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Golar LNG (GLNG) Q3 Loss Wider than Expected, Revenues Miss

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Zacks Equity Research
·4 min read
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Golar LNG Limited GLNG incurred a loss (excluding 5 cents from non-recurring items) of 17 cents per share in third-quarter 2020, wider than the Zacks Consensus Estimate of a loss of 16 cents. Moreover, the metric increased 54% year over year. Low costs drove the bottom line.

Adjusted revenues of $94.7 million surpassed the Zacks Consensus Estimate of $88.3 million. Total operating revenues came in at $95.2 million. The top line declined 4% year over year, owing to COVID-19 induced closure of the shipyard of the shipyard where Golar Tundra was being dry-docked and significant reduction in fleet utilization. Notably, FLNG Hilli Episeyo maintained its 100% commercial uptime in the quarter under review.

FLNG revenues accounted for bulk (57.9%) of the company’s top line. Revenues from vessel and other operations was $40.2 million compared with $46.2 million reported in the second quarter. Notably, Time and voyage charter revenues plunged 16.4% sequentially. Additionally, Time Charter Equivalent (“TCE”) earnings increased to $39,100 per day in the quarter under discussion, compared with $35,200 in third-quarter 2019. Golar LNG anticipates TCE earnings to be above $50,000 per day with utilization above 80% in fourth-quarter 2020.

Vessel-operating expenses of $28.23 million increased 16.4% sequentially. The upside can be attributed to catch-up repairs and maintenance carried out following the lifting of COVID restrictions over the northern hemisphere summer months.

Golar LNG Limited Price, Consensus and EPS Surprise

Golar LNG Limited Price, Consensus and EPS Surprise
Golar LNG Limited Price, Consensus and EPS Surprise

Golar LNG Limited price-consensus-eps-surprise-chart | Golar LNG Limited Quote

Total administrative expenses dropped 7% from second-quarter 2020 to $7.98 million due to ongoing cost-reduction efforts such as lower payroll and travel costs. Project-development expenses of $1.2 million were flat year over year.

The company, currently carrying a Zacks Rank #3 (Hold), exited the third quarter with a cash balance of $238.9 million, of which $76.7 million was unrestricted cash. As of Sep 30, 2020, its total debt (current and non-current) was $2.54 billion.

Sectorial Snapshot

Apart from Golar LNG, let’s take a look at some other Zacks Transportation sector’s third-quarter earnings like Kirby Corp.’s KEX, J.B. Hunt Transport Services JBHT and United Airlines Holdings, Inc. UAL.

Kirby reported mixed third-quarter 2020 results, with earnings beating the Zacks Consensus Estimate and revenue missing the same.  Earnings of 46 cents per share beat the Zacks Consensus Estimate by 9 cents. However, the bottom line plunged 42.5% year over year. Total revenues of $496.6 million lagged the Zacks Consensus Estimate of $526.5 million and declined 25.5% year over year. The top line was hurt by decline in revenues in the marine transportation and the distribution and services segments stemming from the coronavirus-induced weak economic conditions.

J.B. Hunt reported mixed third-quarter 2020 results, with earnings missing estimates and revenues beating the same. Quarterly earnings of $1.18 per share fell short of the Zacks Consensus Estimate of $1.26. Moreover, the bottom line declined 15.7% year over year due to disappointing performance in its intermodal (JBI) unit. Total operating revenues increased 4.6% to $2,472.5 million. Revenues also beat the consensus mark of $2,345.2 million.

United Airlines incurred a loss (excluding $1.83 from non-recurring items) of $8.16 per share, wider than the Zacks Consensus Estimate of a loss of $7.63. Results were hurt by coronavirus-induced weakness in air-travel demand. Moreover, operating revenues of $2,489 million slumped 78.1% year over year and lagged the Zacks Consensus Estimate of $2,570.1 million. The year-over-year plunge was caused by 84.3% drop in passenger revenues to $1,649 million.

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United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
 
J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
 
Kirby Corporation (KEX) : Free Stock Analysis Report
 
Golar LNG Limited (GLNG) : Free Stock Analysis Report
 
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