RE:RE:Question to Brian Ector on Q1 buyback.JohnnyDoe wrote: HeavyBanana wrote: "Hi Brian
I thought I would reach out to you once again for some guidance on share buybacks as they relate to Q1 2024.
In previous guidance for Q4 2023 you had explained that buybacks in December had been significantly scaled back relative to the previous two months in response to lowered fcf expectations due to the drop in oil prices in the latter part of Q4.
As it stands now for Q1 2024, I have not seen any buy backs reported for the first two months of the quarter and am looking for insight into whether the company has restarted buybacks in March or whether a decision has been made to forego buybacks altogether in Q1 and resume in Q2 when fcf will be stronger relative to Q1.
Thankyou for any clarity you can provide on the matter.
XXXXXXX"
Brians response:
"Hi xxxxxxxxx, yes, that is correct. For 2024, given the timing of our capital expenditures (more heavily weighted to Q1 and Q3) we expect the majority of our free cash flow to be generated during Q2 and Q4, which is when I’d anticipate an increase in buybacks per our framework. There will be no share repurchases during the first quarter but watch for the program to start back up again in April.
Regards,
Brian"
This is another thing I've seen from the company recently that I'm not impressed with. Ramping up a buy back program during seasonal strength and ramping down a buy back program during seasonal weakness is a$ backwards
They should get ahead of that
I also think with their lower fcf overall, high capex in Q1, there may just not be much fcf in q1
Brian didn't mince words in his response. Majority fcf in Q2 and Q4 which means minority of fcf in Q1 and Q3 ........... and all that equates to AGGRESSIVE buyback continuation beginning in April.
Of course, aggressive is limited to regulatory framework with regards to daily purchases but me thinks maxing out the limits will be the order of the day beginning in April.
The share price is weak at this level regardless of heading into the cyclical strong time of the year, your point on that is moot.