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Cheniere Energy Q4 Earnings, Sales Top on Robust LNG Revenues

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Cheniere Energy, Inc. (LNG - Free Report) recently reported strong fourth-quarter 2019 results.

This largest U.S. liquefied natural gas exporter delivered earnings per share of 71 cents, beating the Zacks Consensus Estimate for earnings of 54 cents. The figure also skyrocketed 173% from the year-ago earnings of 26 cents. Solid contribution from LNG revenues led to this outperformance.  Precisely, revenues from LNG came in at $2,871 million, surpassing the Zacks Consensus Estimate of $2,706 million and also increasing 27.8% from the year-ago value of $2,245 million.

Owing to higher LNG volumes, quarterly revenues rose 26.2% to $3,007 million from $2,383 million a year ago. The top line also beat the Zacks Consensus Estimate of $2,657 million in the quarter under review.

The company posted adjusted EBITDA of $987 million with DCF of around $780 million. During the quarter, Cheniere shipped 130 cargoes, jumping 62.5% from the year-earlier figure. Total volumes of LNG exported were 457 trillion British thermal units (TBtu) compared with 284 TBtu in the prior year.

Costs & Balance Sheet

Overall costs and expenses surged 33.6% from the corresponding quarter of last year to $1,991 million. This increase is mainly attributed to higher operating and maintenance expenses that more than doubled to $330 million in the quarter under consideration. Also, depreciation and amortization expenses soared 100.9% from the year-ago quarter to $233 million. Further, selling, general and administrative expenses scaled up to $88 million from $75 million in the prior-year quarter.

As of Dec 31, Cheniere had approximately $2,474 million in cash and cash equivalents. Its net long-term debt was $30,774 million (with a debt-to-capitalization ratio of 92.6%).

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

2020 Guidance

Cheniere reiterated its guidance for the full year. It anticipates adjusted EBITDA within $3.8-$4.1 billion with distributable cash flow between $1 billion and $1.3 billion.

Project Updates

Sabine Pass Liquefaction Project (SPL): Sabine Pass is North America’s first large-scale liquefied gas export facility. Cheniere 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, run-rate of LNG production is anticipated within 4.7-5 Mtpa. While Trains 1 through 5 are functional, Train 6 is currently under construction with completion expected within the first half of 2023. 

Corpus Christi Liquefaction Project (CCL): Under this project, the company intends to build three trains. Each train’s estimated nominal production capacity is 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 enter service in the first half of 2021.

Corpus Christi Expansion Project: Cheniere aims 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 has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Contango Oil & Gas Company , Apache Corporation (APA - Free Report) and Earthstone Energy, Inc. , each carrying a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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