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Why Is Golar LNG (GLNG) Up 6.6% Since Last Earnings Report?

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It has been about a month since the last earnings report for Golar LNG (GLNG - Free Report) . Shares have added about 6.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Golar LNG 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.

Golar LNG Posts Q3 Loss, Revenues Miss

Golar LNG incurred a loss (excluding 5 cents from non-recurring items) of 16 cents per share in third-quarter 2020, wider than the Zacks Consensus Estimate. Moreover, the metric increased 54% year over year. Low costs drove the bottom line.

Adjusted revenues of $94.7 million surpassed the Zacks Consensus Estimate of $88.3 million. Total operating revenues came in at $95.2 million. The top line declined 4% year over year, owing to COVID-19 induced closure of the shipyard of the shipyard where Golar Tundra was being dry-docked and significant reduction in fleet utilization. Notably, FLNG Hilli Episeyo maintained its 100% commercial uptime in the quarter under review.

FLNG revenues accounted for bulk (57.9%) of the company’s top line. Revenues from vessel and other operations was $40.2 million compared with $46.2 million reported in the second quarter. Notably, Time and voyage charter revenues plunged 16.4% sequentially. Additionally, Time Charter Equivalent (“TCE”) earnings increased to $39,100 per day in the quarter under discussion, compared with $35,200 in third-quarter 2019. Golar LNG anticipates TCE earnings to be above $50,000 per day with utilization above 80% in fourth-quarter 2020.

Vessel-operating expenses of $28.23 million increased 16.4% sequentially. The upside can be attributed to catch-up repairs and maintenance carried out following the lifting of COVID restrictions over the northern hemisphere summer months.

Total administrative expenses dropped 7% from second-quarter 2020 to $7.98 million due to ongoing cost-reduction efforts such as lower payroll and travel costs. Project-development expenses of $1.2 million were flat year over year

The company exited the third quarter with a cash balance of $238.9 million, of which $76.7 million was unrestricted cash. As of Sep 30, 2020, its total debt (current and non-current) was $2.54 billion.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted -6.67% due to these changes.

VGM Scores

At this time, Golar LNG has a nice Growth Score of B, 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 second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Golar LNG has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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