Navitas stock soars as company advances 800V tech for NVIDIA AI platforms
EQT Corporation (NYSE:EQT (ST:EQTAB)), a leading natural gas producer, disclosed plans for a significant workforce reduction as part of the integration process following its acquisition of Equitrans Midstream (NYSE:ETRN) Corporation. The announcement, made on September 25, 2024, is expected to result in a 15% cut in the company's employee base, including the termination of former executive officers and certain senior employees from Equitrans.
The Pittsburgh-based energy company anticipates incurring pre-tax charges between $165 million to $185 million related to employee severance and other termination benefits. These charges are also inclusive of stock-based compensation costs. The bulk of these expenses, approximately $155 million to $170 million, are projected to be recorded in the third quarter of 2024, with the remainder spread between the fourth quarter of 2024 and 2025.
EQT expects these charges to lead to cash expenditures in the range of $55 million to $75 million, with the majority being paid out in the third quarter of 2024. The job cuts are aimed at eliminating roughly $80 million in annualized general and administrative costs.
The company cautions that these estimates are based on assumptions and that actual results may materially differ. Additional charges or cash expenditures not currently anticipated may arise as the plan is executed.
This strategic move comes in the wake of EQT Corporation's efforts to streamline operations and reduce costs following the Equitrans Midstream Corporation acquisition. The company has not provided specific details on the number of employees affected or the timeline for the completion of the workforce reduction, which is slated to be finalized in 2025.
Investors and stakeholders are advised that forward-looking statements involve risks and uncertainties. The actual outcomes may vary due to a range of factors, as detailed in the company's Annual Report and other SEC filings.
The information in this article is based on an SEC filing by EQT Corporation.
In other recent news, EQT Corp has been the focus of several significant developments. JPMorgan has raised its price target on EQT Corp, maintaining an Overweight rating due to confidence in the company's deleveraging strategy following its acquisition of ETRN. The firm expects EQT to successfully complete the sales of its non-operational exploration and production assets and regulated midstream assets by year-end, generating approximately $4.5 billion in cash.
Concurrently, Wells Fargo upgraded EQT Corp's stock from Equal Weight to Overweight, following the successful merger with ETRN and the company's strong quarterly performance. The merger and improved financials have led to a revised higher estimated net asset value and a raised price target.
On the other hand, Piper Sandler adjusted its stance on EQT Corp from Overweight to Neutral, reflecting changes in long-term natural gas price assumptions. EQT's guidance for the second half of 2024 includes capital expenditures of approximately $1.3 billion, primarily due to the early close of an agreement with ETRN.
Citi resumed coverage of EQT Corp, highlighting expected improvements in the company's cost structure and a potential decrease in capital intensity as key factors for stock recovery. This comes despite the challenges EQT faced following its acquisition of ETRN.
Lastly, in response to falling natural gas prices, EQT Corp has planned strategic curtailments of approximately 90 billion cubic feet equivalent this fall, aiming to address the recent 40% price drop. These developments reflect the company's ongoing efforts to navigate and adapt to market conditions.
InvestingPro Insights
EQT Corporation's recent announcement of workforce reduction aligns with its financial position and market performance, as revealed by InvestingPro data. The company's market capitalization stands at $21.56 billion, reflecting its significant presence in the natural gas sector. Despite the planned cost-cutting measures, EQT's P/E ratio of 21.81 suggests that investors are still pricing in growth expectations.
InvestingPro Tips highlight that EQT operates with a moderate level of debt, which could provide some flexibility as it navigates the integration process and workforce restructuring. Additionally, the company has been profitable over the last twelve months, with a strong return over the past five years, indicating a track record of financial stability that may help it weather the current transition.
The planned reduction in general and administrative costs through job cuts appears timely, given that EQT's revenue growth has seen a significant decline of -49.94% in the last twelve months. This move could help maintain profitability, which analysts predict will continue this year according to another InvestingPro Tip.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for EQT, providing a deeper understanding of the company's financial health and market position during this period of strategic change.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.