April Earnings Update
April showers bring May flowers? An investment update for CROX, HUN, PBI, and AMR
This will be a quick post to round up the Q1 earnings for various Hidden Rock Capital portfolio names that have been featured this year, which include:
Crocs (CROX)
Huntsman (HUN)
Pitney Bowes (PBI)
Alpha Metallurgical Resources (AMR)
Other highlighted names like Celanese (CE), Core Natural Resources (CNR), Global Payments (GPN), and XPEL (XPEL) have not been released yet, so we will review those when they are published.
Crocs (CROX)
Crocs had a strong earnings result, and more importantly continued to put their money where their mouth is by plowing the cash into accretive share buybacks.
While overall revenue declined year-over-year, the core Crocs brand revenue increased by ~1%.
More importantly, the company maintained strong profitability, generating $2.99 in adjusted earnings per share during the quarter.
2026 full year guidance for earnings was increased to $13.20-$13.75 per share, up from previous guidance of $12.88 to $13.35.
Management bought back 0.8M shares for $73.6M year-to-date, which represents ~1.6% of shares outstanding.
I believe the company can easily buy back 5-10% of its shares every year given its resilient earnings and free cash flow.
By stabilizing its revenue to maximize free cash flow, management has a solid pathway to achieve my original $170-$210 price target for the stock.
Huntsman (HUN)
Huntsman’s quarterly result demonstrated that the market is forward looking.
The Q1 results were not good with a net loss of $0.31 per share, but this was already known.
What the market really cared about is signs that chemical demand (and Huntsman’s financial results) have bottomed and are on an upward trajectory for the rest of 2026.
And we certainly got plenty of those green shoot signals:
Revenue stopped declining for the first time in a long time, with Q1 2026 sales increasing slightly year-over-year
2 of the 3 business segments (Polyurethanes and Advanced Materials) registered higher sales volume during the quarter
And management had this to say about next quarter:
Looking ahead to the second quarter of 2026, we anticipate a step up in profitability, with an increase in volumes combined with margin expansion resulting from our worldwide pricing initiatives.”
The stock spiked to $15+ on the earnings before giving back some of the gains, indicating that the market is looking through the weak Q1 results to the likely upward inflection for the rest of 2026.
The quarter did nothing to dispel my belief that Huntsman can be worth $30-$40 per share once the cycle turns.
Pitney Bowes (PBI)
Pitney Bowes technically had a pre-release of earnings, but since we have talked about this stock multiple times, let’s dissect the numbers.
In short, the quarter was a beat in the truest sense of the word, with guidance for full year 2026 raised across the board for revenue, EBIT, earnings per share, and free cash flow.
While the exact share buyback numbers will come out with the official earnings release later this week, my strong bet is that management continued to plow massive amounts of cash flow into share buybacks, with CEO Wolfe clearly believing PBI stock to be deeply undervalued.
Based on the latest outlook, PBI is expected to generate $345-$380M in free cash flow.
If we assume the large majority of this free cash flow is used to buy back stock, management can easily retire 10-15% of shares outstanding, which is an absolutely staggering number.
I will be closely looking at the official Q1 results which will be released on May 6th.
Alpha Metallurgical Resources (AMR)
AMR was the one stock that had underwhelming Q1 results, with a net loss of $0.86 per share.
However, some of this was driven by one-time events like an equipment outage, and I believe the majority of the metallurgical coal industry is operating at a loss or breakeven currently at current coal prices, which is unsustainable over the long term.
Source: Trading Economics
While coal prices have taken a breather after increasing during the first few months of the year, I believe it should continue to normalize higher during the reminder of the year.
The resulting increase in free cash flow will allow AMR to turn back on its buyback machines, which should drive the stock price to our target of $300-$400 per share.
Disclaimer: I currently own the stocks listed in this article and may buy or sell more at any time. This is not investment advice, please do your own due diligence.