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The stock market has been roaring for the past decade, with the S&P 500 (^GSPC) boasting an annualized return of 13%.

On Friday, Goldman Sachs (GS) published a research note projecting the next decade won’t be as friendly to investors in the benchmark index. The S&P 500 will deliver an annualized return of 3% over the next 10 years, Goldman projected, noting that more than a third of the index being concentrated in just 10 stocks has typically led to below-average returns.

But Goldman Sachs equity strategist Ben Snider told Yahoo Finance the headline projection isn’t as bearish as it may seem, nor is it a call to get out of stocks now.

“We remain very confident in the long-term outlook for US economic growth,” Snider said in an interview on Tuesday. “We remain very confident in the outlook for long-term corporate profit growth. We feel good about the long-term outlook for the average [S&P 500] stock. The concern that we have is that concentration is extremely high … And when we put that in our models, it points to low average returns.”

Right now, the 10 largest stocks in the S&P 500 represent more than a third of the index, putting market concentration near its highest level in 100 years, per Goldman. Using history as a guide, this has typically led to below-average returns for the following decade, Snider said.

This would likely happen through stocks that make up that large concentration in the index — like Nvidia (NVDA), Apple (AAPL), or Microsoft (MSFT) — falling off. And just as the “Magnificent Seven” tech stocks helped lead the market higher, in this scenario they’d lead the market lower.

“The idea here is you have a few stocks that have an unusually large representation of market cap,” Snider said. “And if their weight goes back to some kind of normal, that would weigh on the aggregate index as well.”

There isn’t a shock clearly in view that Goldman believes starts the decade of bad returns. That’s why the team sees the S&P 500 hitting 6,300 in the next 12 months. The issue for Goldman in its most recent exercise is that a decade is a long time.

“The longer your investment horizon, the more uncertain all the catalysts that will take place during that horizon,” Snider said. “And so just given the starting point of the concentration, history would tell us there is likely to be some catalyst over the next decade that causes that to revert.”

But he noted the caveat that the unwinding of market concentration “doesn’t need to happen within the next 10 years, and it doesn’t necessarily need to weigh on the equity market, because there could be dramatic strength from the rest of the equity constituents.”

Story Continues

Some on Wall Street don’t see that unwind happening anytime soon. DataTrek co-founder Nicholas Colas wrote in a note to clients Tuesday morning that 3% annualized returns or worse “only come when something very, very bad has occurred.”

The issue at hand is how long the current exceptionalism in the market, particularly in US tech giants, can last.

“The bottom line is that we believe the next decade will see S&P returns at least as strong as the long run average of 10.6 percent, and possibly better,” Colas wrote after detailing how continued gains in disruptive tech led by US companies could fuel the gains.

During a reporter roundtable on Monday, JPMorgan Asset and Wealth Management laid out an optimistic case for stocks over the next 10 years. But when asked about Goldman’s call for a 3% average annual return over the next decade, JPMorgan Wealth Management’s global head of multi-asset and portfolio solutions, Monica Issar, admitted Goldman’s team makes a fair point on the recent run-up in stocks, while adding the outlook for stocks still remains relatively strong.

“We are at higher starting points,” Issar said. “So we don’t want to shy away from that conversation. We want to make sure that people do understand that we are assuming [stock] multiple contractions.

“We’re just saying that that multiple contraction will be offset with healthier macro fundamentals over the next 10 years, with healthier corporate fundamentals over the next 10 years, and that foundation is a sturdier point in time for investors to allocate capital.”

Issaar’s point gets to the crux of what Snider says long-term-minded investors have been telling him after reading the report.

“It’s not that [investors are] bearish on equities,” Snider said. “In fact, they still are going to own US equities, but they’re just preparing themselves for lower returns over the next decade than the last decade.”

Snider added about his team’s view, “We are still very optimistic about the US equity market.”

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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Investors are using the recent pullback in the iShares 20+ Year Treasury Bond ETF (TLT) the biggest US Treasuries exchange-traded fund,to buy.

Last week $1.7 billion has flowed into the $60.3 billion fund, bringing its year-to-date inflows up to $11.5 billion.

The price of the ETF has fallen nearly 9% since it reached its 2024 high on Sept. 16—two days before the Fed slashed the federal funds rate by 50 basis points.

TLT has now given up nearly all of its summer rally and the ETF is down 3.7% since the start of the year.

A lot has changed since TLT put in its high in September. The U.S. economy seems to be on firmer footing: nonfarm payrolls expanded by a larger-than-expected 254,000 last month and Q3 GDP is on track to grow by 3.4% (according to the Atlanta Fed’s GDPNow model).

Stronger economic growth could mean fewer Fed rate cuts and potential upward pressure on consumer prices. Hence, the jump in the long-term interest rates and decline in TLT’s price.

The yield on the 30-year Treasury bond was last trading around 4.49%, the highest level since July and up from 3.93% on September 16. 

Still, rather than panicking, ETF investors seem to be using the rise in long-term interest rates and fall in TLT’s price as a buying opportunity.

In October, the fund has seen inflows in all but four trading sessions. Unlike in 2021 and 2022, investors don’t seem to be concerned with rates spiking dramatically higher.

Even if the economy remains strong and rates hold above 4% for now, it might make sense to allocate to TLT as a hedge against the economy turning down at some later point.

On the other hand, there has been some chatter about the upcoming presidential election being a risk for long-term bonds. If the new president enacts policies that reignite inflation, that could spell bad news for TLT.

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CALGARY, Alberta, Oct. 22, 2024 (GLOBE NEWSWIRE) — Pulse Seismic Inc. PSD PLSDF (“Pulse” or the “Company”) is pleased to report its financial and operating results for the three and nine months ended September 30, 2024. The unaudited condensed consolidated interim financial statements, accompanying notes and MD&A are being filed on SEDAR (www.sedar.com) and will be available on Pulse’s website at www.pulseseismic.com.

Today, Pulse’s Board of Directors approved a regular quarterly dividend of $0.015 per common share. The total dividend will be approximately $764,000 based on Pulse’s 50,904,663 common shares outstanding as of October 22, 2024, and will be paid on November 28, 2024, to shareholders of record on November 14, 2024. This dividend is designated as an eligible dividend for Canadian income tax purposes. For non-resident shareholders, Pulse’s dividends are subject to Canadian withholding tax.

“While Pulse’s third quarter sales were not as robust as in 2023, it is common in our business to have significant variances between quarterly and annual results, which is why we focus on keeping costs low and maintaining a strong balance sheet,” stated Neal Coleman, Pulse’s President and CEO. “Already in October, we have completed another $2.7 million in sales, bringing year to date total revenue to $20.5 million,” Coleman continued. “We have consistently generated positive quarterly free cashflow and remain committed to providing a significant return of capital to shareholders. Pulse has declared $0.10875 per share in dividends up to today and bought back nearly 1.7 million shares under the NCIB in the first three quarters of the year. Total capital returned to shareholders is approximately 92% of the shareholder free cashflow generated as of September 30, 2024,” he concluded.

HIGHLIGHTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

• A regular quarterly dividend of $0.015 per share and a special dividend of $0.05 per share were declared and paid in the third quarter. For the nine-month period, regular quarterly dividends totalled $0.04375 per share. Regular and special dividends declared and paid in the first three quarters of 2024 totalled $4.8 million;
• In the nine-month period ended September 30, 2024, Pulse purchased and cancelled, through its normal course issuer bid, 3.2% of the shares outstanding at December 31, 2023, for a total of 1,686,300 common shares at a total cost of approximately $3.7 million (at an average cost of $2.17 per common share including commissions);
• At September 30, 2024, Pulse was debt-free and held cash of $7.5 million;
• Shareholder free cash flow^(a) was $1.1 million ($0.02 per share basic and diluted) for the third quarter of 2024 compared to $2.8 million ($0.05 per share basic and diluted) for the comparable period in 2023. Shareholder free cash flow was $10.0 million ($0.19 per share basic and diluted) for the nine months ended September 30, 2024, compared to $13.9 million ($0.26 per share basic and diluted) for the nine months ended September 30, 2023;
• EBITDA^(a) was $1.1 million ($0.02 per share basic and diluted) for the three months ended September 30, 2024, compared to $3.3 million ($0.06 per share basic and diluted) for the three months ended September 30, 2023. EBITDA was $11.7 million ($0.23 per share basic and diluted) for the nine months ended September 30, 2024, compared to $16.8 million ($0.32 per share basic and diluted) for the nine months ended September 30, 2023;
• For the three months ended September 30, 2024, there was a net loss of $1.4 million ($0.03 per share basic and diluted) compared to net earnings of $393,000 ($0.01 per share basic and diluted) for the three months ended September 30, 2023. Net earnings for the nine months ended September 30, 2024, was $2.6 million ($0.05 per share basic and diluted) compared to net earnings of $6.7 million ($0.13 per share basic and diluted) for the nine months ended September 30, 2023; and
• Total revenue was $2.7 million for the three months ended September 30, 2024, compared to $5.1 million for the three months ended September 30, 2023. For the nine months ended September 30, 2024, total revenue was $17.8 million compared to $22.3 million for the nine months ended September 30, 2023.

^(a) The Company’s continuous disclosure documents provide discussion and analysis of “EBITDA”, “EBITDA per share”, “shareholder free cash flow” and “shareholder free cash flow per share”. These financial measures do not have standard definitions prescribed by IFRS and, therefore, may not be comparable to similar measures disclosed by other companies. The Company has included these non-GAAP financial measures because management, investors, analysts and others use them as measures of the Company’s financial performance. The Company’s definition of EBITDA is cash available to invest in growing the Company’s seismic data library, pay interest and principal on long-term debt when applicable, purchase its common shares, pay taxes and the payment of dividends. EBITDA is calculated as earnings (loss) from operations before interest, taxes, depreciation and amortization. EBITDA per share is defined as EBITDA divided by the weighted average number of shares outstanding for the period. The Company believes EBITDA assists investors in comparing Pulse’s results on a consistent basis without regard to non-cash items, such as depreciation and amortization, which can vary significantly depending on accounting methods or non-operating factors such as historical cost. Shareholder free cash flow further refines the calculation by adding back non-cash expenses and deducting net financing costs and current income tax expense from EBITDA. Shareholder free cash flow per share is defined as shareholder free cash flow divided by the weighted average number of shares outstanding for the period.
^(b) TTM EBITDA is defined as the sum of EBITDA generated over the previous 12 months and is used to provide a comparable annualized measure.
These non-GAAP financial measures are defined, calculated and reconciled to the nearest GAAP financial measures in the Management’s Discussion and Analysis.

OUTLOOK

So far in 2024, there have been a variety of factors influencing industry conditions which impact Pulse’s revenue generation. While land sales in Alberta at September 30, 2024 were approximately $300 million, down slightly from the $318 million for the same period in 2023, they remain significantly higher than in recent years going back to 2014. There are several notable infrastructure improvements which will lead to increased offtake capacity for Canadian oil and gas, such as the recent completion of the TMX pipeline expansion and the 2025 forecast completion of LNG Canada’s natural gas export facility. 2024 has also brought improvements in oil prices and an expectation by some for increasing natural gas prices in 2025. These positives, are offset by the factors that create uncertainty for the future, including economic, political, and environmental concerns. Pulse, as always, has low visibility regarding future seismic data library sales levels, regardless of industry conditions. The Company remains focused on business practices that have served throughout the full range of conditions. The Company maintains a strong balance sheet, has zero debt, no capital spending commitments, and a disciplined and rigorous approach to evaluating growth opportunities. This 15-person company, led by an experienced and capable management team, operates with a low-cost structure and focuses on developing excellent client relations as well providing exceptional customer service. Pulse’s strong financial position, high leverage to increased revenue in its EBITDA margin and careful management of its cash resources have resulted in the return of capital to shareholders through regular and special dividends and the repurchase of its shares.

CORPORATE PROFILE

Pulse is a market leader in the acquisition, marketing and licensing of 2D and 3D seismic data to the western Canadian energy sector. Pulse owns the largest licensable seismic data library in Canada, currently consisting of approximately 65,310 square kilometres of 3D seismic and 829,207 kilometres of 2D seismic. The library extensively covers the Western Canada Sedimentary Basin, where most of Canada’s oil and natural gas exploration and development occur.

For further information, please contact:
Neal Coleman, President and CEO
Or
Pamela Wicks, Vice President Finance and CFO
Tel.: 403-237-5559
Toll-free: 1-877-460-5559
E-mail: info@pulseseismic.com.
Please visit our website at www.pulseseismic.com

This document contains information that constitutes “forward-looking information” or “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities legislation. Forward-looking information is often, but not always, identified by the use of words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “forecast”, “target”, “project”, “guidance”, “may”, “will”, “should”, “could”, “estimate”, “predict” or similar words suggesting future outcomes or language suggesting an outlook.

The Outlook section herein contain forward-looking information which includes, but is not limited to, statements regarding:

By its very nature, forward-looking information involves inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. Pulse does not publish specific financial goals or otherwise provide guidance, due to the inherently poor visibility of seismic revenue. The Company cautions readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking information. These factors include, but are not limited to:

Pulse cautions that the foregoing list of factors that may affect future results is not exhaustive. Additional information on these risks and other factors which could affect the Company’s operations and financial results is included under “Risk Factors” in the Company’s most recent annual information form, and in the Company’s most recent audited annual financial statements, most recent MD&A, management information circular, quarterly reports, material change reports and news releases. Copies of the Company’s public filings are available on SEDAR at www.sedar.com.

When relying on forward-looking information to make decisions with respect to Pulse, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Furthermore, the forward-looking information contained in this document is provided as of the date of this document and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking information, except as required by law. The forward-looking information in this document is provided for the limited purpose of enabling current and potential investors to evaluate an investment in Pulse. Readers are cautioned that such forward-looking information may not be appropriate, and should not be used, for other purposes.

PDF available: http://ml.globenewswire.com/Resource/Download/684389a6-5b96-4478-ba47-39eb0d1160a8

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STOCKHOLM, Oct. 23, 2024 /PRNewswire/ — Growth in the strategic areas robotics and battery

Third quarter 2024           

• Net sales decreased by 7% to SEK 9,739m (10,512). Changes in exchange rates impacted by -3%. Organic sales decreased by 4%.           
• Planned exits of low-margin petrol-powered business have been completed, with no sales impact in the quarter.           
• Operating income was SEK 52m (398) and the operating margin was 0.5% (3.8).           
• Excluding items affecting comparability, the operating income amounted to SEK 53m (415) and the operating margin was 0.5% (3.9).           
• Earnings per share before dilution amounted to SEK -0.27 (0.22) and earnings per share after dilution amounted to SEK -0.27 (0.22).           
• Cash flow from operations and investments amounted to SEK 2,892m (137). Direct operating cash flow was SEK 4,020m (1,814).           
• In October, additional cost reduction activities were announced. These include cost savings of SEK 500m.

January – September 2024           

• Net sales decreased by 11% to SEK 39,888m (44,655). Changes in exchange rates impacted by -1%.           
• Planned exits of low-margin petrol-powered business impacted with -3%. Organic sales decreased by 7%.           
• Operating income was SEK 3,882m (4,863) and the operating margin was 9.7% (10.9).           
• Excluding items affecting comparability, the operating income amounted to SEK 3,889m (5,138) and the operating margin was 9.8% (11.5).           
• Earnings per share before dilution amounted to SEK 4.27 (5.59) and earnings per share after dilution amounted to SEK 4.26 (5.56).           
• Cash flow from operations and investments was SEK 5,296m (5,157). Direct operating cash flow was SEK 6,323m (6,018).

Growth in the strategic areas robotics and battery 

“In the third quarter, we delivered growth in our strategic focus areas robotic mowers and battery-powered products, as well as a strong cash flow. However, organic sales for the Group decreased by 4%, which reflects a challenging market situation with restrained consumer spending.

Organic sales in the Husqvarna Forest & Garden Division decreased by 1%. We grew in robotic mowers, in both the professional and residential markets as well as in battery-powered products. The division achieved growth in Europe, while the business decreased in North America.

Organic sales in the Gardena Division decreased by 8%, with good performance for hand tools and battery-powered products. However, sales of watering products decreased during the start of the quarter, due to challenging weather conditions, but improved gradually.

In the Husqvarna Construction Division, organic sales decreased by 8%. The challenging market situation, with weak demand in North America continued, while sales in Europe grew.

Operating income, excluding items affecting comparability, amounted to SEK 53m (415). The decrease was driven by lower volumes, leading to lower capacity utilization in production, as well as the impact of increased promotional activities toward the end of the gardening season.

Our direct operating cash flow grew to SEK 4.0bn (1.8), driven by continued inventory reductions and a strengthened cash flow from the decrease in trade receivables. 

In response to the challenging market environment, we have accelerated existing cost-savings programs with good results. Realized savings amounted to SEK 190m during the quarter and SEK 590m for the nine-month period.  

Further mitigating activities to reduce fixed costs and enhance efficiency across the Group are announced today. Savings will amount to SEK 500m, with the majority realized in 2025. As part of this plan, the Group expects to reduce 400 positions. Non-recurring costs related to these savings are expected to amount to SEK 600m and will be recognized in the fourth quarter. We are committed to identifying and implementing additional efficiency measures to further enhance our operational structure and effectiveness.

Despite the challenging environment, we are focused on executing our strategy and positioning the Group for long-term value creation. We continue to invest in our growth areas and look forward to our ambitious product launch program for the gardening season 2025. This will feature a wide range of new products, including 13 new robotic mower models equipped with the latest generation of intelligence and boundary wire free navigation.”

Pavel Hajman, CEO 

Webcast presentation and telephone conference
A webcast presentation of the Q3 report hosted by Pavel Hajman, CEO and Terry Burke, CFO will be held at 10:00 CET on October 23, 2024.

To view the presentation, please use the link: 
https://husqvarnagroup.creo.se/cedeece6-0700-4eb4-8457-f49a744d3dd3

The dial-in to the telephone conference (in order to ask questions):
+46 (0) 8 505 100 31 (Sweden) or +44 207 107 06 13 (UK)

Dates for Financial Reports 2025

Contacts
Terry Burke, CFO and Executive Vice President, Finance, IR & Communication 
+46 8 738 90 00

Johan Andersson, Vice President, Investor Relations 
+46 702 100 451

Husqvarna AB (publ), P.O. Box 7454, SE-103 92 Stockholm
Regeringsgatan 28, +46 8 738 90 00, www.husqvarnagroup.com 

Reg. Nr: 556000-5331
NASDAQ OMX Stockholm: HUSQ A, HUSQ B

This report contains insider information that Husqvarna AB is required to disclose under the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the contact person set out above, at 07.00 CET on October 23, 2024.

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/husqvarna-group/r/interim-report-january—september-2024,c4055016

The following files are available for download:

View original content:https://www.prnewswire.com/news-releases/husqvarna-group-interim-report-january–september-2024-302284091.html

SOURCE Husqvarna Group

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