It has been about a month since the last earnings report for Cheniere Energy Partners, LP (CQP). Shares have added about 1.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cheniere Energy Partners, LP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cheniere Partners Beats Q1 Earnings Estimates, Revenues Miss
Cheniere Energy Partners reported first-quarter 2021 earnings per unit of 64 cents, beating the Zacks Consensus Estimate by a penny. However, the earnings figure declined from 84 cents per unit in the year-ago period.
Revenues of $1,963 million were higher than the year-ago level of $1,718 million but missed the Zacks Consensus Estimate of $2,013 million.
The better-than-expected quarterly earnings were supported by reduced operating and maintenance expenses as well as decreased interest expenses. This was partially offset by lower cargoes sent and total LNG volumes loaded.
The partnership increased quarterly cash distribution from 65.50 cents per unit to 66 cents. The distribution hike amid the current market volatility signals its operational strength to investors.
The partnership sent 89 cargoes in the first quarter, down from 92 in the year-ago period. Total LNG volumes loaded in the quarter was recorded at 317 trillion British thermal units (TBtu), lower than the year-ago level of 327 TBtu.
Adjusted EBITDA for the first quarter was recorded at $779 million, down from the year-ago level of $792 million. Profits decreased for the first quarter due to reduced total margins and increased loss on debt modification. The negatives were partially offset by reduced interest expenses.
Costs and Expenses
Cost of sales for the quarter was $948 million, up from the year-ago period’s $699 million. However, operating and maintenance expenses decreased to $149 million from $152 million in first-quarter 2020.
Total costs and expenses for the quarter were recorded at $1,345 million, significantly up from $1,054 million in the March quarter of 2020.
The partnership generated operating net cash flow of $588 million for first-quarter 2021, higher than the year-ago level of $535 million.
As of Mar 31, 2021, the partnership had only $1,219 million in cash and cash equivalents, up from $1,210 million at fourth quarter-end. Cheniere Partners had a net long-term debt of $16,732 million, lower than $17,580 million in the fourth quarter. Also, its current debt stands at $850 million. It had a massive debt to capitalization of 96.9%.
The partnership reiterated its full-year 2021 guidance for distribution per unit in the range of $2.60-$2.70, indicating an increase from the 2020 figure of $2.59. It expects current distributable cash flow per unit in the range of $3.75-$3.95.
The SPL Project Train 6 was 83% complete at first quarter-end. Full work on the train is now expected to be completed by first-half 2022, ahead of the previous schedule of completion in the second half.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
Currently, Cheniere Energy Partners, LP has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cheniere Energy Partners, LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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