Cheniere (LNG) Gains Since Q2 Earnings Beat, Guidance Raise
The stock of Cheniere Energy LNG — the largest liquefied natural gas exporter in the United States — has gained 11.4% since its second-quarter earnings announcement on Aug 4. In addition to comfortable top and bottom-line beats, investors cheered another increase in the company’s full-year earnings guidance.
What Did Cheniere Energy’s Earnings Unveil?
Cheniere Energy announced second-quarter 2022 earnings per share of $2.90, which beat the Zacks Consensus Estimate of $2.83 and improved significantly from the year-earlier bottom line of 54 cents. The outperformance could be attributed to a sharp increase in natural gas prices and increasing demand from customers looking to replace Russian energy.
Meanwhile, Cheniere Energy’s revenues of $8 billion surged 165% year over year and beat the consensus mark by $1.1 billion, primarily due to soaring LNG sales. Revenues from gas exports came in at $7.9 billion, up 170.3% from the second quarter of 2021 and 17.2% above the Zacks Consensus Estimate.
The company’s second-quarter adjusted EBITDA was $2.5 billion, with distributable cash flow (DCF) of around $1.9 billion. In the April-June period, Cheniere Energy shipped 156 cargoes compared with 139 in the year-earlier period. Total volumes of LNG exported were 563 trillion British thermal units (TBtu) compared with 496 TBtu in the prior year.
As a matter of fact, the energy player informed that it has signed long-term contracts to deliver some 140 million tons of natural gas chilled to liquid through 2050. In another positive development, Cheniere Energy reached its Financial Investment Decision to construct its Corpus Christi Stage 3 expansion project.
As part of its capital-return initiative, the company repurchased 4.1 million shares worth $540 million during the quarter under review and paid a dividend of 33 cents.
Cheniere Energy, Inc. Price, Consensus and EPS Surprise
Cheniere Energy, Inc. price-consensus-eps-surprise-chart | Cheniere Energy, Inc. Quote
Cost, Balance Sheet
The company, sporting a Zacks Rank #1 (Strong Buy), reported total operating costs and expenses of $6.5 billion in second-quarter 2022, rising 127.4% from the year-ago quarter. This rise is primarily attributable to the higher cost of sales, which surged 167%.
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As of Jun 30, Cheniere Energy had cash and cash equivalents of $2.6 billion and long-term debt of $26.1 billion.
Guidance
Based on continued margin strength and the expected early-termination lump sum proceeds from a project, Cheniere Energy raised its guidance for 2022. It now sees annual adjusted EBITDA between $9.8 billion and $10.3 billion compared to the prior estimate of $8.2-$8.7 billion. Cheniere Energy also anticipates distributable cash flow to be $6.9-$7.4 billion, up from $5.5-$6 billion previously.
Other Energy Picks
Apart from Cheniere Energy, investors interested in the Oil/Gas sector might look at Murphy USA MUSA, PBF Energy PBF and Earthstone Energy ESTE, each carrying a Zacks Rank #1, currently.
Murphy USA: Murphy USA is valued at some $6.8 billion. The Zacks Consensus Estimate for MUSA’s 2022 earnings has been revised 21.9% upward over the past 60 days.
Murphy USA, headquartered in El Dorado, AR, delivered a 40.8% beat in Q2. MUSA shares have surged 86.7% in a year.
Earthstone Energy: ESTE beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 27%, on average.
Earthstone Energy is valued at around $2.2 billion. ESTE has seen its shares gain 83.8% in a year.
PBF Energy: PBF Energy is valued at some $4.1 billion. The Zacks Consensus Estimate for PBF’s 2022 earnings has been revised 118.1% upward over the past 60 days.
PBF Energy, headquartered in Parsippany, NJ, has a trailing four-quarter earnings surprise of roughly 78%, on average. PBF shares have surged 228.1% in a year.
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