Markets have no fundamental laws, which is why they are so interesting https://t.co/1FSEbLhGFY ...

Well, my next guest says the latest tariff developments haven't changed his market playbook into year end. He sees tech and growth continuing to lead the S&P higher with opportunities broadening out as rate cut approach approach. Joining me now is Scott Croner, US equity strategist at city.Scott, you know, I'd love for you to just walk through what you think the market is reacting to here. At first blush, I thought, oh my gosh, stocks are going to sore because now we don't have potentially the handcuffs of ...

Markets have no fundamental laws, which is why they are so interesting https://t.co/vCI728tHXi ...

Financial Data and Key Metrics Changes - The company reported first quarter earnings per share of $1.33, an increase from $1.19 in the same period of 2024, reflecting improved market fundamentals in marine transportation and strong demand for power generation [5][6] - Overall, inland marine transportation faced a 50% increase in delay days compared to the previous quarter, impacting financial performance [6][12] - Despite challenges, inland operating margins improved year over year, driven by higher pricing and cost management, maintaining around 20% margins [7][14] Business Line Data and Key Metrics Changes - Marine Transportation segment revenues were $476 million with an operating income of $87 million, resulting in an operating margin of 18.2% [12] - Inland marine revenues increased 2% year over year, primarily due to higher utilization and pricing, while coastal revenues decreased 6% year over year due to shipyard maintenance [14][15] - Distribution and Services segment revenues were $310 million, down 7% year over year, while operating income increased by approximately 3% [18] Market Data and Key Metrics Changes - Barge utilization rates in inland marine were in the low to mid 90% range, while coastal marine utilization was in the mid to high 90% range [7][8] - Spot prices for inland marine increased in the low single digits sequentially and in the high single digits year over year, with term contract prices also seeing mid single-digit increases [7][14] - In power generation, revenues decreased 23% year over year due to supply delays, but the backlog of projects remained healthy [18][19] Company Strategy and Development Direction - The company aims to capitalize on strong market fundamentals and drive shareholder value creation through strategic acquisitions and stock repurchases [31][32] - The outlook for the marine market remains strong, with expectations for inland revenues to grow in the mid to high single-digit range for the full year [27][28] - The company is focused on maintaining a balanced capital allocation approach, with capital expenditures expected to range between $280 million and $320 million for the year [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of core businesses and favorable market conditions, despite potential macroeconomic uncertainties [26][31] - The company anticipates continued strong demand for power generation products and services, offsetting weaknesses in oil and gas markets [29][30] - Management noted that while there are supply constraints, they expect to unwind working capital as orders shift in 2025 and beyond [23][30] Other Important Information - The company had total available liquidity of approximately $334 million as of March 31, with a net debt to EBITDA ratio just under 1.5 times [21][23] - The company repurchased $101.5 million in stock at an average price just over $101 during the quarter [22] Q&A Session Summary Question: Can you discuss the acquisition environment and opportunities? - Management indicated that the environment is more constructive for acquisition opportunities compared to the past few years, with a focus on consolidating marine acquisitions [36][38] Question: What is the outlook for margins in the Distribution and Services segment? - Management noted that margin improvements are expected due to strong lean processes, but there are mix issues affecting overall margins [39][40] Question: How are barge utilization and pricing trending? - Management confirmed that barge utilization exited the first quarter in the mid-90s, with spot pricing up sequentially and term contracts showing increases [49][51] Question: What are the impacts of tariffs and trade flows? - Management discussed potential short-term impacts from tariffs on engine pricing but noted that steel price increases could positively affect new barge costs [68][70] Question: What is the expectation for coastal margins moving forward? - Management expects coastal margins to improve as shipyard maintenance concludes, with a positive outlook for revenue generation [86][88]