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3M—More on the same story—(from Bloomberg):
https://finance.yahoo.com/news/3m-boosts-profit-forecast-ceo-105728844.html
Correction—3M's updated 2024 non-GAAP EPS guidance was an increase of $0.20 at the low end from $6.80 to $7.00. The high end of the guidance range, $7.30, is unchanged.
Part of the reason for 3M's breakout today is the first quarterly CC with the new CEO, Bill Brown (#msg-174020774). On the CC, Brown said all the right things about about improving R&D productivity and capital management.
DXCM—(-42%)—posts soft 2Q24 results—slashes guidance:
https://finance.yahoo.com/news/dexcom-reports-second-quarter-2024-200300596.html
This is DXCM’s biggest 1-dat loss ever. The problem is not GLP-1 drugs, but rather the loss of market share to ABT in the CGM arena.
Finally breaks out. Good to see it not languishing around $100
3M—(+20%)—reports 2Q24 results—raises 2024 EPS guidance:
https://investors.3m.com/news-events/press-releases/detail/1854/3m-delivers-strong-second-quarter-results-company-updates
Today is shaping up to be the largest single-day % gain for 3M shares since the 1980s!
3M spun off its healthcare segment into the new company, Solventum (Nasdaq: SOLV) on 4/1/24, so 3M’s 2Q24 results and 2024 guidance no longer include that business segment.
New non-GAAP EPS guidance is $7.00-7.30, up $0.50 from the prior range of $6.80-7.30. (Non-GAAP EPS excludes the cost of the announced earplug and PFAS settlements and related legal expenses.)
3M reiterated guidance for 2024 sales growth of -0.25% to +1.75% and for organic sales growth of 0-2.0%. (Organic sales growth excludes the effect of acquisitions, divestitures, and exchange rates.)
CC slides:
https://d1io3yog0oux5.cloudfront.net/_142360f796ba67379326101abd746104/3m/db/3222/30879/presentation/Q2+2024+Earnings+Presentation.pdf
‘
2Q24 financial statements:
https://d1io3yog0oux5.cloudfront.net/_142360f796ba67379326101abd746104/3m/db/3222/30879/financial_statement/Q2+2024+Supplemental+Financial+Schedules.pdf
Off to the races.....Seabridge Gold receives substantially started designation for KSM. This opens the door (removes the biggest question) concerning KSM development
https://finance.yahoo.com/news/seabridge-gold-receives-ksm-substantially-114000468.html
So what is SA worth. KSM has the largest known undeveloped Au deposit in the world and the third largest Cu deposit. almost 1 billion dollars in development have been invested in capital improvements on site. Here's a good article covering recent acquisitions...https://source.benchmarkminerals.com/article/copper-underpins-bhps-39-billion-anglo-american-takeover-offer
SA has an MC of $1.3 billion before this regulatory decision......in my opinion there's plenty of room for growth.
SA is up $.95 (6.7%) today as of this post on already substantially greater daily volume with 4 hours trading to go. Coincidence, anticipation of a positive determination on their application, or more..........?????
BYD continues to build dominant position outside the EU % USA
https://electrek.co/2024/07/22/byd-launched-first-electric-mpv-booming-ev-market/
CLF 2Q24 CC notes—note second bullet item re AI:
• The planned transformer facility in Weirton, WV (#msg-174789843) will generate $75-100M in annual EBITDA, yielding a payback period on invested capital of only 1.5-2 years.
• CLF’s intends to build additional transformer facilities (other than the one at Weirton) because the EBIDTA margins are high and the demand is expected to increase sharply as the US electrical grid is upgraded to support AI growth and other imperatives.
• CLF expects to ship at least 4M tons in each of 3Q24 and 4Q24.
• Essentially all of the accounting charges for idling the Weirton tinplate facility have already been taken.
• No antitrust issues are expected relating to CLF’s acquisition of Stelco (#msg-174755282) due to the small overlap in the specific segments of the steel industry served by each company.
• LG says the highest price he would now pay for US Steel—if the Nippon deal falls through—is $29/sh. (Take this with a grain of salt, LOL.)
CC transcript:
https://finance.yahoo.com/news/cleveland-cliffs-clf-q2-2024-171517332.html
Activist_investor_builds_stake_in SOLV—(3M’s healthcare spinoff):
https://finance.yahoo.com/news/peltz-trian-building-stake-3m-230900848.html
See #board-42765 for additional info on SOLV.
CLF reports 2Q24 results:
https://www.clevelandcliffs.com/investors/news-events/press-releases/detail/645/cleveland-cliffs-reports-second-quarter-2024-results
All year-over-year comparisons (except volume shipped) are unfavorable due to the lower average price realization in 2Q24 compared to 2Q23. Still, 2Q24 was slightly better than some investors expected, which is why the stock is up ~3% in AH trading. CC Tuesday at 8:30am ET.
2Q24 highlights
• Revenue of $4.9B, -15% YoY
• Non-GAAP EPS of $0.11 (excluding a $0.11 impairment charge from the idling of the Weirton WV tinplate plant)* vs $0.28 in 2Q23
• Adjusted EBITDA of $323M, -58% YoY
• Free cash flow of $362M, -52% YoY
• Steel shipments of 4.0M net tons, +1% YoY
• 6/30/24 net debt of $3.4B, down $237M from 3/31/24 (despite repurchasing approximately $125M of CLF shares during 2Q24)
2024 guidance
• No updated or re-iterated guidance for 2024 steel shipment volume; the guidance given three months ago was 16.5M tons (vs 16.4M in 2023)
• Re-iterated cost reductions of ~$30 per net ton, corresponding to ~$500M adjusted EBITDA benefit compared to 2023
• Cap-ex guidance lowered $25M to $650-$700M (from prior range of $675-725M)
*See new plans for Weirton, WV site in #msg-174789843.
CLF invests $100M—including $50M grant_from WV—to build new electrical transformer plant in Weirton, WV at the site of idled tinplate facility:
https://finance.yahoo.com/news/cleveland-cliffs-announces-state-art-110000609.html
Cleveland-Cliffs Inc. announced today that it will establish a new electrical distribution transformer production plant in Weirton, West Virginia.
…The total capital investment is $150 million, of which $50 million (or one third) will be granted by the state of West Virginia to Cliffs through a forgivable loan [i.e. a grant]. Cliffs expects the new plant to come online in the first half of 2026.
The efficiency standards for distribution transformers recently promulgated by the U.S. Department of Energy support the long-term utilization of highly-efficient American-made Grain Oriented Electrical Steel (GOES), ensuring the viability of this investment in Weirton.
This investment will result in reemployment opportunities for 600 USW-represented workers from the indefinitely idled Weirton tinplate mill (https://www.clevelandcliffs.com/news/news-releases/detail/622/cleveland-cliffs-to-idle-weirton-tinplate-facility ).
Another gimmick....Tesla to have humanoid robots for internal use next year, Musk says
https://finance.yahoo.com/news/tesla-humanoid-robots-internal-next-102629128.html
The implication here; Optimus will work along side humans, and be as capable. No doubt there will actually be Optimus Bots in Tesla factories as promised. Will they be fast, efficient and versatile? Probably not. There are already thousands of task dedicated robot doing high speed precision tasks in Tesla factories, Optimus will probably be displayed doing low tech menial, repetitive tasks that humans used to do. Will there be greater efficiency and meaningful cost saving? Perhaps some, but I doubt it will be significant. It's more for marketing consumption. Another over promise.
Is this efficient?????
Seabridge Gold
https://www.mining.com/video-seabridge-gold-seeks-british-columbias-ok-to-keep-ksm-permits/
The company applied for the designation for the Golden Triangle project, which includes silver and copper, early this year. It would lock in construction permits for the project’s lifetime instead of expiring in 2026. With environmental permits in place, Seabridge has already invested around C$500 million in early construction and is seeking a deep-pocketed partner.
Sign Up for the Precious Metals Digest
“Getting that designation is crucial,” Fronk said last week at the Rule Symposium in Boca Raton, Florida. “We expect to have it by September.”
BYND seeks to avert bankruptcy:
https://www.wsj.com/articles/beyond-meat-engages-bondholders-for-restructuring-talks-7de6b8ae
Beyond Meat, the purveyor of plant-based meat substitutes, has engaged with a group of bondholders to initiate discussions about a balance-sheet restructuring, according to people familiar with the matter.
…For the quarter ended March 30, the company’s revenue declined 18% to $75.6 million year-over-year, while it had a net loss of $54.4 million, compared with a loss of $59 million the year prior. The company said that declines in both domestic and international retail and food-service channels were driven by decreases in volume of products sold, reflecting demand softness in the plant-based meat category.
ABT 2Q24 Results by Business Segment
62% of overall corporate sales were ex-US.
%Corp YoY Growth
Segment Sales (const currency)
Medical devices* 46% +12%
Diagnostics 21% -2%†
Nutrition 21% +8%
Pharmaceuticals‡ 12% +8%
ABT reports 2Q24 results—raises 2024 guidance slightly—for the second consecutive quarter, stock sells off because ABT didn’t raise 2024 guidance to a larger degree:
https://abbott.mediaroom.com/2024-07-18-Abbott-Reports-Second-Quarter-2024-Results-and-Raises-Full-Year-Guidance
2024 guidance for organic sales growth excluding COVID diagnostics is now 9.5-10%, up from the prior guidance of 8.5-10% given three months ago.
2024 guidance for non-GAAP EPS (which excludes FX and restructuring costs) is now $4.61-4.70, up from the prior guidance of $4.55-4.70 given three months ago.
2Q24 non-GAAP and GAAP EPS were $1.14 and $0.74, respectively, versus $1.08 and $0.78 in 2Q23. These YOY comparisons were adversely affected by a 56% decline in COVID-diagnostic sales, which were $102M in 2Q24 in 2Q24 vs $230M in 2Q23.
2Q24 FreeStyle Libre sales were $1.6B, +20% YoY in constant currency. FreeStyle Libre is the largest-selling medical device, ever, from any company.
Please see #msg-174774187 for a breakdown of ABT’s 2Q24 sales by business segment.
ARDX lawsuit vs CMS—>plainly motivated by SCOTUS “Chevron” decision:
https://www.globenewswire.com/news-release/2024/07/17/2914952/0/en/Ardelyx-AAKP-and-NMQF-File-Lawsuit-to-Protect-Dialysis-Patient-Choice-and-Timely-Access-to-Clinically-Meaningful-Medicines.html
I would submit that this is exactly the kind of case the US Supreme Court envisioned when reversing the longstanding “Chevron” doctrine of judicial deference to the interpretations of government agencies.
DE dials back on DEI:
https://www.wsj.com/business/deere-slashes-diversity-initiatives-after-backlash-from-conservative-activist-24424500
Deere, the world’s largest seller of farm equipment, said it would ensure the absence of what it described as “socially motivated messages” from company-mandated training materials and policies unless otherwise required. It also pledged to reaffirm that “the existence of diversity quotas and pronoun identification” aren’t, and never have been, company policy.
Tesla stock will surge 10-fold on Robotaxis, Ark’s Wood says
https://finance.yahoo.com/news/tesla-stock-surge-10-fold-000001701.html
LOL.....about all she is good at is not being able to legitimately value a corporation. But, hey, it's amusing.
Here's my prediction......Robotaxi will take years to breakeven, if it even "gets off the ground", which is questionable......
CLF—They paid a high premium for an asset…
…which they said they wouldn't…
You didn't comment on the change of direction that occurred in one quarter. …they probably won't be capable of buybacks for some time.
Dew,
You didn't comment on the change of direction that occurred in one quarter. They paid a high premium for a asset which they said they wouldn't and they probably won't be capable of buybacks for some time.
A modest amount of financial leverage boosts shareholder returns, so zero net debt is generally an undesirable long-term goal for a mature company.
Zero net debt. which I believe was part of LG's schtick a couple of years ago, would have also been positive for CLF's credit rating.
Re: CLF net-debt leverage
Cliffs is carrying $3.6B in debt so adding $2,x Bil in additional debt will exceed the 2.5x net debt projection.
I find LG's message to be consistent
Based on today’s CC, I it’s clear that CLF does still have an interest in acquiring US Steel at some point, but not in the near future.
I suggest that you listen to CLF’s CC, which succinctly presents the rationale for the Stelco deal; the replay can be accessed at:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=7LZd5r7g
[CLF CEO] LG seems to change direction every quarter...
You don’t see too many acquisitions that are immediately accretive to GAAP EPS
CLF slide #10 shows US/Canada steel production for the top-10 companies in the market. A combined CLF + Stelco will still rank #2 — trailing only Nucor — but it will be 50% ahead of the #3 company, Steel Dynamics.
CLF addendum—You don’t see too many acquisitions that are immediately accretive to GAAP EPS, as CLF asserts that the Stelco deal will be in the post I’m replying to.
LG is a go-big or go-home kind of guy.
CLF insiders were actively buying shares on the open market only one month before the announcement of the Stelco deal, which is rather surprising—and patently bullish.
CLF acquires Canada’s Stelco for $2.5B* cash/stock—an 87% premium to STLC.TO’s closing price on 7/12/24:
https://finance.yahoo.com/news/cleveland-cliffs-announces-acquisition-stelco-100000705.html
Cleveland-Cliffs Inc…is pleased to announce that it has entered into a definitive agreement to acquire Stelco Holdings Inc. (TSX:STLC) ("Stelco"). The acquisition confirms Cliffs’ commitment and leadership in integrated steel production in North America, and also brings an additional 1,800 United Steelworkers ("USW") union employees into Cliffs’ workforce.
Under the terms of the agreement, Stelco shareholders will receive CAD $60.00 per Stelco common share in cash and 0.454 shares of Cliffs common stock per share of Stelco common stock (or CAD $10.00 per share as of July 12, 2024), representing a total consideration of CAD $70.00 per Stelco share.
The transaction has received full support from David McCall, International President of the USW union.
The transaction implies a total enterprise value of approximately USD $2.5 billion (CAD $3.4 billion) for Stelco and represents an acquisition multiple of 4.8x 3/31/24 LTM [last twelve months] Adjusted EBITDA with synergies. Cliffs has a clear line of sight to the achievement of approximately $120 million of estimated annual cost savings with no impact to union jobs.
The acquisition is expected to be immediately accretive to 2024 and 2025 EPS. The transaction implies pro forma net leverage of 2.4x 3/31/2024 LTM Adjusted EBITDA. Upon completion of the transaction, Cliffs shareholders will own approximately 95% and Stelco shareholders will own approximately 5% of the combined company, on a fully diluted basis.
Stelco is an integrated steelmaker consisting of two operational sites, both located in the province of Ontario: Lake Erie Works, the newest and lowest-cost integrated steelmaking facility in North America; and Hamilton Works, a downstream finishing and cokemaking facility. Stelco ships approximately 2.6 million net tons of flat-rolled steel annually, primarily hot-rolled steel to service center customers.
…Upon closing of the transaction, Stelco is expected to continue operations as a wholly-owned subsidiary, preserving the name and legacy of the business.
… The transaction has been unanimously approved by Cliffs’ and Stelco’s respective Boards… The transaction is expected to close in the fourth quarter of 2024, subject to approval by Stelco shareholders, receipt of regulatory approvals and satisfaction of other customary closing conditions.
IEA is also bad at forecasting the penetration of renewables. Just go back through the last decade and see them revise up penetration yearly. Legacy combustion cycle generated energy is now higher cost than solar panel generated energy. Plus thermodynamics rules as you wrote and that heavily favors generating electrons and using that in electric motors. The friction to penetration continues to be lack of infrastructure to deliver electrons but will be addressed given the steep cost gradient in favor of renewables now. Economics rule and in Saudi Arabia, they are switching to solar ASAP so they can export more oil and gas. Saudi's aren't dumb, if economics favor combustion, they would just burn oil and gas.
Reality bites for Gen X retirement
https://www.axios.com/2024/07/10/gen-x-retirement-savings-americans-survey
The Slacker generation might have been slacking off when it came to planning for retirement: Gen X consistently ranks in surveys as the least-prepared group for when they stop earning.
Why it matters: The first members of Gen X were born in January 1965, which means they turn 59½ this month and can start withdrawing money from 401(k) and other retirement accounts without paying a penalty.
The big picture: As Gen Xers get older, they are getting increasingly worried about looming financial problems in retirement.
49% of Gen Xers in a 2023 Natixis survey said they worry that retirement may not be an option — up significantly from 42% in 2021.
Fully 50% of them say their main retirement planning mechanism is to avoid thinking about it altogether.
battery technology should be sufficiently mature for range anxiety and cost to no longer be an issue. More importantly, can the electricity needed, charging stations needed and power grid upgrades be in place. If so, peak oil could be a possibility by early 2030's......that's a BIG IF.
To me the entire plan is a joke. Are people expecting millions of "Robotaxis" to hit the road within a few years? TSLA is still stuck on level 2 automation. I can only imagine what restrictions will be placed on deployment, where they'll even be allowed to operate. I can hardly wait for the revenue projections.....no doubt they will be unrealistic. For me Musk is doing this to provide cover for the stalled EV business. No more free lunch in that space, the competition is moving faster then Tesla.
As for Tesla fully autonomous driving.....promised repeatedly by Musk, I believe Tesla won't be the first to reach level 4 or 5.
Why delay reveal????? who cares what the actual vehicle looks like if it's stuck at level 2 automation?
That's already happened to a large degree (#msg-174708107).
tangentially, by the same logic, I think the beyond meat et al folks are eventual dumpster fodder
Thanks, Charlie. That makes a lot of sense.
IEA prognostications of oil consumption are notoriously bad. Since thermodynamics rules & consumer population will grow, OPEC is more likely to be correct
FTC won’t rule on CVX-HES deal until Guyana arbitration is decided:
https://finance.yahoo.com/news/ftc-delays-chevron-hess-decision-154717912.html
The US Federal Trade Commission plans to delay its decision whether to block Chevron Corp.’s $53 billion takeover of Hess Corp. until after an arbitration case with Exxon Mobil Corp. is settled, according to people familiar with the matter.
The case with Exxon, which claims to have a right of first refusal over Hess’s biggest asset in Guyana, will likely take at least until the fourth quarter, meaning the FTC’s review will extend several more months. The agency plans to announce its decision when the arbitration is finished, said the people, who asked not to be named discussing an internal agency matter.
TSLA delays robotaxi rollout:
https://finance.yahoo.com/news/tesla-plans-delay-robotaxi-unveiling-154306840.html
Tesla Inc. is delaying its planned robotaxi unveiling to October, from August, to allow teams working on the project more time to build additional vehicle prototypes, according to people familiar with the decision.
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In many nations, a middle class is emerging for the first time in history.
Companies who satisfy the demands of these consumers in a sustainable manner should have bright prospects.
The Rising Influence of Rising Affluence is a forum for investment ideas based on this premise.
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