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Recent Articles
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Energy Transfer Now Covers Distributions with Traditional Free Cash Flow
Nov 7, 2024
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Image: Energy Transfer’s units have done quite well the past couple years, as the pipeline giant now covers distributions with traditional free cash flow.
For the nine months ended September 30, Energy Transfer generated $8.9 billion in cash flow from operations, as it spent $2.7 billion in capital expenditures, resulting in traditional free cash flow generation of $6.2 billion, which is well in excess of its distributions to partners, noncontrolling interests, and redeemable noncontrolling interests of $4.9 billion. Energy Transfer ended the third quarter with $299 million in cash and total debt of $59.3 billion. We liked Energy Transfer’s third quarter results, and we’re huge fans of its newfound ability to cover distributions with traditional free cash flow.
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Gilead Raises Revenue and Non-GAAP Diluted EPS Guidance
Nov 7, 2024
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Image Source: Gilead.
At the end of the quarter, Gilead had $5 billion in cash and marketable securities compared to $8.4 billion at the end of the year, the decline primarily due to its $3.9 billion acquisition of CymaBay Therapeutics. For the full year 2024, Gilead raised its guidance for product sales to the range of $27.8-$28.1 billion, up from $27.1-$27.5 billion previously. Non-GAAP diluted earnings per share is now targeted in the range of $4.25-$4.45, up from $3.60-$3.90 previously. We liked Gilead’s revenue growth in the quarter, as well as its raised financial outlook for 2024. The high end of our fair value estimate range stands at $111 per share.
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Albemarle Pursues Efficiency in the Wake of Lower Lithium Prices
Nov 7, 2024
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Image Source: Albemarle.
Albemarle is working hard in the face of weak lithium pricing, and the firm is driving cost and productivity improvements across its business. The firm noted that it is reducing its workforce by 6%-7%, which will help the company cut costs in the range of $300-$400 million, and it plans to decrease its fiscal 2025 capital spending by roughly half versus fiscal 2024 ($1.7-$1.8 billion), to an expected range of $800-$900 million. Total liquidity was $3.4 billion at the end of the quarter, including $1.7 billion in cash equivalents, while total debt was $3.6 billion. We continue to include Albemarle in the ESG Newsletter portfolio.
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Realty Income’s AFFO Covers Dividends Paid in Third Quarter
Nov 6, 2024
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Image: Realty Income’s shares have seen better days.
Realty Income reported mixed third quarter results November 4 with revenue exceeding the consensus forecast but funds from operations coming up short. Revenue advanced 28.1% in the quarter on a year-over-year basis, with same store rental revenue up modestly (0.2%). However, net income per share and FFO per share fell to $0.30 and $0.98, respectively, from $0.33 and $1.04 in the same period a year ago. Adjusted funds from operations (AFFO) came in at $1.05 per share in the period, up from $1.02 in last year’s quarter, and comfortably higher than dividends paid per share of $0.789 over the same time. Our fair value estimate for Realty Income stands at $61 per share.
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