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Yahoo
a day ago
- Business
- Yahoo
Kemper Corp (KMPR) Q2 2025 Earnings Call Highlights: Record Cash Flow and Strategic Growth ...
Return on Adjusted Equity: 15%. Adjusted Book Value Per Share Growth: 14% year-over-year. Operating Cash Flow: Nearly $600 million, an all-time high. Specialty Auto Underlying Combined Ratio: 93.5%. Specialty Auto Policies in Force (PIF) Growth: 8% year-over-year. Specialty Auto Earned Premium Growth: 17%. Commercial Auto Underlying Combined Ratio: 90%. Commercial Auto PIF Growth: 18%. Net Income: $72.6 million or $1.12 per diluted share. Adjusted Consolidated Net Operating Income: $84.1 million or $1.30 per diluted share. Net Investment Income: $96 million, impacted by lower returns from alternative investments. Debt-to-Capital Ratio: 22.7%. Share Repurchase Authorization: Additional $500 million approved, total available $550 million. Warning! GuruFocus has detected 2 Warning Sign with KMPR. Release Date: August 05, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Kemper Corp (NYSE:KMPR) reported a strong return on adjusted equity of 15% and adjusted book value per share growth of 14% year-over-year. The Specialty Auto segment achieved a solid underlying combined ratio of 93.5% and an 8% year-over-year growth in policies in force (PIF). Kemper Corp (NYSE:KMPR) maintained a high-quality investment portfolio, with expectations for net investment income to rebound in the second half of the year. The company retired $450 million of debt, bringing the debt-to-capital ratio near its long-term target, and achieved an all-time high operating cash flow of nearly $600 million. Kemper Corp (NYSE:KMPR) has a strong capital and liquidity position, with $1.1 billion in available liquidity and a new $500 million share repurchase authorization approved by the Board. Negative Points The performance of alternative investments negatively impacted both the Specialty Auto and Life segments, with volatility in the investment portfolio affecting net investment income. Kemper Corp (NYSE:KMPR) reported adverse prior year development of approximately $19 million, driven by social inflation affecting the commercial vehicle business. The Specialty Auto segment is transitioning to a more normal market environment, resulting in lower profitable growth opportunities compared to the previous hard market conditions. The company experienced a modest decline in policy life expectancy in Florida due to aggressive competitor actions, impacting retention rates. Net investment income for the quarter was below expectations due to lower returns from alternative investments, influenced by broader macroeconomic pressures. Q & A Highlights Q: Can you explain the discrepancy between the year-over-year growth in written premium and the sequential decline in policies in force (PIF)? A: Joseph Lacher, President and CEO, explained that the difference is due to geographic mix rather than significant changes in premium rates. He emphasized that sequential quarter PIF growth can be misleading due to seasonality in Specialty Auto. The industry is transitioning from a hard market to a more normal market, which affects growth rates. Long-term, they expect low to mid-single-digit PIF growth annually. Q: Are you confident in maintaining the current loss results, particularly in private passenger auto and commercial auto? A: Joseph Lacher stated that they expect to maintain combined ratios in the 93.5% to 95% range, acknowledging some quarterly variability. The recent $90 million charge in commercial auto was due to social inflation, and they have adjusted their balance sheet accordingly. They remain confident in the business's long-term outlook. Q: What impact did the higher minimum limits in California have on premiums this quarter? A: Joseph Lacher noted that the impact was consistent with the first quarter and has now worked its way through the book, as most policies in California are six-month terms. He promised to provide specific numbers later. Q: How has retention varied by state, particularly in California, Florida, and Texas? A: Matthew Hunton, EVP and President of Kemper Auto, explained that retention is stable in California due to limited supply. In Florida, there is a modest decline in policy life expectancy due to competitive re-shopping, but it's not significant. Texas remains stable with less shopping activity recently. Q: Regarding the adverse development in commercial auto, was it purely due to severity increases, or were there other factors? A: Bradley Camden, CFO, clarified that the adverse development was primarily in the large loss bucket of commercial vehicle bodily injury, driven by social inflation. It was not an underwriting issue, and the business continues to perform well overall. Q: With the current combined ratio and debt-to-capital levels, is there potential for improved return on equity (ROE) over the cycle? A: Joseph Lacher indicated that the adjusted ROE of around 15% is attractive, with potential for improvement. He highlighted the significant share repurchase authorization as a reflection of their confidence in the business's value and potential for shareholder returns. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Kemper Corp (KMPR) Q2 2025 Earnings Call Highlights: Record Cash Flow and Strategic Growth ...
Return on Adjusted Equity: 15%. Adjusted Book Value Per Share Growth: 14% year-over-year. Operating Cash Flow: Nearly $600 million, an all-time high. Specialty Auto Underlying Combined Ratio: 93.5%. Specialty Auto Policies in Force (PIF) Growth: 8% year-over-year. Specialty Auto Earned Premium Growth: 17%. Commercial Auto Underlying Combined Ratio: 90%. Commercial Auto PIF Growth: 18%. Net Income: $72.6 million or $1.12 per diluted share. Adjusted Consolidated Net Operating Income: $84.1 million or $1.30 per diluted share. Net Investment Income: $96 million, impacted by lower returns from alternative investments. Debt-to-Capital Ratio: 22.7%. Share Repurchase Authorization: Additional $500 million approved, total available $550 million. Warning! GuruFocus has detected 2 Warning Sign with KMPR. Release Date: August 05, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Kemper Corp (NYSE:KMPR) reported a strong return on adjusted equity of 15% and adjusted book value per share growth of 14% year-over-year. The Specialty Auto segment achieved a solid underlying combined ratio of 93.5% and an 8% year-over-year growth in policies in force (PIF). Kemper Corp (NYSE:KMPR) maintained a high-quality investment portfolio, with expectations for net investment income to rebound in the second half of the year. The company retired $450 million of debt, bringing the debt-to-capital ratio near its long-term target, and achieved an all-time high operating cash flow of nearly $600 million. Kemper Corp (NYSE:KMPR) has a strong capital and liquidity position, with $1.1 billion in available liquidity and a new $500 million share repurchase authorization approved by the Board. Negative Points The performance of alternative investments negatively impacted both the Specialty Auto and Life segments, with volatility in the investment portfolio affecting net investment income. Kemper Corp (NYSE:KMPR) reported adverse prior year development of approximately $19 million, driven by social inflation affecting the commercial vehicle business. The Specialty Auto segment is transitioning to a more normal market environment, resulting in lower profitable growth opportunities compared to the previous hard market conditions. The company experienced a modest decline in policy life expectancy in Florida due to aggressive competitor actions, impacting retention rates. Net investment income for the quarter was below expectations due to lower returns from alternative investments, influenced by broader macroeconomic pressures. Q & A Highlights Q: Can you explain the discrepancy between the year-over-year growth in written premium and the sequential decline in policies in force (PIF)? A: Joseph Lacher, President and CEO, explained that the difference is due to geographic mix rather than significant changes in premium rates. He emphasized that sequential quarter PIF growth can be misleading due to seasonality in Specialty Auto. The industry is transitioning from a hard market to a more normal market, which affects growth rates. Long-term, they expect low to mid-single-digit PIF growth annually. Q: Are you confident in maintaining the current loss results, particularly in private passenger auto and commercial auto? A: Joseph Lacher stated that they expect to maintain combined ratios in the 93.5% to 95% range, acknowledging some quarterly variability. The recent $90 million charge in commercial auto was due to social inflation, and they have adjusted their balance sheet accordingly. They remain confident in the business's long-term outlook. Q: What impact did the higher minimum limits in California have on premiums this quarter? A: Joseph Lacher noted that the impact was consistent with the first quarter and has now worked its way through the book, as most policies in California are six-month terms. He promised to provide specific numbers later. Q: How has retention varied by state, particularly in California, Florida, and Texas? A: Matthew Hunton, EVP and President of Kemper Auto, explained that retention is stable in California due to limited supply. In Florida, there is a modest decline in policy life expectancy due to competitive re-shopping, but it's not significant. Texas remains stable with less shopping activity recently. Q: Regarding the adverse development in commercial auto, was it purely due to severity increases, or were there other factors? A: Bradley Camden, CFO, clarified that the adverse development was primarily in the large loss bucket of commercial vehicle bodily injury, driven by social inflation. It was not an underwriting issue, and the business continues to perform well overall. Q: With the current combined ratio and debt-to-capital levels, is there potential for improved return on equity (ROE) over the cycle? A: Joseph Lacher indicated that the adjusted ROE of around 15% is attractive, with potential for improvement. He highlighted the significant share repurchase authorization as a reflection of their confidence in the business's value and potential for shareholder returns. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
National Post
2 days ago
- Business
- National Post
Amentum Reports Third Quarter Fiscal Year 2025 Results and Raises Full Year Organic Guidance
Article content Operating Cash Flow of $106 million; Free Cash Flow of $100 million Article content Backlog of $44.6 billion; 1.0x YTD Book-to-Bill Article content Reduced Net Debt to $3.8 billion and Net Leverage to 3.5x Article content CHANTILLY, Va. — Amentum Holdings, Inc. ('Amentum' or the 'Company') (NYSE: AMTM), a leading advanced engineering and technology company, today announced results for the third quarter ended June 27, 2025, and raised its full year organic guidance for fiscal year 2025. Article content 'Amentum's third quarter performance reflects strong execution and demonstrates the continued strength of our business,' said Amentum Chief Executive Officer John Heller. 'We're seeing benefits from our integration efforts and mission-focused portfolio converge with tailwinds from enduring global trends and an improving budget environment. In addition, the successful divestiture of Rapid Solutions combined with our strategic growth initiatives enhance our financial flexibility and provide momentum for future growth as we head into the fourth quarter and beyond. We're pleased with our performance and excited about our ability to deliver long-term value for customers, employees and shareholders.' Article content Summary Operating Results Three Months Ended (in millions, except per share data) June 27, 2025 June 28, 2024 % Change GAAP Measures: Revenues $3,561 $2,142 66% Operating income $103 $89 16% Net income (loss) $10 $(26) 138% Diluted earnings (loss) per share $0.04 $(0.29) 114% Pro Forma and Non-GAAP Measures 1,2: Revenues $3,561 $3,490 2% Adjusted EBITDA 2 $274 $257 7% Adjusted EBITDA Margin 2 7.7% 7.4% +30 bps Adjusted Diluted Earnings Per Share (EPS) 2 $0.56 $0.51 10% Free Cash Flow 2 $100 N/A N/A 1 – June 28, 2024 Revenues and Non-GAAP financial measures are presented on a pro forma basis to include the results of Jacobs' Critical Mission Solutions and Cyber & Intelligence (CMS) businesses prepared in accordance with the requirements of Article 11 of Regulation S-X. 2 – Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Management believes that these non-GAAP measures provide another measure of Amentum's results of operations and financial condition, including its ability to comply with financial covenants. See Unaudited Pro Forma Non-GAAP Financial Measures at the end of this press release for more information and a reconciliation of our selected reported results to these non-GAAP measures. Article content GAAP Results Article content GAAP revenues increased 66% year-over-year primarily as a result of revenues from the combination with Jacobs' Critical Mission Solutions and Cyber & Intelligence (CMS) businesses. GAAP operating income increased as a result of the contribution from CMS, partially offset by increased intangible amortization expense. GAAP net income and diluted earnings per share improved year-over-year due to the higher operating income and lower interest expense. Article content Pro Forma and Non-GAAP Results Article content Pro forma revenues, which include the results of CMS prepared in accordance with the requirements of Article 11 of Regulation S-X, increased 2% year-over-year driven by growth in Digital Solutions. Pro Forma Adjusted EBITDA increased 7% year-over-year primarily due to the higher revenues and improved operating performance. Pro Forma Adjusted Net Income and Adjusted Diluted Earnings Per Share increased due to higher operating profit partially offset by an increase in interest expense. Article content Three Months Ended Nine Months Ended (in millions) June 27, 2025 June 28, 2024 1 % Change June 27, 2025 June 28, 2024 1 % Change Revenues Digital Solutions $1,421 $1,274 12% $4,047 $3,852 5% Global Engineering Solutions 2,140 2,216 (3)% 6,421 6,441 —% Total Revenues $3,561 $3,490 2% $10,468 $10,293 2% Adjusted EBITDA 2 Digital Solutions $114 $94 21% $321 $293 10% Global Engineering Solutions 160 163 (2)% 483 479 1% Total Adjusted EBITDA $274 $257 7% $804 $772 4% 1 – June 28, 2024 Revenues and Non-GAAP financial measures are presented on a pro forma basis. 2 – Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Management believes that these non-GAAP measures provide another measure of Amentum's results of operations and financial condition, including its ability to comply with financial covenants. See Unaudited Pro Forma Non-GAAP Financial Measures at the end of this press release for more information and a reconciliation of our selected reported results to these non-GAAP measures. Article content Digital Solutions revenues for the third quarter increased 12% year-over-year driven by higher volume from the ramp up of new commercial contract awards. Adjusted EBITDA increased 21% year-over-year due to the higher revenues and improved operational performance. Article content Global Engineering Solutions revenues for the third quarter decreased 3% year-over-year as a result of the expected ramp-down on certain historical programs, partially offset by new contract awards and growth on existing programs. Adjusted EBITDA decreased 2% year-over-year as a result of the lower revenue volume, partially offset by improved operational performance. Article content Cash Flow Summary Article content During the three months ended June 27, 2025, Amentum generated $106 million and $275 million of net cash from operating and investing activities, respectively, and used $203 million in financing activities. Net cash provided by operating activities was driven by strong cash earnings and disciplined working capital management. Net cash provided by investing activities included $360 million in proceeds from the sale of Rapid Solutions which were partially offset by a $70 million payment for the final net working capital position from the CMS merger. Investing activities also included $6 million in capital expenditures which resulted in quarterly free cash flow of $100 million. Financing activities consisted primarily of $200 million in principal payments on our Term Loan. As of June 27, 2025, Amentum had $738 million in cash and cash equivalents and $4.6 billion of gross debt. Subsequent to the quarter end, Amentum made an additional $250 million voluntary principal payment on the Term Loan. Article content Backlog and Contract Awards Article content As of June 27, 2025, the Company had total backlog of $44.6 billion, compared with $26.9 billion as of June 28, 2024, an increase of $17.7 billion primarily due to the acquisition of CMS. Funded backlog as of June 27, 2025 was $5.6 billion. Article content Notable Q3 Fiscal Year 2025 Highlights Article content Space Force Range Contract (SFRC) – The United States Space Force awarded Amentum SFRC, a $4 billion single-award indefinite delivery indefinite quantity contract with a ten-year ordering period, to advance the national capability for Assured Access To Space from the Eastern and Western Ranges through responsive and flexible operations, maintenance, sustainment, systems engineering and integration solutions. The award is under protest and therefore is not yet included in backlog or book-to-bill. Canadian Nuclear Laboratories (CNL) – The Atomic Energy of Canada Limited awarded the CNL operations and management solutions contract, a CAD $1.2 billion annual contract with a six-year base and extension periods up to a total of twenty years, to Nuclear Laboratory Partners of Canada, Inc. As part of the joint venture partnership, Amentum will continue to bring comprehensive nuclear operational solutions, research and development, and technical expertise in Canada. Multiple Intelligence Awards – Amentum secured two new awards totaling over $500 million to provide Intelligence customers with a broad range of advanced engineering and technology solutions including mission-critical data modeling and analysis. The awards illustrate the continued strong demand for Amentum's expertise and innovative intelligence solutions. On-Contract Growth Modifications and Extensions – Amentum benefited from over $2 billion in bookings from contract modifications and extensions from a variety of end-market customers, including the U.S. Air Force, U.S. Navy, and Fortune 500 clients. Article content Completed Divestitures Article content On June 26, 2025, Amentum announced it completed the divestiture of a hardware and products business, Rapid Solutions, for $360 million in cash. The business accounted for approximately 1% of Amentum's annual revenues and Adjusted EBITDA. In addition, during the third quarter Amentum also completed the sale of its non-core New Zealand facilities maintenance business which accounted for approximately $50 million in annual revenues. Article content Updated Fiscal Year 2025 Guidance Article content (in millions, except per share data) Prior Guidance Current Guidance Implied Underlying Organic Increase 2 Revenues $13,850 – $14,150 $13,975 – $14,175 ~$125 Adjusted EBITDA 1 $1,065 – $1,095 $1,065 – $1,095 ~$5 Adjusted Diluted EPS 1 $2.00 – $2.20 $2.05 – $2.20 ~$0.05 Free Cash Flow 1 $475 – $525 $475 – $525 ~$20 1 – Represents a Non-GAAP financial measure – see the related explanations included elsewhere in this release. Amentum does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measures due to the inherent difficulty in forecasting and quantifying certain significant items. These items are uncertain, depend on various factors and could have a material impact on GAAP reported results for the relevant period. 2 – Represents increases to the guidance mid-points plus the estimated fourth quarter impact from the divested Rapid Solutions and New Zealand facilities maintenance businesses included in the prior guidance issued on May 6, 2025 which were approximately: Revenues of $50 million, Adjusted EBITDA of $5 million, Adjusted Diluted EPS of $0.02 and Free Cash Flow of $20 million. Article content Webcast Information Article content Amentum will host a conference call beginning at 8:30 a.m. Eastern time on Wednesday, August 6, 2025 to discuss the results for the third quarter ended June 27, 2025. The conference call will be webcast simultaneously to the public through a link on the Investor Relations section of the Amentum website at After the call concludes, a replay of the webcast can be accessed on the Investor Relations website. Article content Amentum is a global leader in advanced engineering and innovative technology solutions, trusted by the United States and its allies to address their most significant and complex challenges in science, security and sustainability. Our people apply undaunted curiosity, relentless ambition and boundless imagination to challenge convention and drive progress. Our commitments are underpinned by the belief that safety, collaboration and well-being are integral to success. Headquartered in Chantilly, Virginia, we have more than 53,000 employees in approximately 80 countries across all 7 continents. Article content Visit us at to learn how we advance the future together. Article content This release contains or incorporates by reference statements that relate to future events and expectations and, as such, could be interpreted to be 'forward-looking statements' as that term is defined in the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements may be characterized by terminology such as 'believe,' 'project,' 'expect,' 'anticipate,' 'estimate,' 'forecast,' 'outlook,' 'target,' 'endeavor,' 'seek,' 'predict,' 'intend,' 'strategy,' 'plan,' 'may,' 'could,' 'should,' 'will,' 'would,' 'will be,' 'will continue,' 'will likely result,' or the negative thereof or variations thereon or similar terminology generally intended to identify forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including projections of financial performance; statements of plans, strategies and objectives of management for future operations; any statement concerning developments, performance or industry rankings relating to products or services; any statements regarding future economic conditions or performance; any statements of assumptions underlying any of the foregoing; and any other statements that address activities, events or developments that the Company intends, expects, projects, believes or anticipates will or may occur in the future. Article content Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others: changes in U.S. or global economic, financial, business and political conditions, including changes to governmental budgetary priorities and tariffs; our ability to comply with the various procurement and other laws and regulations; risks associated with contracts with governmental entities; reviews and audits by the U.S. government and others; changes to our professional reputation and relationship with government agencies; the occurrence of an accident or safety incident; the ability of the Company to control costs, meet performance requirements or contractual schedules, compete effectively or implement its business strategy; the ability of the Company to retain and hire key personnel, and retain and engage key customers and suppliers; the failure to realize the anticipated benefits of the 2024 transaction with Jacobs Solutions Inc.; potential liabilities associated with shareholder litigation or other settlements or investigations; evolving legal, regulatory and tax regimes; and other factors set forth under Item 1A, Risk Factors in the annual report on Form 10-K (the 'Annual Report'), and from time to time in documents that we file with the SEC. The above list of factors is not exhaustive or necessarily in order of importance. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see the discussions under the section entitled 'Risk Factors' in the Annual Report. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law. Article content This release includes the presentation and discussion of pro forma financial information that incorporates the results of CMS prepared in accordance with the requirements of Article 11 of Regulation S-X. This release also includes the presentation and discussion of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted Earnings Per Share, Free Cash Flow and Net Leverage, which are not measures of financial performance under Generally Accepted Accounting Principles in the United States ('GAAP'), each of which are pro forma when reporting for the three and nine months ended June 28, 2024. These pro forma and non-GAAP measures should be considered only as supplements to, and should not be considered in isolation or used as substitutes for, financial information prepared in accordance with GAAP. Management of the Company believes these pro forma and non-GAAP measures, when read in conjunction with the Company's financial statements prepared in accordance with GAAP and, where applicable, the reconciliations herein to the most directly comparable GAAP measures, provide useful information to management, investors and other users of the Company's financial information in evaluating operating results and understanding operating trends by adjusting for the effects of items we do not consider to be indicative of the Company's ongoing performance, the inclusion of which can obscure underlying trends. Additionally, management of the Company uses such measures in its evaluation of business performance, particularly when comparing performance to past periods, and believes these measures are useful for investors because they facilitate a comparison of financial results from period to period. The computation of pro forma and non-GAAP measures may not be comparable to similarly titled measures reported by other companies, thus limiting their use for comparability. Article content Definitions of applicable non-GAAP measures and reconciliations to the most directly comparable GAAP measures are provided elsewhere in this release. Article content In addition to the above non-GAAP financial measures, the Company has included backlog, net bookings, and book-to-bill in this release. Backlog is an operational measure representing the estimated amount of future revenues to be recognized under negotiated contracts, and net bookings represent the change in backlog between reporting periods plus reported revenues for the period. Book-to-bill represents net bookings divided by reported revenues for the same period. We believe these metrics are useful for investors because they are an important measure of business development performance and are used by management to conduct and evaluate its business during its regular review of operating results. Article content June 27, 2025 September 27, 2024 ASSETS Current assets: Cash and cash equivalents $ 738 $ 452 Accounts receivable, net 2,475 2,401 Prepaid expenses and other current assets 214 231 Total current assets 3,427 3,084 Property and equipment, net 115 144 Equity method investments 198 123 Goodwill 5,616 5,556 Intangible assets, net 2,075 2,623 Other long-term assets 377 444 Total assets $ 11,808 $ 11,974 LIABILITIES Current liabilities: Current portion of long-term debt $ 43 $ 36 Accounts payable 821 764 Accrued compensation and benefits 692 696 Contract liabilities 147 113 Other current liabilities 469 356 Total current liabilities 2,172 1,965 Long-term debt, net of current portion 4,441 4,643 Deferred tax liabilities 249 370 Other long-term liabilities 357 444 Total liabilities 7,219 7,422 SHAREHOLDERS' EQUITY Common stock, $0.01 par value, 1,000,000,000 shares authorized; 243,322,468 shares issued and outstanding at June 27, 2025 and 243,302,173 shares issued and outstanding at September 27, 2024. 2 2 Additional paid-in capital 4,914 4,962 Retained deficit (501 ) (527 ) Accumulated other comprehensive income 43 23 Total Amentum shareholders' equity 4,458 4,460 Non-controlling interests 131 92 Total shareholders' equity 4,589 4,552 Total liabilities and shareholders' equity $ 11,808 $ 11,974 Article content AMENTUM HOLDINGS, INC. Article content UNAUDITED NON-GAAP FINANCIAL MEASURES Article content The presentation and discussion of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow are not measures of financial performance under Generally Accepted Accounting Principles in the United States ('GAAP'). These non-GAAP measures should be considered only as supplements to, and should not be considered in isolation or used as a substitute for, financial information prepared in accordance with GAAP. Management believes these non-GAAP measures, when read in conjunction with our consolidated financial statements prepared in accordance with GAAP and the reconciliations herein to the most directly comparable GAAP measures, provide useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company. The computation of non-GAAP measures may not be comparable to similarly titled measures reported by other companies, thus limiting their use for comparability. Article content Adjusted EBITDA Article content is defined as GAAP net income attributable to common shareholders adjusted for interest expense and other, net, provision for income taxes, depreciation and amortization, and excludes the following discrete items: Article content Acquisition, transaction, and integration costs – Represents acquisition, transaction and integration costs, including severance, retention, and other adjustments related to acquisition and integration activities. Amortization of intangibles – Represents the amortization of intangible assets. Non-cash GAAP expense (gain) – Represents a non-cash goodwill impairment charge and a non-cash gain on acquisition of controlling interest. Divestitures – Represents divestiture gains and losses. Loss on extinguishment of debt – Represents the write-off of debt discount and debt issuance costs as a result of debt modifications. Utilization of certain fair market value adjustments assigned in purchase accounting – Represents the periodic utilization of the fair market value adjustments assigned to certain equity method investments and non-controlling interests based on the remaining period of performance for the related contract. Share-based compensation – Represents non-cash compensation expenses recognized for share based arrangements. Article content Adjusted EBITDA Margin Article content is defined as Adjusted EBITDA divided by revenues. Article content Adjusted Net Income Article content is defined as GAAP net income attributable to common shareholders excluding the discrete items listed under Adjusted EBITDA and the related tax impacts. Article content Adjusted Diluted EPS Article content is defined as Adjusted Net Income divided by diluted weighted average number of common shares outstanding. Article content Free Cash Flow Article content is defined as GAAP cash flow provided by operating activities less purchases of property and equipment. Article content AMENTUM HOLDINGS, INC. Article content For the Three Months Ended June 27, 2025 As reported Acquisition, transaction and integration costs Amortization of intangibles Divestitures Loss on extinguishment of debt Utilization of fair market value adjustments Share-based compensation Non- GAAP results Revenues $ 3,561 $ — $ — $ — $ — $ — $ — $ 3,561 Operating income $ 103 $ 32 $ 118 $ — $ — $ 5 $ 7 $ 265 Non-operating expenses, net (91 ) — — 3 3 — — (85 ) Income before income taxes 12 32 118 3 3 5 7 180 Provision for income taxes 1 (13 ) (8 ) (11 ) (8 ) — (1 ) (2 ) (43 ) Net income including non-controlling interests (1 ) 24 107 (5 ) 3 4 5 137 Less: net income (loss) attributable to non-controlling interests 11 — — — — (13 ) — (2 ) Net income (loss) attributable to common shareholders $ 10 $ 24 $ 107 $ (5 ) $ 3 $ (9 ) $ 5 $ 135 Basic and diluted income per share attributable to common shareholders $ 0.04 $ 0.10 $ 0.44 $ (0.02 ) $ 0.01 $ (0.03 ) $ 0.02 $ 0.56 Basic and diluted weighted average shares outstanding 243 243 243 243 243 243 243 243 Net income (loss) attributable to common shareholders $ 10 $ 24 $ 107 $ (5 ) $ 3 $ (9 ) $ 5 $ 135 Net income margin 2 0.3 % 3.8 % Depreciation expense 11 — — — — — — 11 Amortization of intangibles 118 — (118 ) — — — — — Interest expense and other, net 88 — — (3 ) — — — 85 Provision for income taxes 13 8 11 8 — 1 2 43 EBITDA (non-GAAP) $ 240 $ 32 $ — $ — $ 3 $ (8 ) $ 7 $ 274 EBITDA margin 6.7 % 7.7 % 1 – Calculation uses a full year estimated statutory rate on each non-GAAP tax deductible adjustment, unless the nature of the item requires application of specific tax treatment for related impacts. 2 – Calculated as net income (loss) attributable to common shareholders divided by revenues. Article content AMENTUM HOLDINGS, INC. Article content The following table presents the reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted EPS to the most directly comparable GAAP measures for the nine months ended June 27, 2025: Article content For the Nine Months Ended June 27, 2025 As reported Acquisition, transaction and integration costs Amortization of intangibles Divestitures Loss on extinguishment of debt Utilization of fair market value adjustments Share-based compensation Non- GAAP results Revenues $ 10,468 $ — $ — $ — $ — $ — $ — $ 10,468 Operating income $ 345 $ 62 $ 358 $ — $ — $ 16 $ 15 $ 796 Non-operating expenses, net (264 ) — — 3 3 — — (258 ) Income before income taxes 81 62 358 3 3 16 15 538 Provision for income taxes 1 (59 ) (15 ) (41 ) (8 ) — (3 ) (3 ) (129 ) Net income (loss) including non-controlling interests 22 47 317 (5 ) 3 13 12 409 Less: net income (loss) attributable to non-controlling interests 4 — — — — (25 ) — (21 ) Net income (loss) attributable to common shareholders $ 26 $ 47 $ 317 $ (5 ) $ 3 $ (12 ) $ 12 $ 388 Basic and diluted income (loss) per share attributable to common shareholders $ 0.11 $ 0.19 $ 1.30 $ (0.02 ) $ 0.01 $ (0.04 ) $ 0.05 $ 1.60 Basic and diluted weighted average shares outstanding 243 243 243 243 243 243 243 243 Net income (loss) attributable to common shareholders $ 26 $ 47 $ 317 $ (5 ) $ 3 $ (12 ) $ 12 $ 388 Net income margin 2 0.2 % 3.7 % Depreciation expense 29 — — — — — — 29 Amortization of intangibles 358 — (358 ) — — — — — Interest expense and other, net 261 — — (3 ) — — — 258 Provision for income taxes 59 15 41 8 — 3 3 129 EBITDA (non-GAAP) $ 733 $ 62 $ — $ — $ 3 $ (9 ) $ 15 $ 804 EBITDA margin 7.0 % 7.7 % 1 – Calculation uses a full year estimated statutory rate on each non-GAAP tax deductible adjustment, unless the nature of the item requires application of specific tax treatment for related impacts. 2 – Calculated as net income (loss) attributable to common shareholders divided by revenues. Article content AMENTUM HOLDINGS, INC. Article content The presentation and discussion of Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDA Margin, Pro Forma Adjusted Net Income, Pro Forma Adjusted Diluted EPS, and Net Leverage are not measures of financial performance under Generally Accepted Accounting Principles in the United States ('GAAP'). These non-GAAP measures should be considered only as supplements to, and should not be considered in isolation or used as a substitute for, financial information prepared in accordance with GAAP. Management believes these non-GAAP measures, when read in conjunction with our consolidated financial statements prepared in accordance with GAAP and the reconciliations herein to the most directly comparable GAAP measures, provide useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company. The computation of non-GAAP measures may not be comparable to similarly titled measures reported by other companies, thus limiting their use for comparability. Article content Pro Forma Adjusted EBITDA Article content is defined as pro forma net income attributable to common shareholders, which incorporates the results of CMS prepared in accordance with the requirements of Article 11 of Regulation S-X, adjusted for pro forma interest expense and other, net, pro forma provision for income taxes, pro forma depreciation and amortization, and excludes the following discrete pro forma items: Article content Acquisition, transaction, and integration costs – Represents acquisition, transaction and integration costs, including severance, retention, and other adjustments related to acquisition and integration activities. Amortization of intangibles – Represents the amortization of intangible assets. Non-cash GAAP expense (gain) – Represents a non-cash goodwill impairment charge and a non-cash gain on acquisition of controlling interest. Loss on extinguishment of debt – Represents the write-off of debt discount and debt issuance costs as a result of debt modifications. Utilization of certain fair market value adjustments assigned in purchase accounting – Represents the periodic utilization of the fair market value adjustments assigned to certain equity method investments and non-controlling interests based on the remaining period of performance for the related contract. Share-based compensation – Represents non-cash compensation expenses recognized for share based arrangements. Article content Pro Forma Adjusted EBITDA Margin Article content is defined as Pro Forma Adjusted EBITDA divided by Pro Forma Revenues. Article content Pro Forma Adjusted Net Income Article content is defined as pro forma net income attributable to common shareholders, which incorporates the results of CMS prepared in accordance with the requirements of Article 11 of Regulation S-X, excluding the discrete pro forma items listed under Pro Forma Adjusted EBITDA and the related pro forma tax impacts. Article content Pro Forma Adjusted Diluted EPS Article content is defined as Pro Forma Adjusted Net Income divided by pro forma diluted weighted average number of common shares outstanding. Article content Net Leverage Article content is defined as GAAP total debt (excluding unamortized original issue discount and deferred financing costs) less cash and cash equivalents, divided by last twelve months Pro Forma Adjusted EBITDA, which is a non- GAAP measure. For FY25 Q3, Net Leverage was 3.5x, consisting of $4,560 million of total debt less $738 million of cash and cash equivalents, divided by the last twelve months Pro Forma Adjusted EBITDA of $1,081 million. Article content The following table presents the unaudited pro forma combined reconciliation of Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDA Margin, Pro Forma Adjusted Net Income and Pro Forma Adjusted Diluted EPS to the most directly comparable pro forma measures for the Company, including CMS, for the three months ended June 28, 2024: Article content For the Three Months Ended June 28, 2024 Pro Forma results Acquisition, transaction and integration costs Amortization of intangibles Loss on extinguishment of debt Utilization of fair market value adjustments Share-based compensation Pro Forma Non-GAAP results Revenues $ 3,490 $ — $ — $ — $ — $ — $ 3,490 Operating income $ 112 $ 9 $ 132 $ — $ — $ 2 $ 255 Non-operating expenses, net (83 ) — — 3 — — (80 ) Income before income taxes 29 9 132 3 — 2 175 Provision for income taxes 1 (9 ) (2 ) (31 ) (1 ) — — (43 ) Net income including non-controlling interests 20 7 101 2 — 2 132 Less: net income attributable to non-controlling interests (3 ) — — — (4 ) — (7 ) Net income (loss) attributable to common shareholders $ 17 $ 7 $ 101 $ 2 $ (4 ) $ 2 $ 125 Basic and diluted income (loss) per share attributable to common shareholders $ 0.07 $ 0.03 $ 0.41 $ 0.01 $ (0.02 ) $ 0.01 $ 0.51 Basic and diluted weighted average shares outstanding 243 243 243 243 243 243 243 Net income (loss) attributable to common shareholders $ 17 $ 7 $ 101 $ 2 $ (4 ) $ 2 $ 125 Net income margin 2 0.5 % 3.6 % Depreciation expense 9 — — — — — 9 Amortization of intangibles 132 — (132 ) — — — — Interest expense and other, net 80 — — — — — 80 Provision for income taxes 9 2 31 1 — — 43 EBITDA (non-GAAP) $ 247 $ 9 $ — $ 3 $ (4 ) $ 2 $ 257 EBITDA margin 7.1 % 7.4 % 1 – Calculation uses a full year estimated statutory rate on each non-GAAP tax deductible adjustment, unless the nature of the item requires application of specific tax treatment for related impacts. 2 – Calculated as net income attributable to common shareholders divided by revenues. Article content AMENTUM HOLDINGS, INC. Article content The following table presents the unaudited pro forma combined reconciliation of Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDA Margin, Pro Forma Adjusted Net Income and Pro Forma Adjusted Diluted EPS to the most directly comparable pro forma measures for the Company, including CMS, for the nine months ended June 28, 2024: Article content For the Nine Months Ended June 28, 2024 Pro Forma results Acquisition, transaction and integration costs Amortization of intangibles Loss on extinguishment of debt Utilization of fair market value adjustments Share-based compensation Pro Forma Non-GAAP results Revenues $ 10,293 $ — $ — $ — $ — $ — $ 10,293 Operating income $ 345 $ 20 $ 389 $ — $ — $ 7 $ 761 Non-operating expenses, net (250 ) — — 3 — — (247 ) Income before income taxes 95 20 389 3 — 7 514 Provision for income taxes 1 (4 ) (9 ) (110 ) (1 ) — — (124 ) Net income including non-controlling interests 91 11 279 2 — 7 390 Less: net income attributable to non-controlling interests (4 ) — — — (14 ) — (18 ) Net income (loss) attributable to common shareholders $ 87 $ 11 $ 279 $ 2 $ (14 ) $ 7 $ 372 Basic and diluted weighted average shares outstanding 243 243 243 243 243 243 243 Net income (loss) attributable to common shareholders $ 87 $ 11 $ 279 $ 2 $ (14 ) $ 7 $ 372 Net income margin 2 0.8 % 3.6 % Depreciation expense 29 — — — — — 29 Amortization of intangibles 389 — (389 ) — — — — Interest expense and other, net 247 — — — — — 247 Provision for income taxes 4 9 110 1 — — 124 EBITDA (non-GAAP) $ 756 $ 20 $ — $ 3 $ (14 ) $ 7 $ 772 EBITDA margin 7.3 % 7.5 % 1 – Calculation uses a full year estimated statutory rate on each non-GAAP tax deductible adjustment, unless the nature of the item requires application of specific tax treatment for related impacts. 2 – Calculated as net income attributable to common shareholders divided by revenues. Article content Article content Article content Article content Article content Contacts Article content Investor Relations Contact Article content Nathan Rutledge Article content Article content IR@ Article content Media Contact Article content Article content Article content Article content
Yahoo
5 days ago
- Business
- Yahoo
Linde PLC (LIN) Q2 2025 Earnings Call Highlights: Record EPS and Operating Margin Amidst ...
EPS: $4.09, representing a 6% increase from the prior year. Operating Margin: 30.1%, an all-time quarterly high, increased by 80 basis points year-over-year. Operating Cash Flow: Grew 15% year-over-year. Return on Capital (ROC): 25.1%, leading the industry. Sales: $8.5 billion, a 3% increase over the prior year and 5% sequentially. Underlying Sales Growth: 1% over the prior year and 3% sequentially, excluding acquisitions and FX impacts. Volume Change: Down 1% from last year, with a 2% sequential increase. Acquisitions Impact: Lifted sales by 1% over the prior year. Capital Allocation: $6.5 billion deployed year-to-date, with $2.8 billion in investments meeting risk-reward criteria. Guidance for Q3 EPS: $4.10 to $4.20, representing 4% to 7% growth over last year. Full Year EPS Guidance: $16.30 to $16.50, indicating 5% to 6% growth, including a 1% currency tailwind. Warning! GuruFocus has detected 6 Warning Signs with LBTYA. Release Date: August 01, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Linde PLC (NASDAQ:LIN) achieved record quarterly EPS of $4.09 and an operating margin of 30.1%, despite a challenging macro environment. Operating cash flows grew by 15%, and the return on capital (ROC) of 25.1% continues to lead the industry. The sale of gas project backlog has doubled over four years, reaching $7.1 billion, with significant turnover and execution. Linde PLC (NASDAQ:LIN) has strong customer commitments in the space sector, supporting double-digit growth in commercial space launches. The company maintains a disciplined capital allocation policy, deploying $6.5 billion year-to-date, with a focus on investments that meet risk-reward criteria. Negative Points Volumes are down 1% from last year, primarily due to weaker base volumes in EMEA, offsetting contributions from the project backlog. Europe is expected to continue experiencing softening demand, particularly in Western Europe, with no catalyst for economic improvement this year. The electronics end market faces challenges, with helium pricing down high single digits due to oversupply, particularly in Asia. Linde PLC (NASDAQ:LIN) remains cautious about the economic outlook, with guidance reflecting potential economic contraction and currency volatility. The company faces challenges in Europe due to de-industrialization and potential plant closures, impacting long-term growth prospects. Q & A Highlights Q: Can you provide insights into the geographical and end-market performance expectations for the rest of the year? A: Sanjiv Lamba, CEO, explained that in the Americas, volumes are expected to be flat or slightly up, driven by resilient end markets like space launches, while Europe is likely to see continued demand softening, particularly in Western Europe. In Asia, China is expected to remain flat, with growth in EVs and electronics offset by weaker metals and chemicals. India shows strong growth potential, while the overall APAC region is expected to be flat. Q: Is there a risk of not achieving future price increases given the current weak macroeconomic environment? A: Sanjiv Lamba, CEO, stated that Linde has consistently achieved positive pricing over the last 25 years, even through economic cycles. He expects this trend to continue, with pricing tracking globally weighted CPI, except for some challenges in China, particularly with helium pricing. Q: Can you explain the margin performance in the Americas compared to other segments? A: Matthew White, CFO, noted that while margins in the Americas were flat year-over-year, there is room for improvement. He attributed the flat margins to some mix effects, including home care, and emphasized the importance of tracking full-year performance rather than focusing on quarterly fluctuations. Q: What is the outlook for Linde's project backlog given the current macroeconomic conditions? A: Sanjiv Lamba, CEO, expressed confidence that Linde's project backlog will end the year with a "7" handle, despite starting up $1 billion of investments in the second half. He highlighted a strong opportunity pipeline and expects to bring in enough projects to maintain the backlog above $7 billion. Q: How is Linde positioned in the space industry, and what is the growth potential? A: Sanjiv Lamba, CEO, highlighted that Linde is well-positioned in the space industry, supplying more than four out of five launches in the US. The company has invested significantly in infrastructure to support the space ecosystem, with revenue from the commercial space segment quadrupling over the last three years. Linde expects continued growth in this sector. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22-07-2025
- Business
- Yahoo
Galp Energia SGPS SA (GLPEF) Q2 2025 Earnings Call Highlights: Strong Production and Upgraded ...
Upstream Production: 113,000 barrels per day. Full-Year Production Guidance: Upgraded to 105,000 to 110,000 barrels per day. Full-Year Group EBITDA: Expected to surpass EUR 2.7 billion, revised upwards from EUR 2.5 billion. Operating Cash Flow: Expected to be over EUR 1.8 billion. Release Date: July 21, 2025 Warning! GuruFocus has detected 1 Warning Sign with BOM:532505. For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Galp Energia SGPS SA (GLPEF) reported a strong second quarter with higher-than-anticipated Upstream production and increased LNG trading flexibility. The company upgraded its full-year production guidance to a range of 105,000 to 110,000 barrels per day. Full-year group EBITDA is now expected to surpass EUR2.7 billion, an upward revision from EUR2.5 billion. Operating cash flow is now expected to be over EUR1.8 billion, reflecting strong cash generation. The company received non-binding offers from credible players for its Namibia partnership, indicating progress in securing a strong partnership. Negative Points The company faced headwinds from dollar depreciation, impacting financial performance. CapEx is expected to be heavier in the second half of 2025, particularly in Industrial low-carbon projects. There is uncertainty regarding the timeline for the Namibia farm-out process, with completion expected by year-end. The company is not guiding on net debt levels by the end of the year, indicating potential financial uncertainty. Galp Energia SGPS SA (GLPEF) faces challenges with the special energy tax in Portugal, with ongoing discussions and potential legal disputes. Q & A Highlights Q: Can you clarify the impact of Bacalhau on the upgraded production guidance and comment on CapEx expectations? A: Bacalhau is expected to contribute very little, around 3,000 barrels, to production this year. The guidance upgrade is based on strong performance from our existing fleet. CapEx for 2025 has been revised to below EUR1 billion, with a heavier second half expected due to increased investments in low-carbon projects and renewables. (Maria Carioca, Co-CEO & CFO) Q: Could you elaborate on the midstream performance and the timeline for the Namibia farm-out? A: The midstream strength is largely due to receiving three cargos from Venture Global, contributing significantly to earnings. We expect to receive 10 cargos in total this year. Regarding Namibia, we aim to finalize the farm-out by year-end, focusing on securing a strong partnership with an experienced operator. (Joao Diogo, Co-CEO & EVP Commercial; Maria Carioca, Co-CEO & CFO) Q: What is the hedging strategy for Venture Global volumes, and how does this affect shareholder returns? A: We have no material long-term hedges for Venture Global volumes. Our distribution policy remains steady, focusing on maintaining flexibility and optionality, with no immediate changes planned despite a strong balance sheet. (Joao Diogo, Co-CEO & EVP Commercial; Maria Carioca, Co-CEO & CFO) Q: Can you provide insights into the production profile for Bacalhau in 2026 and net debt expectations? A: Bacalhau's production ramp-up is expected to take over a year, with plateau production not anticipated in 2026. Net debt is not expected to fluctuate significantly, with some working capital effects expected to flow through by year-end. (Maria Carioca, Co-CEO & CFO) Q: What are the key drivers behind the strong midstream performance, excluding Venture Global? A: The strong performance is due to increased flexibility in gas trading and strong results across all commodities, including oil and power. Our positioning in Iberia and Brazil also contributes to this success. (Joao Diogo, Co-CEO & EVP Commercial) Q: How do you view the development concept for Mopane in Namibia, and what are the next steps in the partnership process? A: The development concept for Mopane is not yet finalized and will be developed in partnership discussions. We are currently analyzing non-binding offers and will engage in bilateral conversations to assess alignment with potential partners. (Maria Carioca, Co-CEO & CFO) Q: What is the outlook for Refining margins in the second half of the year, and is there any update on the Spanish blackout impact? A: Refining margins are expected to remain strong, supported by diesel and jet fuel. We maintain our guidance due to planned maintenance in Q4. The Spanish blackout impact is still under review, with no clear resolution yet. (Joao Diogo, Co-CEO & EVP Commercial) Q: Can you provide an update on the Mozambique capital gains assessment and contingent payments? A: We are in discussions with the Mozambican government regarding capital gains assessments, prioritizing a diplomatic solution. Contingent payments include EUR100 million for Coral and $400 million for onshore development, expected in the near future and by 2026, respectively. (Joao Diogo, Co-CEO & EVP Commercial; Maria Carioca, Co-CEO & CFO) For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
