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Tesla Inc (NASDAQ: TSLA) – the electric vehicle and battery manufacturer famously helmed by Elon Musk – has just reported its earnings for the quarter ending 30 September 2021.

Tesla is one of the most widely followed shares in the world for a number of reasons.

It’s an undisputed corporate leader in the fight against climate change, with its stable of zero-emissions vehicles and solar battery technology for one.

Musk’s eccentric leadership style is another. Although Musk has made some controversial statements and moves in the past, most investors can’t deny his achievement in steering Tesla to become the first new global automotive heavyweight in decades.

And of course, we have the Tesla share price itself. Tesla really exploded into the investing consciousness when its shares went on a rip-roaring run a few years ago. Tesla shares are up an incredible 1,500% over the past 2 years alone, more than enough to draw the attention of a few eyeballs.

So, how did this company go in the latest quarter?

Tesla drives through to record deliveries

Well, in terms of deliveries, unquestionably well. Tesla reported global deliveries of 241,300 vehicles for the quarter, a new all-time record for the company.

In terms of revenue, Tesla reported US$13.8 billion in sales. That’s up from US$11.96 billion in the previous quarter, and a 57% increase year on year (YoY).

Total gross profits were US$3.66 billion, up from US$2.88 billion in the prior quarter, and up 77% YoY.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) hit US$3.2 billion. That was up from US$2.49 billion in the previous quarter, and also up 77% YoY.

In terms of earnings per share (EPS), Tesla reported positive earnings of US$1.86 per share (non-GAAP). That’s a whopping 145% increase YoY from the 76 US cents per share the company reported 12 months ago.

Tesla’s automotive gross margin also widened, going from 8.4% last quarter (and 27.7% in 2020’s third quarter) to 30.5%.

Batteries supplement electric vehicle growth

Turning to Tesla’s energy storage division, and the company posted some gains here too. Tesla reported that its energy storage deployments increased by 70% YoY for the quarter.

The company highlighted its recent announcement that it will be building a new Megapack (industrial-scale battery) factory with the capacity for 40-gigawatt hours of storage annually. In the past 12 months, the company deployed 3 GWh worth of Megapack storage.

In terms of outlook, Tesla is expecting to “achieve 50% average annual growth in vehicle deliveries … over a multi-year horizon” going forward.

The company is also expecting to start production of Model Y vehicles at its new factories in Austin, Texas in the US and Berlin, Germany by the end of the year. It also stated that it’s “making progress on the industrialisation of Cybertruck”.

The Tesla share price last closed at US$865.80 and US$851.59 in after-hours trading.

At that share price, Tesla has a market capitalisation of US$857.16 billion with a price-to-earnings (P/E) ratio of 452.7.

The post Tesla (NASDAQ:TSLA) breaks record for cars delivered in September quarter appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Share in the Cimic Group Ltd (ASX: CIM) are gaining field position today after the company released its financial results for the 9 months ended 30 September 2021.

At the time of writing, the Cimic share price is trading 7.98% higher at $22.32.

Cimic share price gains on strong sales and profit growth

Key investment highlights from Cimic’s earnings report include:

• Group revenue growth of 9.2% year on year (YoY) to $10.9 billion
• Other revenue increase of 6.8% YoY to $7.1 billion
• Earnings before interest, tax, depreciation and amortisation (EBITDA), profit before tax (PBIT) and net profit after tax (NPAT) margins held at 9.6%, 5.1% and 4.3% respectively, despite Q3 FY21 COVID-19 impacts
• Operating cash flow pre-factoring improvement of $351 million from the year prior
• Strong liquidity position of $4 billion, with credit rating reaffirmed as Baa2/outlook stable (investment grade) from Moody’s rating service.

What happened this reporting period for Cimic?

The construction and mining company landed $16 billion of new work in the 9 months to September 30, thereby increasing its work in hand (WIH) to more than $35 billion – up 17% YoY.

Of this amount, $5.6 billion was awarded in Q3 alone, which represents a “significant recovery from 2020 and continuing, and well ahead of pre-COVID levels”.

Cimic advised it also has around $450 billion in its pipeline of relevant tenders to be both bid on and awarded, including more than $100 billion of public-private partnership (PPP) opportunities.

In addition, it was a strong 9 months on the profitability front for the company, which grew revenue by more than 9% YoY.

On this base, Cimic improved its operating cash flow pre-factoring by $351 million over the prior year, with the company’s “strategic reduction of factoring now complete”.

This carried through to NPAT of just over $300 million after the company strategically rebalanced its working capital financing.

As a result, the company’s EBITDA cash conversion pre-factoring in the last 12 months was 40%, 73% without Leighton Asia.

Cimic also exited the quarter with $4 billion in available liquidity, after a $481 million factoring unwind and $187 million dividend payout to shareholders.

What did management say?

CIMIC Group executive chair and CEO Juan Santamaria said:

CIMIC delivered strong operational performance in the nine months to September, led by the performance of Australian Construction and Services. The result was achieved amid COVID-related shutdowns in New South Wales, Victoria and New Zealand, indicating the resilience of our business and effective management of operations throughout the pandemic.

Regarding the optimisation of how the company uses working capital, Santamaria added:

We have completed the strategic reduction of our use of working capital financing to a stable level and liquidity remains strong at $4 billion, with an extended maturity profile and diversified sources of funding.

What’s next for Cimic?

The outlook for Cimic’s core business remains positive, with “numerous stimulus packages announced by governments in core construction and service markets with additional opportunities through strong PPP pipeline”.

As such, management gave colour on FY21 guidance in the release, where it forecasts NPAT in the range of $400 to $430 million.

It also hopes to integrate the recent acquisition of Innovative Asset Solutions into its portfolio to help drive margins and add additional group revenue.

The Cimic share price has struggled this year to date. Having posted a loss of 0.8% over the last 12 months, the company now finds itself 8.45% in the red since January 1.

The post Here’s why the Cimic (ASX:CIM) share price is up 8% on Thursday appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Whitehaven Coal Ltd (ASX: WHC) share price is posting further losses on Thursday. This comes as Chinese policymakers look to stabilise surging coal prices.

At the time of writing, the Whitehaven Coal share price is down 2.62% to $2.97.

China’s NDRC to clamp down on coal industry

China’s National Development and Reform Commission (NDRC) said in a statement on 19 October it may adopt “limited profit rates, set price limits and implement other interventional mechanisms such as price declaration system and price adjustment filing system to stabilise thermal coal prices,” according to S&P Global.

“The current price increase has completely deviated from the fundamentals of supply and demand, and the heating season is approaching, and the price is still showing a further irrational upward trend,” the statement said.

Similar to the NDRC’s response to surging iron ore prices, it said it will increase inspections and crack down on illegal activities such as spreading misinformation, price collusion, and hoarding.

Iron ore prices have fallen off a cliff following weak demand from China. However, coal demand is expected to remain elevated ahead of China’s winter and spring seasons.

“There might be some correction but there won’t be a steep drop in prices because China is short on coal [supply]. A steep drop is likely to be seen early next year and not now when it is winter,” said a Singapore-based trader, as reported by S&P Global.

Nonetheless, China’s action has spooked coal investors. Other ASX-listed producers including Yancoal Australia Ltd (ASX: YAL) and New Hope Corporation Limited (ASX: NHC) have also seen their share prices fall. They are down 2.87% and 1.26% respectively.

Whitehaven Coal share price slides to 1-month low

The Whitehaven Coal share price has so far tumbled 8.6% this week and today hit a 1-month low of $2.91 during early trade.

Investors are likely trying to price-in the impact of China’s intervention on its coal markets. After all, China managed to halve iron ore prices following tightening property credit, its Evergrande debt crisis, and weak infrastructure growth.

The post Whitehaven Coal (ASX:WHC) share price falls as China intervenes in coal market appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Last week, we took a look at the latest exchange-traded fund (ETF) that looks set to join the ASX boards. ETF provider BetaShares has announced that the ASX boards will soon be graced with the ASX’s first ever cryptocurrency-based ETF. It will be known as the BetaShares Crypto Innovators ETF (ASX: CRYP) and will give investors a way to invest in the ‘blockchain economy’.

As we covered last week, this ETF will be investing in a “portfolio of leading global companies at the forefront of the crypto ecosystem”. BetaShares tells us that this ETF will be designed to “capture the full breadth” of said ecosystem. It will do so by tracking an index that holds a “focused portfolio of more than 230 leading crypto innovators”.

We don’t know too much more than that at this stage. Aside from a teaser that this portfolio currently holds 3 crypto-based companies. These are Coinbase Global Inc (NASDAQ: COIN), Riot Blockchain Inc (NASDAQ: RIOT) and MicroStrategy Incorporated (NASDAQ: MSTR).

BetaShares Crypto Innovators ETF (CRYP) set to hit the ASX ‘soon’

Importantly, this CRYP ETF will not be holding cryptocurrency assets directly. So one won’t be able to use CRYP for direct exposure to cryptocurrencies like Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH) or Dogecoin (CRYPTO: DOGE).

BetaShares has said this has been done partly to save investors from the “complications of holding digital assets directly”. Instead, the CRYP ETF’s portfolio will give exposure to the companies that are involved in “building crypto mining equipment, crypto trading venues, and other key services that allow the crypto economy to thrive”.

This is in stark contrast to a recent ETF listing over in the US. This new fund does give investors a more direct opportunity to invest in the digital coins themselves, albeit using futures contracts. My Fool colleague Bernd went through this new ETF and its launch in depth yesterday.

So when will ASX investors finally get a chance to invest in the new BetaShares CRYP ETF?

Well, according to the provider, all we are getting at the moment is “soon”. BetaShares implies on its website that the Crypto Innovators ETF has yet to receive “final regulatory approval”. So the launch of this ETF is presumably hinging on that.

I’m sure they’ll be some investors who are champing at the bit. Bitcoin just hit a new all-time high overnight of over US$66,000 per coin. It’s up an incredible 62% over just the past month alone.

The post When will the BetaShares Crypto Innovators ETF (CRYP) list on the ASX? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns shares of Bitcoin, Coinbase Global, Inc., and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended MicroStrategy. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The BrainChip Holdings Ltd (ASX: BRN) share price is sharply rebounding to a new monthly high following a number of company releases.

At the time of writing, the artificial intelligence (AI) technology company’s shares are up 9% to 49 cents. This means that in the past week, the BrainChip share price has risen by 21.25%.

In earlier trade on Thursday, the BrainChip share price reached 52 cents, up 15% on yesterday’s close.

What did BrainChip announce?

On Thursday morning, BrainChip provided investors with a raft of announcements that are pushing the share price higher.

The first release stated that the company will now begin taking orders of two Akida AI processor development kits. This includes the X86 Shuttle PC development kit as well as an ARM-based Raspberry Pi development kit. Both kits use the AKD1000 chip on a mini-PCI board.

BrainChip’s offering enables customers to begin internal testing and evaluation of Akida’s “high-performance and ultra-low power AI chip”.

BrainChip September quarter update

In the following update, the company released its quarterly activities report for the period ending 30 September.

Receipts from customers for the quarter were US$0.1 million, a decrease of 42% from US$0.2 million in Q2 FY21. While this may appear negative, BrainChip noted that it expects to release the Akida production units and boards to customers in Q4, potentially leading to increased revenues.

Net operating cash outflows came to US$4 million, up from US$3.1 million in Q2 FY21.

BrainChip declared a cash balance of US$23.9 million compared to US$17.7 million in the prior quarter.

BrainChip CEO, Peter van der Made, commented:

The September Quarter marked another major milestone for BrainChip. With the delivery of the first batch of production Akida chips from our design partner Socionext, BrainChip is the world’s first commercial producer of a neuromorphic artificial intelligence chip.

The Company’s two major objectives as we move forward are to focus on building out our sales and marketing organization in preparation for the official commercial launch of the AKD1000 chip and to continue investing in the R&D necessary to bring the next generation of Akida products to market in order to maintain our competitive advantage.

Fifth foundational patent secured

The third release from BrainChip advised that the United States Patents and Trademarks Office has granted another patent.

Titled “Spontaneous Machine Learning and Feature Extraction”, the patent is the fifth foundational patent awarded to BrainChip since 2008.

The patent is intended to protect the unique ability of the Akida chip to learn in real-time, rather than being trained with many samples.

BrainChip stated that intellectual property (IP) security remains a strong focus for preserving its global competitive advantage.

The company is the world’s first commercial producer of neuromorphic AI chips (Akida1000).

BrainChip share price snapshot

The BrainChip share price has gained 27% over the past 12 months and 12% so far in 2021.

BrainChip shares reached a 52-week high of 77 cents in March 2021 then began moving in circles.

BrainChip has a market capitalisation of about $821 million with almost 1.7 billion shares on its registry.

The post Why the BrainChip (ASX:BRN) share price is rocketing 15% today appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Robinhood Markets (NASDAQ: HOOD) has added new users at a high rate over the past few years. For the second quarter, net cumulative funded accounts more than doubled to 22.5 million year over year. But the online trading platform could face mounting competition from PayPal Holdings (NASDAQ: PYPL), which just recently launched a new version of its digital app, complete with shopping tools, bill payment, and financial services, in addition to cryptocurrency trading. 

Here’s a look at what PayPal is offering and why it could steal Robinhood’s thunder.  

PayPal is building the ultimate financial services app

Right now, PayPal and Robinhood are two different apps, serving two different groups of customers. PayPal’s app is centered around daily cash management, where you can pay bills, send money to friends, and browse deals from leading retailers. Robinhood is primarily focused on serving long-term investors, traders, and cryptocurrency investors. In the second quarter, Robinhood saw a larger share of new customers trading cryptocurrency rather than stocks for the first time. 

But make no mistake, both companies are on a collision course going after the same market. Robinhood already offers basic cash management features, such as a debit card and the ability to pay bills and receive direct deposits. It’s a sign of where these free trading apps and digital wallets are headed. Juniper Research estimates that the number of people using digital wallets will double to 4.4 billion by 2025. Over time, many people will likely gravitate to one “super” app that does it all — peer-to-peer payments, shopping, bill payment, and investing.

The problem for Robinhood is that PayPal already has a massive installed base of users to easily promote the financial service features of its own app. PayPal ended the second quarter with 403 million active accounts, along with 32 million merchant accounts, which is miles ahead of Robinhood’s 22.5 million. As PayPal continues to launch new features on its app that mirror what these stock trading apps are doing, Robinhood may have a steep uphill climb on its hands. Robinhood’s recent momentum stems from more people trading cryptocurrency, but PayPal is one of the few apps that lets users shop at leading retail brands with their cryptocurrency balance. 

What’s more, PayPal said it plans to launch new investment capabilities on its app in the coming quarters, along with a high-yield savings account option through Synchrony Financial. PayPal’s ability to combine all these features, allowing users to seamlessly use their money to trade cryptocurrency, buy stocks, and take advantage of promotional retail offers in one app might be too much for Robinhood to match in the long run. 

Too much uncertainty in Robinhood’s future

Robinhood still has some ways it can differentiate itself. It is starting to roll out 24/7 phone support and prioritizing investing in educational content. Robinhood also introduced IPO Access earlier this year, allowing users to invest in newly listed companies at their IPO prices. It’s unclear whether PayPal’s new investment offering will be as robust as Robinhood’s app or will be a simplified stock trading interface like Square‘s Cash App.

However, there’s nothing preventing PayPal from eventually offering some of the same features as Robinhood. After all, PayPal has got plenty of cash to reinvest in new features. Over the last year, it generated $4.8 billion in profit, while Robinhood reported half a billion in net losses in the second quarter.  

Beyond the looming threat from PayPal, new regulation by the Securities and Exchange Commission is a risk for Robinhood given its reliance on the controversial “payment for order flow” business model.

Robinhood is facing double threats from the SEC and PayPal’s new app that could make it more difficult for Robinhood to win new users. I would be cautious about paying a high price-to-sales ratio of 21 for Robinhood shares right now. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Robinhood Should Worry About PayPal’s New Payments App appeared first on The Motley Fool Australia.

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John Ballard has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Epsilon Healthcare Ltd (ASX: EPN) share price is off to the races today, currently up 20% at 15 cents apiece after hitting an intraday high of 16.5 cents at midday.

Below, we take a look at the new manufacturing agreement that appears to be spurring investor interest in the ASX medicinal cannabis company.

What new manufacturing agreement was announced?

Epsilon Healthcare’s share price is soaring after the company reported it has executed a binding term sheet and manufacturing agreement with Cannim Australia Pty Ltd.

Cannim, established in 2017, cultivates cannabis in Jamaica and Australia. The privately held company has engaged Epsilon as its Australian GMP manufacturing partner.

Epsilon’s Southport Facility in Queensland will produce medicinal cannabis products from marijuana supplied by Cannim for supply into Australian and global export. Epsilon will receive payment from Cannim for its manufacturing services on a per-order basis

The initial agreement runs for 2 years.

According to the release, the first cannabis derived dried flower products have already been delivered and are available to patients by Epsilon under Cannim’s HummingBud brand.

Under the binding term sheet, the companies have agreed to further collaboration and manufacture over next 2 years.

Management commentary

Commenting on the agreement, Epsilon Healthcare CEO Jarrod White said:

Matching our high-volume EU GMP compliant Southport Facility with Cannim’s high volume GACP Jamaican medicinal cannabis places both companies in a strong position to deliver significant volumes of high-quality medicines for both the Australian and global export markets.

The partnership contemplates all areas of the Epsilon value chain, from local import and handling of dried product expertise, to export, and assisting in the logistics and distribution of the final product. This is reflective of the significant progress and capability improvements at our Southport facility in the preceding 12 months.

Epsilon Healthcare share price snapshot

Despite today’s big boost, the Epsilon Healthcare share price remains down 36% year-to-date. By comparison the All Ordinaries Index (ASX: XAO) is up 12% so far in 2020.

The last month has been kinder to Epsilon Healthcare shareholders, with shares up 19% since 21 September.

The post Epsilon Healthcare (ASX:EPN) share price rockets 24% on new agreement appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. At the time of writing, the benchmark index is up 0.35% to 7,438.9 points.

Four ASX shares that are climbing more than most are listed below. Here’s why they are racing higher:

AMP Ltd (ASX: AMP)

The AMP share price is up 3.5% to $1.16. Investors have been buying the financial services company’s shares following the release of its third quarter update. According to the release, the AMP Capital business saw its assets under management (AUM) fall by $7.3 billion. However, this was largely due to the previously announced exit of the NZ wealth management (NZWM) mandate of $9.2 billion. Positively, average Australian Wealth Management AUM increased $3.7 billion to $132.4 billion.

Aristocrat Leisure Limited (ASX: ALL)

The Aristocrat Leisure share price is up 4.5% to $47.85. Investors have been buying the gaming technology company’s shares following the successful completion of the institutional component of its $1.3 billion entitlement offer. The company also revealed that a bookbuild for institutional entitlement offer shortfall shares cleared at a price of $47.10 per new share. This represents a premium of $5.25 to the offer price and a 2.8% premium to the Aristocrat share price prior to its trading halt. Aristocrat is raising funds to acquire London-listed leading global online gambling software and content supplier, Playtech, for $5 billion.

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price is up 9% to 48.5 cents. This follows the release of a few announcements by the artificial technology company. One of those reveals that it has now started to take orders for its Akida AI Processor Development Kits. Though, it is unclear if any orders have been received. In addition, the company was granted a patent in the US. The patent is for spontaneous machine learning and feature extraction.

Healius Ltd (ASX: HLS)

The Healius share price is up 7% to $4.87. This follows the release of a first quarter update which revealed explosive sales and earnings growth thanks to strong demand for COVID-19 testing. Healius advised that its first quarter revenue increased 43.7% to $689.9 million and its underlying EBIT grew 159% to $201.9 million. The company revealed it was averaging 40,000 COVID tests per working day during the period.

The post Why AMP, Aristocrat, Brainchip, and Healius shares are racing higher appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Santos Ltd (ASX: STO) share price is currently edging lower after a rollercoaster day so far, down 0.27% to $7.26 per share. It jumped as high as $7.32 at open then slumped to $7.21 before regaining some ground.

Below we take a look at the S&P/ASX 200 Index (ASX: XJO) energy company’s quarterly update for the period ending 30 September.

What were Santos’ Q3 highlights?

The Santos share price is edging lower despite the company reporting record quarterly sales revenue of US$1.14 billion, a 6% increase from Q2 figures.

Santos’ quarterly free cash flow also reached a new record, increasing by 33% from the previous quarter to US$359 million.

The company credited the record results to the lift in commodity prices during the reporting period along with its own “strong base business performance”.

As at the end of September, Santos had brought down its net debt, including leases, to US$3.1 billion and gearing dropped to 29.7%. At current commodity prices, Santos said it expects gearing to be less than 28% by the end of the year.

In the biggest news for the company during Q3, Santos and Oil Search Ltd (ASX: OSH) entered into a definitive agreement in September to merge the two companies in an all-scrip transaction.

Commenting on the merger, Santos CEO Kevin Gallagher said:

The proposed merger with Oil Search is on track for completion by year-end, subject to customary conditions including Oil Search shareholder approval. I’m very happy with how the merger is progressing, and particularly acknowledge the positive comments from PNG Prime Minister Hon. James Marape, at what is an incredibly important time for energy markets and energy companies around the world.

Size and scale have never been more important as we look to fund the energy transition to net-zero emissions, and the merger is expected to create one of the top-20 companies in our sector globally and a top-20 ASX-listed company.

The updated 2021 guidance doesn’t appear to have done much for the Santos share price. The company is maintaining production guidance, but boosting it to the upper end of its earlier forecast range. Production cost guidance, meanwhile, was reduced to the lower end of the earlier forecast.

Santos share price snapshot

The Santos share price has outperformed over the past 12 months, up 40% compared to a gain of 20% posted by the ASX 200 during that same time.

Over the past month, Santos shares are up 17%.

The post Santos (ASX:STO) share price wobbles despite record quarterly sales revenue appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The A2 Milk Company Ltd (ASX: A2M) share price is currently down amid news of a second class action against the company.

Another class action?

The company announced to the ASX that it’s aware of media reporting about a potential class action against the company that is apparently being investigated by Shine Justice Ltd (ASX: SHJ).

However, A2 Milk said it’s not aware of any legal proceeding having been filed by Shine Lawyers.

The company noted again that it believes it has, at all times, complied with disclosure obligations, denies any liability and will vigorously defend against any proceedings. It said it will respond further if and when any legal action is launched.

What are the allegations by Shine Lawyers?

The class action by Shine alleges that between 19 August 2020 and 7 May 2021, A2 Milk engaged in “misleading and deceptive” conduct, breaching its continuous disclosure obligations, and failing to adequately disclose future trade plans.

Shine also alleges that by 19 August 2020, A2 Milk was, or ought to have been aware that the FY21 guidance, and subsequent announcements, did not adequately take into account a number of factors known to the company which ultimately impacted the company’s financial performance. This led to a 62% drop in the A2 Milk share price.

There were two factors that A2 Milk referred to.

First, the decline in reseller/daigou sales, which reportedly fell due to the impact of A2 Milk’s sales through its cross border e-commerce channel. Shine noted that this saw A2 Milk heavily market English-labelled infant products directly into the Chinese market with discounting that “effectively undercut” sales in the daigou/reseller channel.

Second, Shine also referred to the decline in the CBEC business due to the drop in the daigou/reseller sales. Shine said that daigou sales often help stimulate demand for direct orders.

Two class actions

This is the second class action that A2 Milk is facing.

The lawyer group Slater & Gordon Limited (ASX: SGH) has also launched a class action. This occurred earlier in October.

Shine’s class action alleges similar sorts of things that the Slater & Gordon one does.

Slater & Gordon said:

The proceeding alleges that by no later than 19 August 2020, A2 Milk was or ought to have been aware that the FY21 guidance and subsequent representations did not adequately take account of a number of factors which would impact the company’s financial performance.

What is the latest guidance from A2 Milk?

FY21 has finished, but guidance for FY22 can have an impact on the A2 Milk share price.

In its FY21 result, A2 Milk said that its revenue fell 30.3% to $1.21 billion and net profit after tax (NPAT) had dropped 79.1% to $80.7 million.

Whilst the company said it wasn’t going to provide specific guidance, it said that it’s confident in the underlying fundamentals of the business and that the growth opportunity in core markets remains “significant”. The company also said there are opportunities for product innovation, category expansion and new markets. It said the long-term outlook is positive.

However, it also said that there is continuing uncertainty and volatility in consumer markets due to COVID-19, and other rapidly changing market dynamics, particularly in China.

The post A2 Milk (ASX:A2M) share price drops amid reported second class action appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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