Icahn Enterprises shares fall 14% as majority-owned CVR Energy suspends its dividend

By Ciara Linnane

CVR is a core holding company of Carl Icahn’s investment arm

Shares of Icahn Enterprises LP fell 14% on Tuesday after CVR Energy Inc., in which it owns a 66% stake, said it would suspend its third-quarter dividend as unplanned outages and a weak macro environment hurt profits put pressure on.

Shares of CVR (CVI) fell 26%, putting it on track for its biggest percentage drop on record if losses continue.

The company, which specializes in renewable fuels and petroleum refining as well as nitrogen fertilizers, posted a net loss of $124 million, or $1.24 per share, for the quarter, after posting a profit of $353 million, or $3.51 per share, for the year. earlier period.

Adjusted for one-time items, the company’s loss per share was 50 cents, wider than the FactSet analyst loss consensus of 9 cents.

Revenue fell to $1.833 billion from $2.522 billion a year ago, also below the FactSet consensus of $1.910 billion.

Profits from the refining operations were negatively impacted by “reduced refining throughput attributable to unplanned downtime at both facilities, driven in part by external power outages during the quarter,” Chief Executive Officer Dave Lamp said in prepared remarks.

“The board’s decision to suspend the quarterly dividend reflects concerns about how long the current margin environment will last in light of the company’s major planned turnaround at its Coffeyville refinery in the first quarter of 2025.”

The petroleum segment posted a loss of $110 million for the quarter, after posting a profit of $460 million a year ago. Refining margin was $253 per barrel, down from $31.05 a year ago.

The nitrogen fertilizer segment had net income of $4 million, compared to $1 million a year ago. Revenue fell from $131 million to $125 million.

The company ended the quarter with $534 million in cash and equivalents, while debt and lease obligations stood at $1.6 billion at the end of the quarter.

The grim earnings figures and dividend suspension are bad news for billionaire Carl Icahn’s investment arm (IEP). CVR Energy is a core holding company of IEP, majority owned by Icahn and his son Brett.

The company provides exposure to Icahn’s personal portfolio of public and private companies, including auto parts manufacturers, food packaging companies and real estate, in addition to energy companies. The participants are mainly private investors.

The stock is down 22% so far this year after a tough 2023 when it was the target of a damning report from short seller Hindenburg Research, which claimed it had overestimated the value of certain assets and was unable to recover them to pay. -then quarterly dividend of $2 per share. It also revealed that Icahn himself had made billions of dollars in personal loans against shares or units he owned in Icahn Enterprises.

From the archives (May 2023): Carl Icahn refutes the report from short seller Hindenburg Research. It has already cost his company $6 billion in market capitalization.

Further details (May 2023): Carl Icahn admits he was wrong to take a huge short position on the market that lost $9 billion

-Ciara Linnane

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