2024-04-25 21:13:48 ET
Summary
- Helix Energy Solutions reported mixed Q1 2024 results, with weaker-than-expected profitability offset by very strong cash generation.
- Q2 will be impacted by an $85 million earnout payment related to the acquisition of the Helix Alliance shallow water abandonment operations two years ago.
- On the conference call, management remained optimistic about the company's prospects going into 2025 as several vessels will transition from low-margin legacy contracts to prevailing market rates.
- While the company expects to generate strong cash flows for the next several years, management stated its preference for pursuing profitable growth rather than aggressively returning excess cash to shareholders.
- With substantial improvements in profitability and cash generation expected in 2025 and beyond, I am reiterating my "Buy" rating on the shares with an unchanged price target of $13.50.
Note:
I have covered Helix Energy Solutions Group, Inc. ( HLX ) previously, so investors should view this as an update to my earlier coverage of the company. ...
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Helix Energy Solutions: Strong Prospects Going Into 2025, Buy