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Why Is Cheniere Energy Partners, LP (CQP) Down 3% Since Last Earnings Report?

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A month has gone by since the last earnings report for Cheniere Energy Partners, LP (CQP - Free Report) . Shares have lost about 3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Cheniere Energy Partners, LP 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 drivers.

Cheniere Partners Q1 Earnings & Revenues Beat Estimates

The company reported first-quarter earnings per unit of 73 cents, beating the Zacks Consensus Estimate by a penny. The bottom line improved from 64 cents per unit in the year-ago quarter.

Revenues of $3,328 million were higher than the year-ago level of $1,963 million and beat the Zacks Consensus Estimate of $3,142 million.

The strong quarterly earnings can be attributed to increased LNG volumes delivered and higher prices. Also, the distribution hike signals its operational strength to investors.

Cash Distribution

Cheniere Energy Partners announced a cash distribution of $1.05 per common unit, comprising a base amount of 77.5 cents and a variable amount of 27.5 cents. The metric suggests a 50% improvement from the prior distribution. The common unit distribution will be paid out on May 13, 2022, to unitholders of record as of May 5, 2022.

Operations

Cheniere Energy Partners sent 105 cargoes in the first quarter, up from 89 in the year-ago period. Total LNG volumes loaded in the quarter were 385 trillion British thermal units (TBtu), higher than the year-ago level of 317 TBtu.

Adjusted EBITDA in the first quarter was $1,031 million, up from the year-ago level of $779 million. Profits increased in the first quarter due to a rise in the volumes of LNG delivered and increased prices per MMBtu of LNG delivered.

Costs and Expenses

The cost of sales for the quarter was $2,562 million, up from the year-ago period’s $948 million. Operating and maintenance expenses increased to $170 million from $149 million in first-quarter 2021.

Total costs and expenses for the quarter were $2,966 million, significantly up from $1,345 million in the March-end quarter of 2021.

Cash Flow

Cheniere Energy Partners generated an operating net cash flow of $800 million for the first three months of 2022, higher than the year-ago level of $588 million.

Balance Sheet

As of Mar 31, 2022, the partnership had $1,156 million in cash and cash equivalents, rising from $876 million at the fourth-quarter end. Cheniere Energy had a net long-term debt of $17,184 million, higher than $17,177 million at the fourth-quarter end.

Guidance

For 2022, Cheniere Energy Partners reiterated its guidance for distribution per unit at $4-$4.25.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

The consensus estimate has shifted 5.11% due to these changes.

VGM Scores

At this time, Cheniere Energy Partners, LP has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Cheniere Energy Partners, LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Cheniere Energy Partners, LP is part of the Zacks Oil and Gas - Production and Pipelines industry. Over the past month, Kinder Morgan (KMI - Free Report) , a stock from the same industry, has gained 5.9%. The company reported its results for the quarter ended March 2022 more than a month ago.

Kinder Morgan reported revenues of $4.29 billion in the last reported quarter, representing a year-over-year change of -17.6%. EPS of $0.32 for the same period compares with $0.60 a year ago.

Kinder Morgan is expected to post earnings of $0.26 per share for the current quarter, representing a year-over-year change of +13%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

Kinder Morgan has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.


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