Liquefied natural gas transporter Golar LNG posted mixed financial results Wednesday, beating earnings views but missing on revenue in the third quarter. Fellow LNG transporter Flex LNG topped earnings and revenue views in the third quarter Tuesday, as a strong LNG market has boosted its backlog. The LNG stocks both fell during Wednesday trading.
The reports from the two Bermuda-based companies come amid volatile natural gas prices and as European gas stores are mostly filled for the winter.
U.S. natural gas prices edged up 2.3% to $6.76 per million British thermal units Thursday, as futures are well off the recent lows of $5.50 in late October. Prices are up more than 50% since the start of the year, but are around 40% off a 14-year high hit in August.
Global energy prices have oscillated in recent weeks amid fears of a recession resulting in oil and gas demand destruction. At the same time, Russia's invasion of Ukraine has tightened global crude oil and natural gas supplies, sending prices to long-term highs during the summer.
On Tuesday, it was reported that two missiles landed in the Poland border town of Przewodow, north of Lviv, Ukraine's most western city, killing two people. The rockets crossing into the NATO country, and killing civilians, came as Russia sent a barrage of missiles into Ukraine.
The Wall Street Journal reported Wednesday the missiles are believed to be Russian made but were fired from a Ukraine air defense system.
Since Russia invaded Ukraine in February, it has mostly shut down its supply of natural gas to the European Union as a consequence of the war. That has supercharged Europe's demand for LNG, making it a key competitor with Asia for supply.
Cheniere Energy missed earnings estimates in early November, reporting a third-quarter loss when analysts had projected booming profits.
Golar LNG
Estimates: Analysts predict EPS jumping to 35 cents in the third quarter, up from an 84 cent loss a year ago. Wall Street forecasts sales dropping 32% to $69.7 million, according to FactSet.
Results: Golar LNG earned 40 cents per share while revenue dropped 35% to $68.6 million in the third quarter, according to FactSet.
GLNG shares dropped 5.8% to 24.36 Wednesday during market trading. On Tuesday, the stock edged down 0.2%. Shares rose 2.1% to 25.92 Monday. This LNG stock is also in consolidation with a 30.76 buy point. Shares dropped below the 50-day moving average on Nov. 9 and are now meeting resistance at that key level.
Golar LNG owns and operates marine LNG infrastructure. It also develops floating LNG liquefaction terminals and FSRU projects based on converting existing, traditional, LNG carriers.
Hamilton, Bermuda-based Golar LNG reported in August that it earned 29 cents per share in the second quarter, a steep jump over a loss of 17 cents per share in Q2 2021, according to FactSet. Total sales fell 16% to $86.1 million in the second quarter.
GLNG reported first-quarter financial results well below analysts' expectations. The global LNG shipping company announced a loss of 35 cents per share and revenue of $79.7 million.
LNG stock GLNG has a 91 Composite Rating out of 99. It has a 97 Relative Strength Rating. The EPS rating is 80.
LNG Stocks: Flex LNG Earnings
Estimates: The Street forecast earnings increasing 27% to 76 cents per share. Sales were expected to grow 11% to $91.2 million, according to FactSet.
Results: Flex LNG reported EPS of 79 cents, a gain of 32% compared to the year before. Revenue grew 11% coming in at $91.3 billion.
The company also announced Tuesday a quarterly dividend of 75 cents per share, based on its "strong freight market" along with its "extensive contract backlog" and "strong financial position."
Flex LNG said its fleet is fully booked through the rest of 2022 and 2023. The company added its current backlog for fixed time charters is 49 years. This could extend to 77 years with charterer options, according to Flex LNG.
FLNG Stock
Flex LNG stock dropped 3.3% Wednesday to 32.16. Shares had fallen 4.5% Tuesday. On Monday, shares advanced 2.4% to 34.84.
The stock is in consolidation with an official 37.09 buy point, according to MarketSmith. The stock is also shaping a handle, which could lower the buy point to 35.52 before the start of trade on Tuesday.
The Bermuda-based liquefied natural gas transporter and processor focuses on LNG shipping with its fleet of LNG Carriers and Floating Storage Regasification Units (FSRUs). The company operates thirteen LNG carriers.
FSRUs offer added flexibility compared to traditional land-based gas terminals. These vessels have the onboard capability to re-gasify the LNG and deliver natural gas through both offshore and near-shore receiving facilities.
In Q2, Flex LNG missed views, with EPS growing 110% to 61 cents per share and sales increasing 29% to $84.2 million.
LNG stock Flex LNG ranks fourth in the Oil & Gas-Transport/Pipeline industry group. FLNG has a Composite Rating of 98. It has a 96 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement, with a 1 to 99 score. The rating shows how a stock's performance over the last 52 weeks holds up against all the other stocks in IBD's database. The EPS rating is 98.
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