Cheniere Energy reported mixed second-quarter financials Thursday, missing on revenue expectations even as profits soared past predictions. Meanwhile, the company sees commercial "momentum," as prospects for a harsh winter in Europe are already driving up global rates for LNG transport. LNG stock moved down a fraction early Thursday.
LNG Stock: Cheniere Energy Earnings
Estimates: Analysts expected Cheniere Energy profits to slip 5% to $2.74 per share with revenue sinking 46% to $4.27 billion.
Results: Cheniere Energy reported earnings growing 93% to $5.61 with revenue falling 48% to $4.10 billion.
LNG stock edged down a fraction Thursday during premarket trade. On Wednesday, Cheniere Energy stock closed down 0.7% to 159.14. LNG transport and processor Golar LNG fell 0.8% early Thursday and Flex LNG edged down slightly. Meanwhile, LNG stock New Fortress Energy had yet traded.
Cheniere's number of LNG cargoes declined 4% to 149 in Q2. However, so far in 2023, Cheniere Energy's LNG cargoes have run flat compared to 2022.
Nasdaq Leads Wide Sell-Off, Forces This Change In Stock Market Outlook
While the company's LNG revenue decreased 59% to $3.19 billion in the second quarter, overall operating costs and expenses totaled $1.8 billion, down 72% vs. 2022. Cheniere Energy's LNG sales decline was primarily driven by a 50% fall in revenue from long-term liquefied natural gas sale agreements in Q2.
The company repurchased around 2.3 million shares in Q2 for $337 million. For year, LNG has purchased 5.4 million shares for $788 million.
Cheniere Lifts Outlook
Cheniere Energy also raised its full-year consolidated adjusted EBITDA guidance to $8.3 billion-$8.8 billion. That's up from the previous guidance of $8.2 billion-$8.7 billion. The LNG giant also now predicts distributable cash flow to total between $5.8 billion-$6.3 billion in 2023, a slight increase from the past forecast of $5.7 billion-$6.2 billion.
Cheniere Chief Executive Officer Jack Fusco said in a statement Thursday that LNG had accomplished "outstanding financial, commercial and operational results." Fusco added the company is "building significant commercial momentum."
Since the end of Q1, Cheniere Energy has reported three long-term LNG sale agreements. These include deals with the Norwegian state-owned energy company Equinor, Korea Southern Power and ENN Natural Gas — one of the largest private energy companies in China.
The Houston-based company is the largest producer of liquefied natural gas in the U.S. and one of the largest LNG operators in the world. Its services range from gas procurement and transport to vessel chartering and delivery. Cheniere owns and operates liquefied natural gas terminals near Corpus Christi, Texas.
In 2022, Cheniere Energy earned $5.64 per share, up from a loss of $9.25 in 2021. Meanwhile, Cheniere revenue more than doubled to $33.43 billion in 2022.
LNG Stock: Big Prices For Gas Tankers
The U.S. Energy Information Administration reported last week average front-month futures prices for LNG cargoes in East Asia were $11.13 per million British thermal units, down 72% compared to 2022.
LNG and U.S. natural gas prices have dropped considerably compared to last year. But traders appear set to spend big to ship liquefied natural gas ahead of the winter heating fuel demand season, Bloomberg reported Friday.
Daily charter rates for LNG carrier ships surged to $206,750 for October and $284,750 for November, more than doubling from current levels, according to data from Spark Commodities. If those rates hold, natural gas prices could jump, mirroring 2022 when the global LNG market rushed to replace Russian gas supplies.
The U.S. Energy Information Administration reported last week average front-month futures prices for LNG cargoes in East Asia were $11.13 per million British thermal units, down 72% compared to 2022.
Warren Buffett also continues to bet on energy and LNG. On July 10, the billionaire investor-led Berkshire Hathaway agreed to buy Dominion Energy's share of the Maryland-based Cove Point LNG export plant in a $3.3 billion deal.
U.S. Gas Deliveries To Export Terminals Sets Record
Natural gas deliveries to LNG export facilities in the U.S. averaged 12.8 billion cubic feet per day (bcf/d) in the first six months of 2023, a 4% increase compared to last year, according to a recent report by the Energy Information Administration (EIA).
Meanwhile, gas deliveries set a monthly record in April at 14.0 bcf/d, supported by high international demand for U.S. LNG exports, particularly in Europe, the EIA reported.
U.S. natural gas futures hovered around $2.50 per million British thermal units early Thursday. Prices are down around 60% from the same time last year when futures spiked to 14-year highs as Russia's invasion of Ukraine sparked fears of an energy crisis in Europe.
Meanwhile, natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands averaged $9.67 per million British thermal units, an 82% drop vs. 2022.
