Cheniere Energy (LNG) Earnings Surprise In Q1, Sales Jump

U.S. gas exporter Cheniere Energy Inc. (NYSE:LNG) reported strong first-quarter results amid the commencement of three of its units at Sabine Pass - North America’s first large-scale liquefied gas export facility. The 2.6 billion cubic feet per day Sabine Pass terminal in Cameron Parish, Louisiana opened in Feb 2016.

The company’s net income per share came in at 23 cents, contrary to the Zacks Consensus Estimate for a loss of 37 cents. The Mar quarter profitability was also an improvement over the year-ago period when Cheniere Energy reported a loss.

Revenues of $1,211 million dwarfed the Zacks Consensus Estimate of $811 million and the first-quarter 2016 sales of a mere $69 million. The top line surge led the company’s adjusted EBITDA to jump to $483 million compared to a loss of $45 million in the first quarter of 2016.

During the quarter, the company shipped 43 cargoes from Sabine Pass liquefied natural gas terminal in Louisiana, of which 7 were commissioning cargoes associated with Unit 3. Total volumes lifted in the Jan-Mar period were 154 trillion British thermal units.

Costs & Expenses

Overall costs and expenses soared 422% to $835 billion from the same quarter last year, mainly reflecting the commencement of operations at Sabine Pass liquefied natural gas terminal in Louisiana. Depreciation and amortization expense increased big time – from $24 million a year ago to $70 million now. However, SG&A costs fell 18 on the back of organizational changes and lower professional service fees.

Balance Sheet

As of Mar 31, 2017, Cheniere Energy had approximately $923 million in cash and cash equivalents and $24.1 billion in net long-term debt.

Guidance

Cheniere Energy reaffirmed its guidance for full-year 2017. While adjusted EBITDA is expected to be between $1.4 billion and $1.7 billion, distributable cash flow is likely to be between $500 million to $700 million ($2.10 to $2.80 per share).

Progress Report

Cheniere Energy achieved a significant milestone in the first quarter with the substantial completion of Train 3. Train 4 is likely to be placed in service during the second half of this year. Altogether, Cheniere Energy intends to construct seven production units - five at Sabine Pass and two at the liquefaction and export terminal in Corpus Christi, TX.

Zacks Rank & Stock Picks

Cheniere Energy carries a Zacks Rank #3 (Hold).

Meanwhile, one can look at better-ranked energy players like McDermott International Inc. (NYSE:MDR) , Canadian Natural Resources Ltd. (TO:CNQ) and Par Pacific Holdings Inc. (NYSE:PARR) . All are Zacks Rank #1 (Strong Buy) stocks. You can see the complete list of today’s Zacks #1 Rank stocks here.

Incorporated in 1959, Houston, TX-based McDermott International is an engineering and construction company, solely focused on the offshore oil and gas business. The company has an excellent earnings surprise history. It surpassed estimates in each of the last four quarters at an average rate of 387.50%.

Calgary, Alberta-based Canadian Natural Resources is engaged in the acquisition, development and exploitation of crude oil and natural gas properties. The 2017 Zacks Consensus Estimate for this company is 94 cents, representing some 548% earnings per share growth over 2016. Next year’s average forecast is $2.25, pointing to another 139% growth.

Par Pacific Holdings, Inc., based in Houston, TX, is a diversified energy player that operates in 4 segments: Refining and Distribution, Retail, Commodity Marketing and Logistics, and Natural Gas and Oil. Over the past 7 days, the company has seen the Zacks Consensus Estimate for 2017 increase 29% to 67 cents per share.

Zacks' 2017 IPO Watch List

Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.

One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>