Pioneer Natural Resources (PXD) reported strong second-quarter profits and cash flow after the bell Tuesday, but favorable revisions to its guidance shined the brightest. Pioneer’s oil-and-gas revenue totaled $2.98 billion, down nearly 36% from the year-ago period. It’s unclear how this figure stacks up to the Refinitiv estimate of $3.52 billion, which we think factors in oil and gas plus other income items. Adjusted earnings per share of $4.49 solidly outpaced the consensus EPS estimate of $4.19. As a reminder, Pioneer is one of the few companies that host its post-earnings conference call the day after releasing numbers, instead of the same night. Pioneer’s second-quarter call is set to kick off at 10 a.m. ET on Wednesday. PXD YTD mountain Pioneer Natural Resources’ year-to-date stock performance. Bottom line With its hearty earnings beat, Pioneer showcased its money-making ability during a quarter in which oil prices largely trended downward. Still, perhaps the best news in the report is what Pioneer expects to happen next: The company trimmed its full-year capital budget outlook, partially citing operational efficiencies, while also modestly raising its total-production forecast. That demonstrated the company’s operational quality. Wall Street also appears pleased, with the stock up more than 1% in after-hours trading. The combination of spending a bit less despite pumping a bit more is a very encouraging sign from the large Permian Basin producer. What’s more, Pioneer may see additional relief in spending in the quarters ahead as inflationary pressures on oilfield services ease. Pioneer’s after-hours move extends a more-than 12% advance for the stock since late June, which has coincided with a rebound in crude prices . The oil bounce pushed the commodity to levels last seen in April. After Tuesday’s report, we continue to feel comfortable owning Pioneer, knowing it’s the best-run independent oil producer with some of the lowest break-even costs, making it well-positioned to benefit from any future increases in oil prices that may occur into year-end. Capital allocation Pioneer on Tuesday declared a base-plus-variable dividend of $1.84 per share Tuesday, which annualizes to a 3.3% yield, based on the stock’s most recent close. Of course, with lower oil prices this year than we saw in 2022, we recognize Pioneer’s dividend yield is now far from the near-double-digit percentages it maintained for large stretches of last year. The updated payout — which includes a base dividend of $1.25 per share — is also $1.50-per-share less than what the company declared in April alongside its first-quarter results. But, at that time, the oil-and-gas producer tinkered with its capital-return framework in a way that suggested stock buybacks may receive a greater emphasis than the variable portion of the dividend. That’s a justifiable decision in our view if management believes crude will go higher in the future. In the second quarter, Pioneer said it repurchased $124 million worth of stock at an average price of $207 per share, much lower than Tuesday’s close of $224.68. The buybacks, combined with the money allocated toward the base-and-variable dividends, together amount to 75% of the firm’s second-quarter free cash flow. That’s consistent with its capital-return target. Companywide Q2 results Overall, Pioneer’s free-cash-flow was much better than expected, at $742 million versus the $597 million estimate, according to FactSet, as seen in the above earnings table. Pioneer’s total second-quarter production of 710.7 thousand barrels of oil equivalent per day (MBoe/d) was above the company’s quarterly guidance and Wall Street’s estimate of 690.2 MBoe/d. Pioneer’s Q2 oil production came in toward the top of its guidance, at 369.1 thousand barrels per day (MBbls/d). That was above the 366.6 MBbls/d expected by analysts. For the third quarter, Pioneer expects its total production to average between 705 and 725 MBoe/d, with oil production specifically to average between 367 and 377 MBbls/d. The midpoint of both ranges is above what Wall Street was expecting. Capital budget Pioneer’s 2023 capital budget is now $4.36 billion to $4.58 billion, down $125 million on the top and bottom ends of the forecast. This favorable revision is despite raising its full-year oil production and total production forecasts. While we expect to hear a bit more from Pioneer management on the capital-budget changes during Wednesday’s earnings call, the company said in a press release they are “primarily attributable to strong production results and highly efficient operations resulting in reduced activity in the second half of 2023.” (Jim Cramer’s Charitable Trust is long PXD. 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 . 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Permian Basin rigs in 2020, when U.S. crude oil production dropped by 3 million a day as Wall Street pressure forced cuts.
Paul Ratje | Afp | Getty Images
Pioneer Natural Resources (PXD) reported strong second-quarter profits and cash flow after the bell Tuesday, but favorable revisions to its guidance shined the brightest.
A California judge ruled late Tuesday afternoon that Tesla engaged in “deceptive marketing” in reference to its Full Self-Driving system, and that Tesla’s license to sell and produce cars in the state should be revoked for 30 days.
However, the California DMV has said it will give Tesla 60 days to comply and fix its marketing before going through with the suspension.
The ruling is big news in a case that has been ongoing for years now.
Tesla has been selling level 2 driver assist software since 2016 which it calls “Full Self-Driving” (FSD), despite that this software did not (and still does not) make its cars capable of driving themselves.
Tesla also provides software under the name “Autopilot,” another term that evokes some level of autonomy, though perhaps not as explicitly as the aforementioned FSD. Tesla long held the position that this word is meant to evoke airplane-like systems that still require a pilot, but can just do most of the work for them.
So eventually, in 2021, the California Department of Motor Vehicles (DMV) officially started an investigation into Tesla’s marketing claims, to determine whether the company had lied to consumers.
During this time, the California legislature got involved as well, passing a law that specifically banned automakers from deceiving consumers into thinking vehicles have more autonomous capabilities than they do.
Well, after all these investigations and waiting, we finally have an an answer, and the judge’s ruling makes it quite clear: Tesla lied to consumers about its autonomous capabilities.
California court rules Tesla lied about autonomy
The court looked at Tesla’s marketing claims and also at surveys of people exposed to those claims and their opinion of whether a Tesla would be able to drive itself, given the marketing messages put out by the company.
It found problems both with the word Autopilot and the phrase Full Self-Driving.
The word “Autopilot” was not found to be “unambiguously false,” but the court said that its use “follows a long but unlawful tradition of ‘intentionally (using) ambiguity to mislead consumers while maintaining some level of deniability about the intended meaning.’” The court found that a reasonable person could believe that a car on Autopilot doesn’t require their constant undivided attention, which is incorrect as the driver is still fully responsible for the vehicle.
On “Full Self-Driving,” the court was even more harsh. It found that this feature name is “actually, unambiguously false and counterfactual” (comically, Tesla tried to argue here that “no reasonable person” could believe that Full Self-Driving actually means Full Self-Driving).
The court noted other language used by Tesla, including marketing copy that said “the system is designed to be able to conduct short and long distance trips with no action required by the person in the driver’s seat,” and suggested that “legal reasons” are the only things holding Tesla back from full autonomy. Tesla tried to say that this was a statement of future intent, but the court found that its use of the present tense shows otherwise.
Tesla has repeatedly changed its wording around FSD, first calling it Full Self-Driving Capability, then changing that to Full Self-Driving (Supervised) to emphasize the need for a driver to supervise the vehicle. The court noted these changes, and then said it would not be a burden to force Tesla to change its marketing further to clarify that its cars do not drive themselves.
The DMV could now shut Tesla down for 30 days if it does not comply
Which leads us to the proposed legal remedy: the court said that the DMV could suspend or revoke Tesla’s licenses for 30 days, stopping its ability to sell or build cars in the state.
Tesla’s first factory is in Fremont, California, where it still builds around half a million vehicles a year and employs some ~20,000 employees. Tesla says this remedy would be “draconian,” but the court said that without this option, there’s no reason to believe Tesla would stop its misrepresentations to the public.
The court also examined the possibility of financial restitution, but deemed that inappropriate. Since the case did not establish any quantifiable financial harm done by Tesla’s misrepresentation and noted the impracticality of accounting for that harm.
This ruling does not yet mean that Tesla can’t sell cars in California, which is its largest market in the US by far. The court noted that the DMV has the option of suspension or revocation, which the DMV can do at its discretion. And the DMV has said that it will allow Tesla 60 days to comply with the order before it takes action, and that it would focus on Tesla’s dealer license rather than its manufacturing license.
This would mean, specifically, that Tesla not refer to a level 2 driving system as “Autopilot” or using language that suggests these vehicles are autonomous. It will have to change its marketing materials and stop making public statements misleading the public about its autonomous capabilities.
Tesla said after the ruling that “sales in California will continue uninterrupted.” But we’ll see what happens in 60 days, and what sort of changes Tesla does or does not make to its deceptive marketing.
Tuesday’s ruling is just one of many legal cases against Tesla right now, specifically having to do with FSD. One relevant case is a class action lawsuit in California claiming Tesla misled customers about its cars self-driving capabilities. This ruling could provide fuel for that lawsuit, given a California judge has already gone on the record with an official determination that Tesla misled the public about FSD.
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Rad Power Bikes has filed for Chapter 11 bankruptcy protection, marking a dramatic turn for one of the most recognizable names in the US electric bike industry. The Seattle-based company entered bankruptcy court this week as part of a plan to sell the business within the next 45–60 days, while continuing to operate during the process.
Court filings show Rad listing roughly $32.1 million in assets against $72.8 million in liabilities. A significant portion of that debt includes more than $8.3 million owed to US Customs and Border Protection for unpaid import tariffs, along with millions more owed to overseas manufacturing partners in China and Thailand. The company’s remaining inventory of e-bikes, spare parts, and accessories is valued at just over $14 million. Founder Mike Radenbaugh remains the largest equity holder, with just over 41% ownership.
The bankruptcy filing comes less than a month after the US Consumer Product Safety Commission issued a rare public warning urging consumers to immediately stop using certain older Rad lithium-ion batteries, citing fire risks, particularly when certain batteries are exposed to water and debris. Rad pushed back on the agency’s characterization, stating that its batteries were tested by third-party labs and deemed compliant with industry safety standards, and touting its SafeShield batteries – another, more recent version of Rad’s battery introduced last year that is likely one of the safest e-bike batteries in the industry.
Financial pressure had been building steadily on the company. In early November, Rad Power Bikes issued a WARN notice to Washington state officials, indicating that up to 64 employees could be laid off in January, and warning that the company could shut down entirely if additional funding was not secured. That notice now reads as an early signal of the restructuring that has followed.
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Chapter 11 bankruptcy is not the end of a company, and in this case, it allows Rad to continue operating while restructuring its debts under court supervision, pausing most litigation and collection efforts through an automatic stay. The company says it plans to keep selling bikes and supporting customers during the process as it works toward a sale.
The filing caps an unfortunate fall from grace for a brand that raised hundreds of millions of dollars in several funding rounds during the pandemic years. After years as a dominant force in the direct-to-consumer e-bike market, Rad now faces an uncertain future shaped by tightening margins, regulatory scrutiny, and unresolved legal and financial challenges.
As Texas braces for tighter power margins and record demand on the ERCOT grid, Sunrun and NRG Energy are transforming home batteries into a giant virtual power plant. The two companies are integrating more home battery storage into the grid and tapping those batteries when the state needs power the most.
The solar + storage provider and energy company announced a new multi-year partnership aimed at accelerating the adoption of distributed energy in Texas, with a focus on solar-plus-storage systems that can be aggregated and dispatched during periods of high demand. The idea is simple: use home batteries as a flexible, on‑demand power source to help meet Texas’s rapidly growing electricity needs.
Under the deal, Texas homeowners will be offered a bundled home energy setup that pairs Sunrun’s solar and battery systems with retail electricity plans from NRG’s Texas provider, Reliant. Customers will also get smart battery programming designed to optimize when their batteries charge and discharge. As new and existing Sunrun customers enroll with Reliant, their combined battery capacity will be made available to support the ERCOT grid during times of stress.
“This partnership is a major step in achieving our goal of creating a 1 GW virtual power plant by 2035,” said Brad Bentley, President of NRG Consumer. “By teaming up with Sunrun, we’re unlocking a new source of dispatchable, flexible energy while giving customers the opportunity to unlock value from their homes and contribute to a more resilient grid.”
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Sunrun, which has one of the largest fleets of residential batteries in the US, will be paid for aggregating the capacity, and participating Reliant customers will be compensated by Sunrun for sharing their stored solar energy.
The arrangement gives Texas households a way to earn money from their batteries while also improving grid reliability in a state that continues to see rapid population growth, extreme weather, and rising electricity demand.
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