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Cheniere Energy (LNG) Q1 Earnings & Sales Beat Estimates

Cheniere Energy LNG reported a first-quarter 2023 adjusted profit of $6.89 per share, which outpaced the Zacks Consensus Estimate of $5.96. This could be attributed to higher contributions from certain portfolio optimization activities and increasing total margins per metric million British thermal units of liquefied natural gas (“LNG”) delivered.

The bottom line, however, deteriorated from the year-ago quarter’s level of $7.35. This was due to a higher provision for income tax as well as a higher contribution to noncontrolling interests in the reported quarter.

Revenues came in at $7,310 million, which beat the Zacks Consensus Estimate of $6,576 million. This can be attributed to the year-over-year increase in cargoes shipped and a surge in volumes and prices. The top line, however, decreased 2.3%from the year-ago figure of $7,484 million due to lower LNG revenues.

Cheniere Energy reported an adjusted EBITDA of $3.6 billion, with distributable cash flow (DCF) of around $2.9 billion. In the reported quarter, the company shipped 167 cargoes compared with 160 in the year-ago period. Total volumes of LNG exported were 602 trillion British thermal units (TBtu) compared with 585 TBtu in the comparable period of 2022.

Cheniere Energy, Inc. Price, Consensus and EPS Surprise

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

As of Mar 31, 2023, Cheniere Energy had approximately $2.9 billion of cash and cash equivalents. Its net long-term debt amounted to $23.9 billion.

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As of the same date, the company reported a cost (recovery) of sales of $1,539 million.

Shareholders Capital-Return Initiative

Cheniere Energy repurchased approximately 3.1 million shares of common stock for around $450 million. It also declared a quarterly cash dividend of 395 cents per common share payable on May 17, 2023, to shareholders of record as of the close of business on May 10, 2023.

Guidance

The company expects adjusted EBITDA in the $8.2-$8.7 billion range for 2023.

It revised its DCF to the band of $5.7-$6.2 billion from the previously guided range of $5.5-$6 billion.

Project Updates

Sabine Pass Liquefaction Project (SPL):   Cheniere Energy operates six natural gas liquefaction trains for a total production capacity of about 30 million tons per annum (mtpa) of LNG at the Sabine Pass LNG terminal (the SPL Project). Sabine Pass Train 6 reached substantial completion over a year ahead of the guaranteed schedule, and the company was able to bring the train to full utilization and stable operations well ahead of its plan.

Corpus Christi Expansion Project: Cheniere Energy plans to develop seven midscale liquefaction trains adjacent to the CCL Project. The total production capacity of these trains is assumed to be 20 mtpa.

Zacks Rank and Key Picks

Currently, Cheniere Energy carries a Zacks Rank #3 (Hold). Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI, sporting a Zacks Rank #1 (Strong Buy), and Marathon Petroleum MPC and Ranger Energy Services RNGR, each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CVR Energy: CVI is worth approximately $2.63 billion. CVI currently pays investors $2.00 per share, or 7.63%, on an annual basis.

The company currently has a forward P/E ratio of 6.59. In comparison, its industry has an average forward P/E of 8.60, which means CVI is trading at a discount to the group.

Marathon Petroleum: MPC is valued at around $58.02 billion. It delivered an average earnings surprise of 20.91% for the last four quarters and its current dividend yield is 2.30%.

The company currently has a forward P/E ratio of 6.36. In comparison, its industry has an average forward P/E of 9.10, which means MPC is trading at a discount to the group.

Ranger Energy Services: RNGR is valued at around $242.99 million. In the past year, its shares have gained 16.8%.

Ranger Energy Services currently has a forward P/E ratio of 5.30. In comparison, its industry has an average forward P/E of 11.60, which means RNGR is trading at a discount to the group.

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