Cheniere Energy, Inc. (LNG - Free Report) reported third-quarter 2018 net earnings per share of 26 cents, marginally missing the Zacks Consensus Estimate of 27 cents. The weaker-than-expected results can be attributed to high costs incurred during the quarter. However, the bottom line turned around from the year-ago quarter’s net loss of $1.09 on the back of increased operations from the additional trains in the Sabine Pass project.
The U.S. gas exporter’s quarterly revenues increased 29.6% to $1,819 million from $1,403 million recorded in the year-ago quarter. As such, its adjusted EBITDA rose to $569 million from $442 million in third-quarter 2017. Further, the top line surpassed the Zacks Consensus Estimate of $1,497 million in the quarter under review.
During the quarter, the company shipped 65 cargoes from the Sabine Pass liquefied natural gas terminal in Louisiana, reflecting an increase of 48% from a year ago. Total volumes of LNG exported in the reported quarter were 228 trillion British thermal units (TBtu) compared with 160 TBtu in the year-ago quarter.
Costs & Expenses
Overall costs and expenses rose 26% to $1,394 million from the same quarter last year. The increase is mainly attributed to higher cost of sales that jumped to $1,027 million from $824 million in the prior-year quarter, along with a rise in operating and maintenance expenses by 49% year over year to $170 million. Depreciation and amortization expenses also increased from $92 million a year ago to $113 million in the reported quarter.
Balance Sheet
As of Sep 30, 2018, Cheniere had approximately $989 million in cash and cash equivalents. It recorded $27,438 million in net long-term debt compared with the prior-year level of $25,336. The debt-to-capitalization ratio of the company now stands at 93.7%.
2018 Guidance Up, 2019 View Initiated
Cheniere raised its EBITDA guidance for full-year 2018 and provided preliminary guidance for 2019. Adjusted EBITDA is now expected in the band of $2,450-$2,550 million compared with the prior forecast of $2,300-$2,500 million. Distributable cash flow is now projected between $500 million and $600 million vis a vis the previous guided range of $400-$550 million.
For 2019, the company anticipates its adjusted EBITDA within $2,900-$3,200 million, with distributable cash flow expected between $600 million and $800 million.
Progress Report
Sabine Pass Liquefaction Project (SPL): Sabine Pass is North America’s first large-scale liquefied gas export facility. Altogether, Cheniere intends to construct up to six trains at the Sabine Pass, with each train expected to have a capacity of about 4.5 million tons per annum (Mtpa). Notably, expected run-rate LNG production is up from 4.3-4.6 Mtpa per train to 4.4-4.9 Mtpa. While Trains 1, 2, 3 and 4 are functional; Train 5 is currently undergoing commissioning. Train 6 is being commercialized and has secured the necessary regulatory approvals. The company expects the fifth train to come online in the first quarter of 2019.
Corpus Christi Liquefaction Project (CCL): Cheniere’s Corpus Christi LNG project, under which the company intends to develop three trains, is expected to come online in 2019. Each train is expected to have a nominal production capacity of 4.5 Mtpa of LNG. Train 1 is undergoing commissioning, whereas Train 2 and 3 are under construction.
Corpus Christi Expansion Project: Cheniere intends to develop seven midscale liquefaction trains adjacent to the CCL Project. The total production capacity of these trains is expected to be approximately 9.5 Mtpa.
Zacks Rank & Key Picks
Currently, Cheniere carries a Zacks Rank #3 (Hold).
Investors interested in the Energy sector can opt for some better-ranked stocks like Bonanza Creek Energy, Inc. , Hess Corporation (HES - Free Report) and Murphy Oil Corporation (MUR - Free Report) . While Bonanza Creek and Hess currently sport a Zacks Rank #1 (Strong Buy), Murphy Oil carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bonanza Creek delivered average positive earnings surprise of 12.93% in the last four reported quarters.
Hess pulled off average positive earnings surprise of 230.48% in the trailing four reported quarters.
Murphy Oil recorded a positive earnings surprise in each of the trailing four quarters, with average beat of 76.16%.
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Cheniere Energy, Inc. (LNG - Free Report) reported third-quarter 2018 net earnings per share of 26 cents, marginally missing the Zacks Consensus Estimate of 27 cents. The weaker-than-expected results can be attributed to high costs incurred during the quarter. However, the bottom line turned around from the year-ago quarter’s net loss of $1.09 on the back of increased operations from the additional trains in the Sabine Pass project.
The U.S. gas exporter’s quarterly revenues increased 29.6% to $1,819 million from $1,403 million recorded in the year-ago quarter. As such, its adjusted EBITDA rose to $569 million from $442 million in third-quarter 2017. Further, the top line surpassed the Zacks Consensus Estimate of $1,497 million in the quarter under review.
During the quarter, the company shipped 65 cargoes from the Sabine Pass liquefied natural gas terminal in Louisiana, reflecting an increase of 48% from a year ago. Total volumes of LNG exported in the reported quarter were 228 trillion British thermal units (TBtu) compared with 160 TBtu in the year-ago quarter.
Costs & Expenses
Overall costs and expenses rose 26% to $1,394 million from the same quarter last year. The increase is mainly attributed to higher cost of sales that jumped to $1,027 million from $824 million in the prior-year quarter, along with a rise in operating and maintenance expenses by 49% year over year to $170 million. Depreciation and amortization expenses also increased from $92 million a year ago to $113 million in the reported quarter.
Balance Sheet
As of Sep 30, 2018, Cheniere had approximately $989 million in cash and cash equivalents. It recorded $27,438 million in net long-term debt compared with the prior-year level of $25,336. The debt-to-capitalization ratio of the company now stands at 93.7%.
2018 Guidance Up, 2019 View Initiated
Cheniere raised its EBITDA guidance for full-year 2018 and provided preliminary guidance for 2019. Adjusted EBITDA is now expected in the band of $2,450-$2,550 million compared with the prior forecast of $2,300-$2,500 million. Distributable cash flow is now projected between $500 million and $600 million vis a vis the previous guided range of $400-$550 million.
For 2019, the company anticipates its adjusted EBITDA within $2,900-$3,200 million, with distributable cash flow expected between $600 million and $800 million.
Progress Report
Sabine Pass Liquefaction Project (SPL): Sabine Pass is North America’s first large-scale liquefied gas export facility. Altogether, Cheniere intends to construct up to six trains at the Sabine Pass, with each train expected to have a capacity of about 4.5 million tons per annum (Mtpa). Notably, expected run-rate LNG production is up from 4.3-4.6 Mtpa per train to 4.4-4.9 Mtpa. While Trains 1, 2, 3 and 4 are functional; Train 5 is currently undergoing commissioning. Train 6 is being commercialized and has secured the necessary regulatory approvals. The company expects the fifth train to come online in the first quarter of 2019.
Corpus Christi Liquefaction Project (CCL): Cheniere’s Corpus Christi LNG project, under which the company intends to develop three trains, is expected to come online in 2019. Each train is expected to have a nominal production capacity of 4.5 Mtpa of LNG. Train 1 is undergoing commissioning, whereas Train 2 and 3 are under construction.
Corpus Christi Expansion Project: Cheniere intends to develop seven midscale liquefaction trains adjacent to the CCL Project. The total production capacity of these trains is expected to be approximately 9.5 Mtpa.
Zacks Rank & Key Picks
Currently, Cheniere carries a Zacks Rank #3 (Hold).
Investors interested in the Energy sector can opt for some better-ranked stocks like Bonanza Creek Energy, Inc. , Hess Corporation (HES - Free Report) and Murphy Oil Corporation (MUR - Free Report) . While Bonanza Creek and Hess currently sport a Zacks Rank #1 (Strong Buy), Murphy Oil carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bonanza Creek delivered average positive earnings surprise of 12.93% in the last four reported quarters.
Hess pulled off average positive earnings surprise of 230.48% in the trailing four reported quarters.
Murphy Oil recorded a positive earnings surprise in each of the trailing four quarters, with average beat of 76.16%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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