Category: Company Earnings

As some have noted in comments giant ag cooperative CHS Inc. released their earnings for the year ending 8/31/2024 yesterday.

As I mentioned a time or two a few months ago I was expecting the company to have soft results–but in the case of CHS this means that while earnings are down a bunch year over year it doesn’t mean they are losing money.

Revenues were off around 10-15% on the year and net income fell from a giant sized $1.9 billion in 2023 down to $1.1 billion. The lower earnings isn’t exactly ‘chump change’ (my apologies to any chumps out there) and we should all know by now that earnings swing by quite a bit depending on the ag economy and more so the energy markets as they derive a huge percentage of earnings from their refinery operations–in fact pretax earnings in energy were down over $600 million for the year.

Their press release is here. Their 10K filing can be found here.

The company has 5 outstanding preferred issues – all of which sell for a premium for $25 liquidation.

We have had a few earnings of interest released in the last couple days. In particular–

Eagle Point Income (EIC)–a closed end fund–CLO owner.

Eagle Point Credit Company (ECC)–a closed end fund–CLO owner.

MidCap Financial Investment (MFIC)–a business development company (BDC)

I own some term preferreds and baby bonds from these companies so I like to give a glance to check on Net Asset Values since NAV will tell one a lot.

ECC saw a drop of NAV from $9.21 down to $8.75–larger than I would like to see, but honestly for a CLO owner it is not frightening.

MidCap Financial is finally starting to perform like I had hoped they would–solidly. Their NAV held fairly flat–at $15.38 versus a previous of $15.42–very solid. The company did merge with 2 other Apollo funds so financials are not as clean as normal, but they did become a much larger BDC with assets of around $2.5 billion. The company is paying a nice 38 cent quarterly dividend and just declared a 20 cent ‘special’.

The standout performer of the 3 was Eagle Point Income (EIC) which owns primarily (66% last I calculated) of debt tranches of collateralized loan obligations (CLO). While paying a healthy dividend they were able to grow NAV from $15.12 to $15.24. For any CLO owner to grow NAV while paying a good common dividend (15%+/-) is spectacular.

I am going to ponder adding either to my current EIC 7.75% term preferred (EICB) or initiating a new position in their newer 8% issue (EICC). We’ll see if it fits my allocation plans.

Giant Ag cooperative CHS reported softened financials yesterday. Net income came in at $297 million versus $548 million is the year ago quarter. For the 9 month period earnings were $990 million versus $1.6 billion last year.

Both energy and ag sector earnings were down. Typically weakness in one sector would be balanced by strength in the other sector. Obviously while this quarter was weak relative to a year ago total earnings are still at a billion dollar earnings run rate.

The press release is here.

The 10q can be read here.

We have had the ‘big’ banks reporting their earnings, but the smaller players start reporting in a few days and it will be interesting to see how it plays out. These issues have preferreds and baby bonds outstanding.

Here are some earning release dates that are known -(not all I’m sure). Dates are from Trading View.

Bank of OZK 7/20/2023

Customers Bancorp 7/27/2023

Bridgewater Bank 7/26/2023

Zions Bancorp 7/19/2023

Merchants Bancorp 8/1/2023

Valley National 7/27/2023

ConnectOne Bank 7/27/2023

Dime Community 7/28/2023

Ocean First 7/20/2023

Associated Bancorp 7/20/2023

Mainstreet Bancorp 7/19/2023

Citizens Financial 7/19/2023

Heartland Financial 7/24/2023

United Community 7/18/2023

Texas Capital Bancshares 7/20/2023