NAV Decrease: $336 million decrease from Q4 2024. Investment Funds Performance: Down approximately 8.4% for the quarter. Cash and Cash Equivalents: $1.3 billion at the holding company and $900 million at the funds. Quarterly Distribution: Maintained at $0.50 per depositary unit. Energy Segment EBITDA: Negative $61 million for Q1 2025 compared to $203 million in Q1 2024. Automotive Segment Sales: Down 9% year over year; excluding parts business wind down, down 6%. Automotive Segment Adjusted EBITDA: Negative $6 million for the quarter. Store Closures: Closed 24 underperforming locations. Real Estate Segment EBITDA: Decreased by $1 million compared to prior year quarter. Food Packaging Segment EBITDA: Decreased by $6 million compared to prior year quarter. Home Fashion Segment EBITDA: Decreased by $1 million compared to prior year quarter. Pharma Segment EBITDA: Decreased by $3 million compared to prior year quarter. Liquidity: Holding company cash and investment in funds of $3.8 billion; subsidiaries cash and revolver availability of $1.3 billion.

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Release Date: May 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

CVI share price increased by 3%, contributing to an $80 million increase from the previous quarter. The Board maintained a quarterly distribution at $0.50 per depositary unit, indicating stable shareholder returns. Icahn Enterprises LP ended the quarter with $1.3 billion in cash and cash equivalents at the holding company, providing a strong liquidity position. The automotive segment is showing early signs of improvement with positive trends in car count, tire volumes, and revenue. The company is actively exploring new opportunities and potential property sales, which could enhance its investment strategy and asset value.

Negative Points

NAV decreased by $336 million from the fourth quarter of 2024, primarily due to negative performance in the funds. The investment funds ended down approximately 8.4% for the quarter, driven by healthcare investments. Energy segment consolidated EBITDA was negative $61 million for Q1 2025, a significant decline from $203 million in Q1 2024. The automotive segment sales were down 9% year over year, with adjusted EBITDA at negative $6 million. Food packaging's adjusted EBITDA decreased by $6 million compared to the prior year quarter, due to lower prices and higher costs.

Q & A Highlights

Q: Can you provide details on the store closures in the automotive segment, specifically the number of stores with negative EBITDA and the timing for closing money-losing stores? A: We are not disclosing the aggregate number of store closures due to business and employee impacts. Many stores that were profitable in 2022 or 2023 are now losing money, and we are evaluating how to improve them. Stores with long-term profitability issues will be closed, averaging about eight closures per month. The timing also depends on whether the locations are owned or leased.

Story Continues

Q: Are you incurring any dark store lease expenses when closing stores, or are you able to avoid these liabilities? A: Some closures present opportunities rather than liabilities. For instance, we sold a poorly performing store for $4 million, which was valued at $2 million in real estate terms. Some locations may be leased to competitors if they are far enough away not to impact our operations. Overall, many closures are seen as opportunities rather than liabilities.

Q: You mentioned an update on the indicative net asset value. Could you clarify the current status? A: We did not state a specific increase in indicative net asset value. However, our public portfolio, including funds and publicly marked investments like CVI and UAN, was modestly positive as of last Friday.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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