operator Elia is the project’s developer.
The 20,000-ton caissons, which will form the energy island’s outer walls, are being built at Jan De Nul Group and DEME’s construction site in Vlissingen, the Netherlands. It takes around three months to build one caisson. The production process is split into five 20-day stages. The caissons are moved between the different work sites using “runners,” which takes about six hours.
When the caissons are ready, a semi-submersible vessel will transport them further down the harbor, where they’ll be temporarily stored in the water. They’ll then be moved to their final location in the North Sea this summer, weather allowing, said maritime infrastructure company Jan de Nul.
You can watch a time-lapse video of Princess Elisabeth Island’s first caisson being built here:
Princess Elisabeth Island is part of the larger Princess Elisabeth Zone, a future 3.5 gigawatt (GW) offshore wind farm in the North Sea, around 45 km (28 miles) off the Belgian coast. The world’s first artificial energy island will receive power from the wind turbines via undersea cables, and it will then be converted to high-voltage electricity and distributed to the Belgian mainland and other European countries. The energy island will combine both direct current (HVDC) and alternating current (HVAC).
The energy island will be finished in late 2026 when the electrical equipment will start to be installed. Princess Elisabeth Island is expected to be fully connected to all wind farms and the mainland by 2030.
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Honda is finally joining the EV race after announcing a massive $11 billion (CAD$15 billion) investment to build four new EV plants in Canada. The historic investment will be used to build Canada’s first EV supply chain, enabling 240,000 Honda EVs to be made for the US and Canada annually.
Honda reveals game changing investment to build EVs
Honda announced its largest investment in Canada ever as it prepares for the electric era. The plans for a new Honda EV plant and stand-alone EV battery factory in Alliston, Ontario.
Once fully operational, the EV facility will be able to produce 240,000 EVs a year, while its battery plant will have capacity of 36 GWh per year. Production is expected to begin in 2028.
According to a press release from the prime minister’s office, Honda will build Canada’s first comprehensive EV supply chain. The project will include four new manufacturing plants in Ontario.
In addition to the EV plant and battery factory, Honda will build a cathode active material and precursor plant through a joint venture with POSCO Future M. A second is planned with Asahi Kasei Corp.
Justin Trudeau, prime minister of Canada, said Honda’s investment is a “game changer for manufacturing in Canada.” With a full supply chain, Honda expects to cut costs by over 20%.
Honda aims for EVs and FCEVS to account for 100% of vehicle sales by 2040. Honda also invested $700 million to retool three Ohio plants to serve as its hub for future EV and EV battery production.
Meanwhile, Honda’s first electric SUV, the Honda Prologue, went on sale earlier this year. Starting at $47,400 (excluding destination), the Prologue offers up to 296 miles range.
2024 Honda Prologue trim
Starting Price (w/o $1,395 destination fee)
Starting price after tax credit (w/o $1,395 destination fee)
Starting price after tax credit (with $1,395 destination fee)
EPA Range (miles)
EX (FWD)
$47,400
$39,900
$41,295
296
EX (AWD)
$50,400
$42,900
$44,295
281
Touring (FWD)
$51.700
$44,200
$45,595
296
Touring (AWD)
$54,700
$47,200
$48,595
281
Elite (AWD)
$57,900
$50,400
$51,795
273
2024 Honda Prologue prices and range
With the $7,500 federal tax credit, the Prologue’s starting price can fall to as low as $39,900 (excluding destination).
Lace Woelfer, VP of Honda America National Auto Sales, said the Honda Prologue hits the “sweet spot” as a sporty, stylish electric SUV.
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