LNG stock Golar LNG advanced Thursday after the liquefied natural gas transport/process outfit delivered stronger than expected second-quarter earnings. The financial results come a week after Freeport LNG reported its key export terminal, which has been offline since an early June explosion, should resume partial operations in October.
Golar LNG Earnings
Estimates: Analysts predicted Golar LNG would earn 22 cents per share for its second quarter, up from a 12-cent loss a year ago. Revenue estimates saw $81.1 million, down from the first quarter's $104.4 million.
Earnings: GLNG earned 29 cents per share, a steep jump over a loss of 17 cents per share in Q2 2021, according to FactSet. Total sales fell 16% to $86.1 million in the second quarter, FactSet reported.
Golar LNG shares jumped 6.3% to 25.84 during Thursday's market trading. GLNG has made gains in back-to-back trading sessions. The stock is back above its 10-week moving average as it works on adding a fourth week to its recent advance. Shares are 10 weeks into a consolidation with a 27.62 buy point, according to IBD MarketSmith charts.
The Hamilton, Bermuda-based Golar LNG reported first-quarter financial results well below analysts' expectations. The global LNG shipping company announced a loss of 35 cents per share and revenue of $79.7 million. For the full fiscal year, Wall Street is forecasting GLNG earning 52 cent per share and $324.2 million in total sales. If it hits that mark, it would be the first time since fiscal year 2013 the company would record a profit.
GLNG stock has a 82 Composite Rating out of 99. It has a 98 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement with a 1 to 99 score. The rating shows how a stock's performance over the last 52 weeks holds up against all the other stocks in IBD's database. The EPS rating is 46.
LNG Stocks And The Market
LNG stocks have largely been consolidating since April, although demand for LNG has soared over the past year. Even before Russia's invasion of Ukraine, European electricity prices had skyrocketed. However, now with natural gas supplies from Russia largely off the table in Europe, supply is severely constrained.
In 2021, Russia provided nearly half the European Union's gas imports. So far in 2022, 75% of total U.S. LNG cargoes have gone to Europe, compared with 34% in 2021, according to federal data. The United States is the world's top natural gas producer.
U.S. natural gas prices were up 7% to around $8.8 per million British thermal units Thursday, moving towards 14-year highs and away from a more than 2-week low on Monday. Data from the U.S. Energy Information Administration (EIA) showed utilities added 44 billion cubic feet of gas to storage during the first week of August. The total stored natural gas is still down 10% year-over-year.
On Aug. 4, Freeport LNG announced it has agreed with U.S. regulators on the necessary steps to reopen its Quintana, Texas, export terminal. The company in a statement said it can complete repairs and have the export terminal operating by early October.
The privately held company had previously estimated that its export terminal, one of the largest in the country, would be offline for only three weeks after a June 8 fire and explosion shut it down. The facility is not expected to operate at full capacity until late 2022 at the earliest.
LNG total peak export capacity in 2021 was about 12.98 bcf/d, according to the EIA. The Freeport LNG plant can produce around 2 billion cubic feet per day (bcf/d) of LNG. That makes up more than 15% of U.S. LNG export capacity. U.S.
LNG Stock Roundup
LNG companies Cheniere Energy and New Fortress Energy posted mixed earnings results last week. Both missed on earnings views but beating revenue estimates. Golar LNG owns around 6% of NFE, which sits on the IBD 50 Top 10 stocks list.
Houston-based Cheniere is the largest producer of liquefied natural gas in the U.S. and one of the largest LNG operators in the world. Its services range from gas procurement and transport to vessel chartering and delivery. Cheniere owns and operates liquefied natural gas terminals near Corpus Christi, Texas.
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New Fortress Energy sits second on the IBD 50 stock list. The company ranks third in the Oil & Gas-Integrated industry group. Along with its earnings, NFE announced Thursday it had entered a partnership with Plug Power for a 120-megawatt industrial-scale green hydrogen plant near Beaumont, Texas. The plant would be one of the largest green hydrogen plants in North America, according to NFE.
PLUG stock spiked 16% Wednesday after it reported a second quarter loss greater than expected on Tuesday evening. Plug Power's IBD Relative Strength Rating was recently upped to 92.
A non-LNG stock — natural gas producer Devon Energy — also recently beat Wall Street predictions, with Q2 earnings surging 331% to $2.59 per share. Revenue grew 133% to $5.6 billion.
DVN increased its full-year production guidance by 3% to a range of 600,000- 610,000 oil-equivalent barrels per day. Devon Energy also adjusted its upstream capital guidance to between $2.2 billion-$2.4 billion, up from $2.1 billion.
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