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Golar LNG (GLNG) Down 11.1% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Golar LNG (GLNG - Free Report) . Shares have lost about 11.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Golar LNG due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Golar LNG's Q3 Loss in Line, Revenues Beat

Golar LNG reported an adjusted loss of 11 cents per share, in line with the Zacks Consensus Estimate. However, the amount of loss narrowed significantly from 43 cents a year ago.

Total operating revenues of $123 million, beat the Zacks Consensus Estimate of $87 million. Also, the top line surged more than 100% year over year. Of the total revenues, Liquefaction services revenues accounted for the bulk (44.3%), grossing $54.52 million. While Time and voyage charter revenues were $46.98 million (up more than 100%), Time charter revenues-collaborative arrangement were $16.83 million (up more than 100%). Meanwhile, Vessel and other management fees were $4.77 million (down 35.9%).

Daily TCE (Time Charter Equivalent) earnings increased to $41,200 from $19,600 in the previous quarter. Total operating expenses soared 85.5% in the quarter under discussion to $102.63 million. Vessel operating expenses escalated more than 100% year over year to $28.85 million due to higher-than-expected FLNG operating costs for Hilli Episeyo. Moreover, depreciation and amortization expenses climbed 64.1% year over year due to depreciation of FLNG Hilli Episeyo.

Liquidity

At the end of the third quarter, the company had cash and cash equivalents of $306.38 million compared with $214.86 million at December 2017 end. As of Sep 30, 2018, the company’s long-term debt totaled $1.79 billion compared with $1.02 billion as of Dec 31, 2017.




Outlook

The company anticipates fourth-quarter 2018 TCE in the band of $70,000 - $80,000. Golar Viking is expected to resume trading this December, leading to improvements in adjusted EBITDA and net cash generation in the first quarter of 2019. The improving shipping market is also anticipated to boost results.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted 20.24% due to these changes.

VGM Scores

At this time, Golar LNG has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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 #3 (Hold). We expect an in-line return from the stock in the next few months.




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