Cheniere (LNG) Q2 Earnings Beat Estimates, Revenues Miss
Cheniere Energy LNG reported second-quarter 2023 adjusted profit of $5.61 per share, which outpaced the Zacks Consensus Estimate of $2.37. The bottom line also outperformed the year-ago quarter’s level of $2.90. This outperformance can be primarily attributed to a 72.6% year-over-year decrease in costs and expenses.
Revenues totaled $4.10 billion, which missed the Zacks Consensus Estimate of $4.81 billion. The top line also decreased 48.8% from the year-ago quarter’s level of $8.01 billion.This can be attributed to the year-over-year decrease in cargo shipped and a reduction in volumes and prices.
Cheniere reported an adjusted EBITDA of $1.86 billion, which beat our estimate of $1.41 billion. Distributable cash flow (DCF) came in at $1.35 billion. In the reported quarter, the company shipped 149 cargoes compared with 156 in the year-ago period. Total volumes of LNG exported were 534 trillion British thermal units (TBtu) compared with 564 TBtu in the comparable period of 2022.
The company declared a quarterly cash dividend of 39.5 cents per common share payable on Aug 16, 2023, to shareholders of record as of the close of business on Aug 9, 2023.
Cheniere Energy, Inc. Price, Consensus and EPS Surprise
Cheniere Energy, Inc. price-consensus-eps-surprise-chart | Cheniere Energy, Inc. Quote
Costs & Balance Sheet
Costs and expenses amounted to $1.8 billion for the second quarter, down 72.6% from the prior-year quarter’s level. The reported figure also fell short of our prediction of $2.9 billion.
As of Jun 30, 2023, Cheniere had approximately $4.5 billion of cash and cash equivalents. Its net long-term debt amounted to $23.4 billion.
As of the same date, the company reported a cost (recovery) of sales of $912 million.
Guidance
The company expects adjusted EBITDA in the $8.2-$8.7 billion range for 2023.
LNG expects its DCF to be in the band of $5.7-$6.2 billion.
Project Updates
Sabine Pass Liquefaction Project (SPL)
Cheniere operates six natural gas liquefaction trains for a total production capacity of about 30 million tons per annum (mtpa) of LNG at the Sabine Pass LNG terminal (the SPL Project). Sabine Pass Train 6 reached substantial completion over a year ahead of the guaranteed schedule, and the company was able to bring the train to full utilization and stable operations well ahead of its plan.
CCL and CCL Stage 3 Project
The company presently runs three natural gas liquefaction trains with a combined production capacity of roughly 15 mtpa of LNG at the Corpus Christi LNG terminal close to Corpus Christi, TX.
Cheniere is building an expansion next to the CCL Project with seven midscale Trains and a projected total production capacity of more than 10 mtpa of LNG.
CCL Midscale Trains 8 & 9 Project
The company is building two midscale trains with an anticipated combined production capacity of about 3 mtpa of LNG, close to the CCL Stage 3 Project.
Zacks Rank and Key Picks
Currently, LNG carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI, sporting a Zacks Rank #1 (Strong Buy), and Evolution Petroleum EPM and Archrock AROC, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy (CVI) is valued at around $3.67 billion. In the past year, its shares have risen 19.5%.
CVI currently pays a dividend of $2 per share, or 5.47% on an annual basis. Its payout ratio currently sits at 30% of earnings.
Evolution Petroleum is worth approximately $320.71 million. EPM currently pays a dividend of 48 cents per share, or 4.98% on an annual basis.
The company currently has a forward P/E ratio of 8.93. In comparison, its industry has an average forward P/E of 14.60, which means EPM is trading at a discount to the group.
Archrock is valued at around $2.04 billion. It delivered an average earnings surprise of 15.08% for the last four quarters and its current dividend yield is 4.75%.
Archrock is a provider of natural gas contract compression services and aftermarket services of compression equipment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CVR Energy Inc. (CVI) : Free Stock Analysis Report
Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report
Evolution Petroleum Corporation, Inc. (EPM) : Free Stock Analysis Report
Archrock, Inc. (AROC) : Free Stock Analysis Report
