NEW YORK - Icahn Enterprises L.P. (NASDAQ: IEP ) shares plunged 8.4% on Friday premarket after the investment firm reported third quarter earnings that missed estimates and announced a 50% cut to its quarterly distribution.
The company reported Q3 adjusted earnings per share of $0.05, falling short of analyst expectations for $0.21. Revenue came in at $2.8 billion, slightly above the consensus estimate of $2.7 billion.
In a major shift, Icahn Enterprises slashed its quarterly distribution from $1.00 per depositary unit to $0.50, citing the need to maintain liquidity for new investment opportunities. At the reduced payout, the distribution still yields about 16% annually based on the current share price.
"Rarely have I seen a stock market with such extreme valuations - with some companies trading at unjustifiable premiums and others being massively undervalued," said Chairman Carl Icahn in a statement. "These undervalued situations have created great opportunities for activists."
The company reported net income attributable to IEP of $22 million for Q3, an improvement from a $6 million loss in the year-ago quarter. However, adjusted EBITDA declined to $183 million from $243 million last year.
Icahn noted the company had approximately $2.3 billion in cash and equivalents as of October 31 to pursue new investments. He said one such opportunity is CVR Energy (NYSE: CVI ), where Icahn Enterprises intends to launch a tender offer for additional shares.
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