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Golar LNG (GLNG) Q2 Earnings: Is a Disappointment in Store?
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Golar LNG Limited (GLNG - Free Report) is scheduled to report second-quarter 2018 results on Aug 23, before the market opens.
Last reported quarter, the company delivered a positive earnings surprise of 4.6%. Golar LNG incurred narrower-than-expected loss of 21 cents per share in the period. The Zacks Consensus Estimate for the same stood at a loss of 22 cents. The bottom line also improved substantially from the year-ago quarter’s figure. Total operating revenues came in at $66.2 million, above the Zacks Consensus Estimate of $60.5 million. Moreover, the top line soared more than 100% year over year. Results were boosted by improvements in hire rates and round-trip economics.
However, the picture for the second quarter isn’t as rosy. The Zacks Consensus Estimate is currently pegged at a loss of 19 cents, wider than 4 cents 90 days ago.
Let’s look into the factors responsible for such an outlook.
Factors at Play
Seasonal softening of the shipping market might hurt the company’s top line in the second quarter. Seasonal softening in activity induced a fall in charter rates to as low as $45kpd in April. The situation was aggravated by delays in the startup of the cold point LNG production facility and production interruptions at the Papua New Guinea facility.
Further, high vessel operating expenses could push up total operating costs and weigh on the company’s bottom line in the soon-to-be-reported quarter.
Owing to these headwinds, shares of the company have underperformed its industry in the April-June period. The stock has gained 7.7% compared with the industry’s rally of 10.9%.
However, the effects of these could be partly offset by strong revenues from the Time and voyage charter segment. The other segments are also anticipated to perform well in the quarter.
Earnings Whispers
Our proven model does not conclusively show that Golar LNG is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as elaborated below.
Earnings ESP: Golar LNG has an Earnings ESP of -31.58% as the Most Accurate Estimate is pegged at a loss of 25 cents, wider than the Zacks Consensus Estimate of a loss of 19 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Golar LNG carries a Zacks Rank #4 (Sell). We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Investors interested in the broader Transportation sector may check out some stocks worth considering like Frontline Ltd. (FRO - Free Report) and Hoegh LNG Partners LP as these possess the right combination of elements to come up with an earnings beat in the upcoming releases.
Hoegh LNG Partners has an Earnings ESP of +5.00% and a Zacks Rank of 3. The company will announce second-quarter financial numbers on Aug 23.
Upcoming Release
Ship Finance International Limited (SFL - Free Report) is a major ship owning company. The company will report second-quarter results on Aug 22.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Golar LNG (GLNG) Q2 Earnings: Is a Disappointment in Store?
Golar LNG Limited (GLNG - Free Report) is scheduled to report second-quarter 2018 results on Aug 23, before the market opens.
Last reported quarter, the company delivered a positive earnings surprise of 4.6%. Golar LNG incurred narrower-than-expected loss of 21 cents per share in the period. The Zacks Consensus Estimate for the same stood at a loss of 22 cents. The bottom line also improved substantially from the year-ago quarter’s figure. Total operating revenues came in at $66.2 million, above the Zacks Consensus Estimate of $60.5 million. Moreover, the top line soared more than 100% year over year. Results were boosted by improvements in hire rates and round-trip economics.
However, the picture for the second quarter isn’t as rosy. The Zacks Consensus Estimate is currently pegged at a loss of 19 cents, wider than 4 cents 90 days ago.
Let’s look into the factors responsible for such an outlook.
Factors at Play
Seasonal softening of the shipping market might hurt the company’s top line in the second quarter. Seasonal softening in activity induced a fall in charter rates to as low as $45kpd in April. The situation was aggravated by delays in the startup of the cold point LNG production facility and production interruptions at the Papua New Guinea facility.
Further, high vessel operating expenses could push up total operating costs and weigh on the company’s bottom line in the soon-to-be-reported quarter.
Owing to these headwinds, shares of the company have underperformed its industry in the April-June period. The stock has gained 7.7% compared with the industry’s rally of 10.9%.
However, the effects of these could be partly offset by strong revenues from the Time and voyage charter segment. The other segments are also anticipated to perform well in the quarter.
Earnings Whispers
Our proven model does not conclusively show that Golar LNG is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as elaborated below.
Earnings ESP: Golar LNG has an Earnings ESP of -31.58% as the Most Accurate Estimate is pegged at a loss of 25 cents, wider than the Zacks Consensus Estimate of a loss of 19 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Golar LNG carries a Zacks Rank #4 (Sell). We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Golar LNG Limited Price and EPS Surprise
Golar LNG Limited Price and EPS Surprise | Golar LNG Limited Quote
Stocks to Consider
Investors interested in the broader Transportation sector may check out some stocks worth considering like Frontline Ltd. (FRO - Free Report) and Hoegh LNG Partners LP as these possess the right combination of elements to come up with an earnings beat in the upcoming releases.
Frontline has an Earnings ESP of +1.18% and a Zacks Rank #3. The company will report second-quarter results on Aug 22. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hoegh LNG Partners has an Earnings ESP of +5.00% and a Zacks Rank of 3. The company will announce second-quarter financial numbers on Aug 23.
Upcoming Release
Ship Finance International Limited (SFL - Free Report) is a major ship owning company. The company will report second-quarter results on Aug 22.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>