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Cheniere (LNG) Stock Rises 8.9% Despite Posting Q4 Loss

Cheniere Energy Inc.’s LNG stock has gone up 8.9% since Cheniere Energy’s fourth-quarter 2021 earnings announcement on Feb 24.

The uptrend could be attributed to fourth-quarter revenues beating the Zacks Consensus Estimate and the encouraging guidance that improved on its earlier 2022 forecasts.

Behind the Earnings Headlines

This largest U.S. liquefied natural gas exporter reported an adjusted loss of $1.17 per share for the fourth quarter, missing the Zacks Consensus Estimate of earnings of $1.81. This was due to a rise in derivative losses from changes in fair value and settlements, along with an increase in income tax provision, due to the variability of LNG’s forecast earnings for the full year of 2021. Moreover, the bottom line lagged the year-ago quarter’s earnings of 84 cents.

Revenues from Cheniere Energy came in at $6,045 million, beating the Zacks Consensus Estimate of $5,396 million, up by around 138.3% from the year-ago figure of $2,688 million. This could be attributed to the year-over-year increase in cargoes shipped and an increase in volumes.

Quarterly revenues rose 135.3% to $6.56 billion from $2.79 billion a year ago. The top line beat the Zacks Consensus Estimate of $5.36 billion in the quarter under review.

Cheniere Energy posted adjusted EBITDA of $1.34 billion, with distributable cash flow (DCF) of around $540 million. During the quarter, LNG shipped 153 cargoes compared with 130 in the year-earlier period. Total volumes of LNG exported were 540 trillion British thermal units (TBtu) compared with 464 TBtu in the prior year.

Costs & Balance Sheet

Overall costs and expenses rose 143.6% from the level recorded in the corresponding quarter of the last year to $6,118 million. This rise is mainly attributed to the higher cost of sales expenses that climbed nearly 184.5% from the year-ago quarter’s number to $5.36 billion.

As of Dec 31, 2021, Cheniere Energy had approximately $1,404 million of cash and cash equivalents. Its net long-term debt was $29,449 million.

Shareholders Capital-Return Initiative

Houston, TX-based LNG repurchased a total of 101,944 shares for about $9 million and paid an inaugural quarterly dividend of 33 cents per common share on Nov 17, 2021.

Cheniere Energy, Inc. Price, Consensus and EPS Surprise

Cheniere Energy, Inc. Price, Consensus and EPS Surprise
Cheniere Energy, Inc. Price, Consensus and EPS Surprise

Cheniere Energy, Inc. price-consensus-eps-surprise-chart | Cheniere Energy, Inc. Quote

Guidance

For 2022, Cheniere Energy raised its financial guidance due to the early completion of Sabine Pass Train 6.

Cheniere Energy updated its outlook for the current year. It raised the adjusted EBITDA guidance range to $7.0-$7.5 billion. LNG revised its DCF for 2022 to the $4.3 billion-$4.8 billion range.

Also, Cheniere Energy increased its full-year 2022 distribution guidance to the $4.00-$4.25 per common share range.

Project Updates

Sabine Pass Liquefaction Project (SPL): Cheniere Energy operates six natural gas liquefaction Trains for a total production capacity of about 30 mtpa of LNG at the Sabine Pass LNG terminal (the SPL Project). On Feb 4, the significant completion of Train 6 of the SPL Project was accomplished.

Project (CCL): Under this project, Cheniere Energy built three trains, with a total production capacity of 15 mtpa of LNG. Trains 1, 2 and 3 are functional. In June 2019, the first commissioned cargo from Train 2 was dispatched. Train 3 came online in March this year before time.

Corpus Christi Expansion Project: Cheniere Energy looks to develop seven midscale liquefaction trains adjacent to the CCL Project. The total production capacity of these trains is assumed to be 10 mtpa. The company anticipates beginning the construction of the Corpus Christi Stage 3 project, among other things, entering into an engineering, procurement and construction contract and obtaining adequate financing.

Zacks Rank & Key Picks

Cheniere Energy currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space are ConocoPhillips COP, Marathon Oil Corporation MRO and Centennial Resource Development, Inc. CDEV. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ConocoPhillips, based in Houston, TX, is primarily involved in the exploration and production of oil and natural gas. It recently reported fourth-quarter 2021 adjusted earnings per share of $2.27, beating the Zacks Consensus Estimate of $2.20.

ConocoPhillips’ earnings for 2022 are expected to soar 69.5% year over year. COP reported preliminary 2021 year-end proved reserves at 6.1 billion barrels of oil equivalent. As of Dec 31, 2021, ConocoPhillips had $5,028 million in total cash and cash equivalents.

Marathon Oil reported a fourth-quarter 2021 adjusted net income of 77 cents per share, beating the Zacks Consensus Estimate of 55 cents. As of 2021 end, Marathon Oil had 1,106 million oil-equivalent barrels in net proved reserves, suggesting a year-over-year increase of 14%.

Marathon Oil’s earnings for 2022 are expected to soar 93.6% year over year. In good news for investors, the company is using the excess cash from a supportive environment to reward them with dividends and buybacks. As part of that, MRO has executed $1 billion of share repurchases since October (with $1.7 billion remaining under the current authorization) and recently announced a dividend hike.

Centennial Resource reported fourth-quarter 2021 adjusted earnings of 39 cents per share, beating the Zacks Consensus Estimate of 30 cents. Centennial Resource announced its proved reserves for 2021 end at 305 MMBoe, representing growth from 299 MMBoe at the end of the prior year.

Centennial Resource is expected to see earnings growth of 98.5% in 2022. CDEV announced the launch of its stock repurchase program of $350 million. The authorization of the plan is for two years.


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