Icahn Enterprises says it will keep paying its $1 quarterly dividend

By Ciara Linnane

Carl Icahn's investing arm narrowed its loss in the first quarter even as revenue fell

Icahn Enterprises LP's stock was up 2% on Wednesday, after the company backed its $1 quarterly dividend as it reported first-quarter earnings.

The stock of Carl Icahn's investing arm (IEP) is still down 52% over the last 12 months after the company became the subject of a highly critical short-selling report last May that questioned its financials - and ability to keep paying what at the time was a $2 dividend.

Icahn Enterprises halved the dividend in August but has stuck with the $1 payout ever since, reassuring its mostly retail investors. Icahn Enterprises, which is 84% owned by Icahn and his son, Brett, offers exposure to Icahn's personal portfolio of public and private companies, including petroleum refineries, car-parts makers, food-packaging companies and real estate.

The report by short seller Hindenburg Research accused the company of overstating values, among other issues. Carl Icahn has responded several times questioning the validity of the report and the motivation of its author.

Icahn has also repeatedly defended his style of activist investing which he has said is the "best investment paradigm that exists. While this method of investing certainly is somewhat volatile, over the long term the returns cannot be matched."

On Wednesday, his company posted a net loss of $38 million, or 9 cents a share, for the quarter, narrower than the loss of $270 million, or 75 cents a share, posted in the year-earlier period.

Revenue fell to $2.5 billion from $2.7 billion. As only one analyst on FactSet covers the stock, there are no reliable consensus estimates.

Indicative net asset value, which measures the value of the funds, rose by $194 million to about $5 billion, mostly due to an increase in the value of CVR Energy Inc. (CVI). That company's stock is up about 20% in the last 12 months.

The company's investment funds had a negative 0.8% return for the quarter. Among their bigger holdings are stakes in Southwest Gas (SWX), American Electric Power (AEP), Bausch Health Cos. Inc. (BHC) and Illumina Inc. (ILMN).

IEP's stock is up 2% in the year to date, underperforming the S&P 500 SPX which is up 9%.

The company's bonds, meanwhile, have gained in price in the year to date, sending yields lower.

-Ciara Linnane

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05-08-24 1230ET

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