Club holdings Coterra Energy (CTRA) and Pioneer Natural Resources (PXD) delivered fourth-quarter earnings beats Wednesday. But we’ll be watching for how the market responds to higher capital expenditure outlooks and lower quarterly dividends for both of these Texas-based oil-and-gas firms. Coterra’s total revenue increased 2.5% year-over-year, to $2.28 billion, beating analysts’ forecasts of $2.11 billion, according to estimates compiled by Refinitiv. Coterra’s adjusted diluted earnings-per-share (EPS) grew 40% compared with the year prior, to $1.16 a share, narrowly beating expectations for EPS of $1.10, Refinitiv data showed. Pioneer’s total revenue increased 18% year-over-year, to $5.10 billion, beating analysts’ forecasts of $3.53 billion, according to Refinitiv. Pioneer’s adjusted diluted EPS grew 29% on an annual basis, to $5.91 a share, topping expectations for EPS of $5.77, Refinitiv data showed. Note : Both companies are scheduled to host their earnings conference calls with analysts and investors Thursday at 10:00 a.m. ET. Bottom line Solid production and pricing, coupled with low costs, helped both companies deliver fourth-quarter results ahead of expectations. But with investors looking ahead to 2023, Coterra and Pioneer could both see their stock prices come under pressure over concerns about lower dividends on a sequential basis and higher capital expenditures in 2023 — as was the case with Club holding Devon Energy (DVN) last week. That move prompted us to reduce our exposure to any potential post-earnings downside by trimming Coterra and Pioneer late last week. However, given last week’s energy sell-off some of the dividend news may have already been priced into their share prices. After a strong 2022, energy stocks have stumbled out of the gate this year, tracking the declines in the underlying commodities. West Texas Intermediate crude — the U.S. oil benchmark — has fallen about 7.5% this year, to hover around $74 a barrel, while natural gas has seen its value come down by more than half, to around the low $2-per-cubic-foot level. We’ll look for more color on both companies’ 2023 frameworks tomorrow on their conference calls. For the moment, we reiterate 2 ratings on both firms. In afterhours trading Wednesday, Coterra was trading up more than 2%, at $23.80 a share, while Pioneer was up nearly 1%, at $207.11 a share. Capital allocation Coterra Energy said its upcoming quarterly fixed-plus-variable dividend will be 57 cents a share — factoring in a base dividend of 20 cents a share and a variable of 37 cents a share — compared with 68 cents per share in the prior quarter. Still, the new annualized payment represents a hefty 9.8% dividend yield based on Coterra’s closing price of $23.26 on Wednesday. Coterra also increased its annual base dividend to 80 cents per share from 60 cents, while announcing a new $2 billion share repurchase program. The company continues to target returning 50% or more of its free cash flow to shareholders, but its new priorities are to pay out the higher base dividend first, repurchase stock second, and pay variable dividends third. The decision to put more emphasis on share repurchases instead of variable dividends makes sense given the stock’s weak performance since June of last year. Management currently expects the company will generate $1.9 billion of free cash flow in 2023. After funding the base dividend, at least $400 million would be left over for additional shareholder returns. Pioneer said its upcoming quarterly fixed-plus-variable dividend will be $5.58 a share — factoring in a base dividend of $1.10 a share and a variable of $4.48 a share — compared with $5.71 per share in the prior quarter. But the annualized dividend yield based on Pioneer’s closing price of $205.27 Wednesday provides shareholders with a significant 10.87% yield, making it still one of the highest yielding companies in the S & P 500 . Pioneer also continues to make headway on its share repurchase program. The company bought back $400 million worth of stock in the fourth quarter and said Wednesday it has already bought back $250 million so far in the current quarter. Fourth-quarter production Coterra Energy’s oil-and-gas production came in above the high end of the company’s guidance and edged out analysts’ estimates, too. Meanwhile, Pioneer’s oil production slightly missed analysts’ forecasts — a disappointing outcome given the company is oil-weighted and crude returns higher profit margins than natural gas. Even so, Pioneer beat expectations on production of natural gas liquids and gas. Notably, Pioneer doesn’t hedge its oil production, making its realized pricing closer to that of the underlying commodity. Pioneer closed all its hedges at the start of 2022, a prescient move considering crude’s gains last year. 2023 outlook Guidance provided by Coterra and Pioneer echoed that of Devon: Softer production but higher capital expenditures in 2023. Coterra’s total production outlook for oil and gas was below estimates at the mid-point. But it beat on expectations for oil production, which should please investors given the high margins of crude production. On the other hand, Pioneer’s total production outlook was slightly higher than expected, though oil was roughly in line at the mid-point. Capital expenditure outlooks were higher than expected, too, and we suspect both companies are feeling some of the same inflationary pressures Devon cited last week . Still, both are very low cost operators. Coterra sees its corporate free cash flow breakeven at $45 per barrel of WTI and $2.25 per one thousand cubic feet of Henry Hub natural gas, while Pioneer’s 2023 corporate breakeven is $39 per barrel of WTI. (Jim Cramer’s Charitable Trust is long CTRA, PXD, DVN. 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.
The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019.
Angus Mordant | Reuters
Club holdings Coterra Energy (CTRA) and Pioneer Natural Resources (PXD) delivered fourth-quarter earnings beats Wednesday. But we’ll be watching for how the market responds to higher capital expenditure outlooks and lower quarterly dividends for both of these Texas-based oil-and-gas firms.
A view of offshore oil and gas platform Esther in the Pacific Ocean on January 5, 2025 in Seal Beach, California.
Mario Tama | Getty Images
President-Elect Donald Trump said Tuesday that he will reverse President Joe Biden‘s ban on offshore drilling along most of the U.S. coastline as soon as he takes office.
“I’m going to have it revoked on day one,” Trump said at a news conference, though he indicated that reversing the ban might require litigation in court.
Biden announced Monday that he would protect 625 million acres of ocean from offshore oil and gas drilling along the East and West coasts, the eastern Gulf of Mexico, and Alaska’s Northern Bering Sea. The president issued the ban through a provision of the 1953 Outer Continental Shelf Lands Act.
An order by Trump attempting to reverse the ban will likely end up in court and could ultimately be struck down.
During his first term, Trump tried to issue an executive order to reverse President Barack Obama’s use of the law to protect waters in the Arctic and Atlantic from offshore drilling. A federal court ultimately ruled that Trump’s order was not lawful and reversing the ban would require an act of Congress.
The Republican Party has a majority in both chambers of the new Congress.
Chinese EV Automaker ZEEKR is marking its third consecutive presence on the display floors of CES. During this year’s event, ZEEKR began teasing at least three new models scheduled to launch in 2025, some of which will feature an NVIDIA DRIVE Thor-based smart driver domain controller. In addition to those codenamed models, ZEEKR is also planning to launch another NVIDIA DRIVE Thor-equipped EV called “RT” in the US to be used by robotaxi developer Waymo.
ZEEKR wasted no time touting its latest EV and autonomous driving technology at CES 2025, which kicked off in Las Vegas earlier this week. As noted above, 2025 marks ZEEKR’s third consecutive participation in the annual tech event, which is notable considering the company was founded less than four years ago.
During last year’s event, ZEEKR showcased its 007, which had just launched in China days before. It offers a 540-mile range and a starting price below $30,000. At CES 2023, ZEEKR made its public debut in the US, showcasing its flagship 001 shooting brake and a purpose-built EV designed for robotaxi network Waymo, which we saw up close later that fall.
The Waymo BEV has become known as the ZEEKR RT, which is mentioned alongside several exciting announcements that the Chinese automaker teased last month.
ZEEKR shares plans for new models, plus Waymo BEVs
ZEEKR kicked off CES 2025 today with news of a new domain controller built using NVIDIA’s DRIVE Thor next-generation centralized computer. NVIDIA unveiled DRIVE Thor in the fall of 2022, announcing ZEEKR as its first customer and initial production of vehicles featuring the technology planned for early 2025.
As such, ZEEKR is hailing itself as the first OEM to integrate NVIDIA’s next-gen system-on-chip (SoC) into a domain controller to handle a wide range of smart driving, autonomous scenarios, and parking functions. Per NVIDIA during the DRIVE Thor debut, the computer “achieves up to 2,000 teraflops of performance, unifies intelligent functions — including automated and assisted driving, parking, driver and occupant monitoring, digital instrument cluster, in-vehicle infotainment (IVI) and rear-seat entertainment — into a single architecture for greater efficiency and lower overall system cost.”
As NVIDIA’s first DRIVE Thor customer, ZEEKR said its domain controller will soon be mass-produced and integrated into a new large SUV model to be launched this year. That SUV will be one of three new BEVs ZEEKR plans to launch in 2025. According to ZEEKR CEO Andy An, those vehicles have been internally codenamed “EX,” “DX,” and “CC.”
In addition to those passenger EVs in the works, ZEEKR shared that its RT van, based on the MIX and explicitly designed as a robotaxi for Waymo, is undergoing real-world testing and is expected to arrive as the world-first mass-produced purpose-built vehicle for autonomous rides.
ZEEKR RT deliveries to Waymo are expected later this year for further testing ahead of a future public robotaxi network launch. If that happens, ZEEKR could become the first Chinese EV brand to enter the US market, although it’s a bit of a loophole.
ZEEKR’s 009 MPV, MIX van, and 001 FR shooting brake are on display at CES at booth #5640 in the West Hall of the Las Vegas Convention Center. Go check them out.
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How about a new EV with your next Amazon order? As the first brand to sell vehicles on Amazon, Hyundai says, “You’re gonna need a bigger cart.” Hyundai is now selling cars directly on Amazon, including popular EVs like the IONIQ 5. Here’s how you can snag one.
How can you buy Hyundai EVs directly on Amazon?
Buying a new Hyundai is now as easy as adding it to your next Amazon order. However, you might need a bigger cart.
Amazon revealed plans to expand into vehicle sales in 2023, starting with Hyundai. After making it official at the 2023 LA Auto Show, Hyundai began selling vehicles on the platform just before the end of 2024.
Buying a new vehicle on Amazon Auto is as easy as buying a new laptop or outfit. You can browse through available Hyundai vehicles near you, secure financing, checkout, and schedule a pick-up time directly using Amazon’s trusted platform.
You can easily find the vehicle you’re looking for with the option to sort by model, trim, color, features, and more. After you find it, you can secure financing, sign the paperwork electronically, and complete the process in just a few clicks.
The best part is the haggle-free pricing. What you see at checkout is the price you will pay. Once finalized, you can pick the day and time to pick up your new ride at a local dealership.
If you have a trade-in, you can get an instant quote by answering a few questions and uploading images of the car. Then, you can apply the credit toward your new vehicle on Amazon Autos. When you go to pick up your new vehicle, the dealership will be ready for it.
Hyundai plans to expand the program by adding more dealers throughout the year and offering more leasing and financing options. On the Amazon Auto website, you can view Hyundai vehicles at participating dealers near you.
You can already find top-selling Hyundai EVs on Amazon Auto, including the updated 2025 IONIQ 5 and IONIQ 6. With new models, like the three-row IONIQ 9 rolling out, expect to see more EVs available soon.
The new IONIQ 5 starts at $42,500. With a bigger (84 kWh) battery, the updated model has a range of 318 miles, up from 303 miles in the outgoing IONIQ 5. It also has an NACS port, so it can be charged at Tesla Superchargers.
After kicking off production at its new EV plant in Georgia late last year, Hyundai’s electric vehicles now qualify for the $7,500 EV tax credit for the first time.
For those of you who don’t have access to the program yet, we’ve got you covered. With the new 2025 models rolling out, Hyundai is offering 2024 IONIQ 5 SUVs for next to nothing while they are still in stock. You can use our links below to find the best deals on Hyundai EV models in your area.
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