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Golar LNG Ltd. Message Board

  • sophist_man sophist_man May 24, 2007 8:39 PM Flag

    HUGE EARNINGS MISS

    Q ended 3/31/2007

    Income before taxes and minority interest = $41,365 Million
    This includes one-time gains of $41,088 Million from selling their partial ownership in a ship under construction. This means ongoing operations bare barely breaking even.

    You can add to this breakeven core business a $14,758 million profit which is GLNG's accounting allocation of Korea Line's profits, but this is only an accounting allocation not actual cash earnings. And, even this can't be considered an "ongoing" business. GLNG sold half of it's shares in Korea Line and in the future will not include an accounting allocation of profits.

    Continuing operations are breakeven. Sure, they will distribute cash on hand as a dividend, but this is not sustainable with a breakeven business.

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    • Are you short, trying to talk the market down to pick up cheap shares or just here to pass on your financial wisdom?
      Whether earnings is big miss, on target or better then expected, it matters little, your looking at old data. This old data was already figured into the market weeks ago, the market is forward looking and is privy to data which is not publically known. As to earnings, there is more then just earnings which makes a company attractive and EPS rise, such as growth, strong management leadership, ability to execute, product marketings, current and future demand, and GLNG has all of these. As to dividends on not being able to sustain, that is the same recording they have been saying over on the FRO board which pays much higher dividend, but guess what, they have been paying out this dividend for several years and guess who runs that company? Same as GLNG.
      Take a look at what FRO has done in the past few years.
      Another strong demand for LNG will be to convert this into clean fuel, demand will be rising as well as price.
      As to the stock now, we are simply in overbought condition and stock is consolidating around these 52 week highs, once we get out of overbought state, stock will start new leg upwards...

      • 1 Reply to daviebri
      • [Whether earnings is big miss, on target or better then expected, it matters little, your looking at old data. This old data was already figured into the market weeks ago, the market is forward looking and is privy to data which is not publically known.]

        That is a complete crock. This conspiracy theory that permeates message boards, that somehow there's this vast population of really insightful traders predicting corporate performance and setting prices accordingly is just not tenable. Analysts just aren't that smart. If secret information were "already priced in" then share price wouldn't move when news is announced. If shares were priced to future earnings, then there wouldn't be any "surprises." The idea that the Illuminati are manipulating the market to profit on inside information is a myth that's propagated by day traders trying to figure out whether the cup has a handle or why the stock reversed after breaking its 20 EMA.

        Q1 earnings were very disappointing, but not very surprising. Two ships idle for much of the quarter and two more in drydock is not good. However you want to see it, selling the boat disguises approximately zero operational earnings in Q1. The vast majority out there look at the earnings, figure this is a cash neutral venture, and sell. There are still boats in the spot market now, so Q2 is likely not to show great performance, but $20M gain on K-line will disguise that weakness (and probably let them pay the div) in Q2. Further out than that, everything's back on time charters, and earnings ought to stable.

        The fact that they're converting ships to regas tells me a) there's not much money in shipping gas, but b) there's some hope for increased demand as regas capacity rises.

        It all paints a pretty gloomy picture, and it will take a while for your market Illuminati to figure it out that its temporary. They let SFL trade at $16-$18 for what, a year, while they paid out $0.50/quarter on all-but-guaranteed earnings? The market is driven by panicky reactionaries, not prescient visionaries.

 
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