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Cheniere's (LNG) Q4 Earnings and Revenues Beat Estimates

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Cheniere Energy Inc.’s (LNG - Free Report) stock has been stable since the company’s fourth-quarter 2020 earnings announcement on Feb 24.

Despite this industry player’s impressive earnings and revenues and its increased adjusted EBITDA and a solid Distributable Cash Flow (DCF) guidance for 2021, the company’s shares failed to display an uptrend.

Behind the Earnings Headlines

This largest U.S. liquefied natural gas (LNG - Free Report) exporter reported adjusted earnings per share of 84 cents in the fourth quarter, beating the Zacks Consensus Estimate of 79 cents as well as the year-ago quarter’s earnings of 71 cents, attributable to better-than-expected LNG revenues.  

Meanwhile, revenues from LNG came in at $2,688 million, decreasing 33.3% from the year-ago number of $2,871 million. However, the same beat the Zacks Consensus Estimate of $2,569 million.

Quarterly revenues declined 7.3% to $2.79 billion from $3.01 billion a year ago due to year-over-year fall in LNG revenues. However, the top line outpaced the Zacks Consensus Estimate of $2.66 billion in the quarter under review.

The company posted adjusted EBITDA of $1.05 billion with DCF of around $330 million. During the quarter, Cheniere Energy shipped 130 cargoes, in line with the year-earlier figure. Total volumes of LNG exported were 464 trillion British thermal units (TBtu) compared with 457 TBtu in the prior year.

Cheniere Energy, Inc. Price, Consensus and EPS Surprise

Cheniere Energy, Inc. Price, Consensus and EPS Surprise

Cheniere Energy, Inc. price-consensus-eps-surprise-chart | Cheniere Energy, Inc. Quote

Costs & Balance Sheet

Overall costs and expenses rose 26.1% from the corresponding quarter of last year to $2,511 million. This rise is mainly attributed to higher cost of sales expenses that climbed 41.3% from the year-ago quarter to $1,866 million. 

As of Dec 31, 2020, Cheniere Energy had approximately $1,628 million in cash and cash equivalents. Its net long-term debt was $30,471 million.

Guidance

Per Jack Fusco, Cheniere Energy’s president and CEO, “We are in the final stages of commissioning Train 3 at Corpus Christi and look forward to placing that project into service in the coming weeks. Additionally, the global LNG market has strengthened significantly since our last quarterly update, improving our outlook for the remainder of the year. Today we are raising our 2021 financial guidance and are confident in our ability to once again deliver reliable financial results this year and to progress on commercializing additional portfolio volumes as well as Corpus Christi Stage 3”.

Cheniere Energy reiterated its outlook for the current year. It anticipates adjusted EBITDA within $4.1-$4.4 billion with distributable cash flow between $1.4 billion and $1.7 billion.

Project Updates

Sabine Pass Liquefaction Project (SPL): Sabine Pass is North America’s first large-scale liquefied gas export facility. Cheniere Energy intends to construct up to six trains at the Sabine Pass with each train’s expected capacity to be 4.5 million tons per annum (Mtpa). Notably, the run-rate of LNG production is projected within 4.7-5 Mtpa. While Trains 1 to 5 are functional, Train 6 is currently under construction with completion estimated within the second half of 2022. 

Corpus Christi Liquefaction Project (CCL): Under this project, the company aims to build three trains, each with a nominal production capacity predicted to be 4.5 Mtpa of LNG. Notably, Train 1 and 2 are functional while Train 3 is under construction. In June 2019, the first commissioned cargo from Train 2 was dispatched. Train 3 is expected to come online in the first half of 2021.

Corpus Christi Expansion Project: Cheniere Energy looks to develop seven midscale liquefaction trains adjacent to the CCL Project. Total production capacity of these trains is assumed to be 10 Mtpa.

Zacks Rank & Key Picks

Cheniere Energy currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Matador Resources Company (MTDR - Free Report) , Diamondback Energy, Inc. (FANG - Free Report) and Denbury Inc. (DEN - Free Report) , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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