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Cheniere's (LNG) Q2 Earnings Beat Estimates, Revenues Lag
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Cheniere Energy, Inc. (LNG - Free Report) reported second-quarter 2024 adjusted profit of $3.84 per share, which beat the Zacks Consensus Estimate of $1.74. This outperformance can be attributed to a year-over-year decrease in costs and expenses. However, the bottom line deteriorated from the year-ago quarter’s level of $5.61.
Revenues totaled $3.3 billion, which missed the Zacks Consensus Estimate of $3.4 billion. The top line also decreased 20.7% from the year-ago quarter’s level of $4.1 billion. This was due to the year-over-year reduction in LNG revenues.
Cheniere reported consolidated adjusted EBITDA of $1.3 billion in the second quarter, down 28.8 % from a year-ago quarter’s level. This decline was due to moderating international gas prices and a higher share of LNG sold under long-term contracts, which resulted in lower margins per metric million british thermal units (MMBtu) of LNG delivered compared to the previous year.
Cheniere Energy, Inc. Price, Consensus and EPS Surprise
Distributable cash flow (DCF) came in at $0.70 billion. In the reported quarter, the company shipped 155 cargoes compared with 149 in the year-ago period.
The total volume of liquid natural gas exported came in at 553 trillion British thermal units (TBtu) compared with 536 TBtu in the comparable period of 2023.
As part of Cheniere’s detailed capital allocation strategy, the company repurchased more than 3.1 million shares for about $496 million in the three months ended Jun 30 and approximately 10.7 million shares for around $1.7 billion in the six months ended Jun 30. Additionally, Cheniere repaid $150 million and $300 million of consolidated debt in the respective periods and paid quarterly dividends of 43.5 cents and 87 cents per share of common stock.
The company declared a quarterly cash dividend of 43.5 cents per common share (which was consistent with the previous quarter's level), payable on Aug 16.
In June 2024, the Houston, TX, based oil and gas storage and transportation company expanded its '20/20 Vision' plan by authorizing an additional $4 billion for share repurchases through 2027. The company also declared a planned 15% increase in its quarterly dividend to $2 per share, effective from the third quarter of 2024, subject to board approval.
Costs & Balance Sheet
Costs and expenses amounted to $1.7 billion for the second quarter, down 7.3% from the prior-year quarter’s level.
As of Jun 30, 2024, Cheniere had approximately $2.4 billion of cash and cash equivalents. Its net long-term debt amounted to $22.6 billion, with a debt-to-capitalization of 72.4%.
Guidance
The company expects consolidated adjusted EBITDA in the $5.7-$6.1 billion range for 2024.
It also expects DCF to be in the band of $3.1-$3.5 billion.
Business Development
LNG Sale and Purchase Agreement: In June 2024, Cheniere Energy’s subsidiary Cheniere Marketing secured a long-term LNG supply contract with Galp Trading S.A., with deliveries expected to commence in the early 2030s. This agreement is contingent on the approval of the second train of the SPL Expansion Project.
Regulatory Progress: The company achieved a significant milestone with the Federal Energy Regulatory Commission’s (FERC) approval of the environmental assessment for the CCL Midscale Trains 8 & 9 Project in June. Cheniere anticipates obtaining all necessary permits for this project by the end of 2025.
Project Updates
Sabine Pass Liquefaction Project (SPL): Cheniere operates six natural gas liquefaction trains for a total production capacity of about 30 million tons per annum (mtpa) of liquid natural gas at the Sabine Pass LNG terminal in Cameron Parish, LA.
SPL Expansion Project: Cheniere Partners is developing an expansion of the SPL Project, which could produce up to 20 mtpa of liquid natural gas. In February 2024, specific subsidiaries of Cheniere Partners applied to the FERC, seeking approval to site, construct and operate the SPL Expansion Project. Additionally, the subsidiaries submitted an application to the Department of Energy (DOE), seeking authorization to export liquid natural gas to the Free-Trade Agreement (FTA) and non-FTA countries. Notably, both applications exclude debottlenecking.
CCL Project: The company operates three natural gas liquefaction trains at the Corpus Christi LNG terminal, with a total production capacity of approximately 15 mtpa.
CCL Stage 3 Project: Cheniere is constructing an expansion next to the CCL Project, which includes seven midscale Trains. This expansion is expected to have a total production capacity exceeding 10 mtpa of liquid natural gas. The first production from the first train of the CCL Stage 3 Project is expected by the end of 2024, per a progress update as of Jun 30.
CCL Midscale Trains 8 & 9 Project: Cheniere, along with its partner, is developing two midscale Trains adjacent to the CCL Stage 3 Project, with an anticipated total production capacity of about 3 mtpa of liquid natural gas. In March 2023, certain company subsidiaries submitted an application to FERC for site approval, to construct and operate the project.
Additionally, in April 2023, Cheniere applied to DOE, seeking authorization to export liquid natural gas to FTA and non-FTA countries. In July 2023, the company received approval from the DOE to export liquid natural gas to FTA countries.
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter DCF was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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Cheniere's (LNG) Q2 Earnings Beat Estimates, Revenues Lag
Cheniere Energy, Inc. (LNG - Free Report) reported second-quarter 2024 adjusted profit of $3.84 per share, which beat the Zacks Consensus Estimate of $1.74. This outperformance can be attributed to a year-over-year decrease in costs and expenses. However, the bottom line deteriorated from the year-ago quarter’s level of $5.61.
Revenues totaled $3.3 billion, which missed the Zacks Consensus Estimate of $3.4 billion. The top line also decreased 20.7% from the year-ago quarter’s level of $4.1 billion. This was due to the year-over-year reduction in LNG revenues.
Cheniere reported consolidated adjusted EBITDA of $1.3 billion in the second quarter, down 28.8 % from a year-ago quarter’s level. This decline was due to moderating international gas prices and a higher share of LNG sold under long-term contracts, which resulted in lower margins per metric million british thermal units (MMBtu) of LNG delivered compared to the previous year.
Cheniere Energy, Inc. Price, Consensus and EPS Surprise
Cheniere Energy, Inc. price-consensus-eps-surprise-chart | Cheniere Energy, Inc. Quote
Distributable cash flow (DCF) came in at $0.70 billion. In the reported quarter, the company shipped 155 cargoes compared with 149 in the year-ago period.
The total volume of liquid natural gas exported came in at 553 trillion British thermal units (TBtu) compared with 536 TBtu in the comparable period of 2023.
As part of Cheniere’s detailed capital allocation strategy, the company repurchased more than 3.1 million shares for about $496 million in the three months ended Jun 30 and approximately 10.7 million shares for around $1.7 billion in the six months ended Jun 30. Additionally, Cheniere repaid $150 million and $300 million of consolidated debt in the respective periods and paid quarterly dividends of 43.5 cents and 87 cents per share of common stock.
The company declared a quarterly cash dividend of 43.5 cents per common share (which was consistent with the previous quarter's level), payable on Aug 16.
In June 2024, the Houston, TX, based oil and gas storage and transportation company expanded its '20/20 Vision' plan by authorizing an additional $4 billion for share repurchases through 2027. The company also declared a planned 15% increase in its quarterly dividend to $2 per share, effective from the third quarter of 2024, subject to board approval.
Costs & Balance Sheet
Costs and expenses amounted to $1.7 billion for the second quarter, down 7.3% from the prior-year quarter’s level.
As of Jun 30, 2024, Cheniere had approximately $2.4 billion of cash and cash equivalents. Its net long-term debt amounted to $22.6 billion, with a debt-to-capitalization of 72.4%.
Guidance
The company expects consolidated adjusted EBITDA in the $5.7-$6.1 billion range for 2024.
It also expects DCF to be in the band of $3.1-$3.5 billion.
Business Development
LNG Sale and Purchase Agreement: In June 2024, Cheniere Energy’s subsidiary Cheniere Marketing secured a long-term LNG supply contract with Galp Trading S.A., with deliveries expected to commence in the early 2030s. This agreement is contingent on the approval of the second train of the SPL Expansion Project.
Regulatory Progress: The company achieved a significant milestone with the Federal Energy Regulatory Commission’s (FERC) approval of the environmental assessment for the CCL Midscale Trains 8 & 9 Project in June. Cheniere anticipates obtaining all necessary permits for this project by the end of 2025.
Project Updates
Sabine Pass Liquefaction Project (SPL): Cheniere operates six natural gas liquefaction trains for a total production capacity of about 30 million tons per annum (mtpa) of liquid natural gas at the Sabine Pass LNG terminal in Cameron Parish, LA.
SPL Expansion Project: Cheniere Partners is developing an expansion of the SPL Project, which could produce up to 20 mtpa of liquid natural gas. In February 2024, specific subsidiaries of Cheniere Partners applied to the FERC, seeking approval to site, construct and operate the SPL Expansion Project. Additionally, the subsidiaries submitted an application to the Department of Energy (DOE), seeking authorization to export liquid natural gas to the Free-Trade Agreement (FTA) and non-FTA countries. Notably, both applications exclude debottlenecking.
CCL Project: The company operates three natural gas liquefaction trains at the Corpus Christi LNG terminal, with a total production capacity of approximately 15 mtpa.
CCL Stage 3 Project: Cheniere is constructing an expansion next to the CCL Project, which includes seven midscale Trains. This expansion is expected to have a total production capacity exceeding 10 mtpa of liquid natural gas. The first production from the first train of the CCL Stage 3 Project is expected by the end of 2024, per a progress update as of Jun 30.
CCL Midscale Trains 8 & 9 Project: Cheniere, along with its partner, is developing two midscale Trains adjacent to the CCL Stage 3 Project, with an anticipated total production capacity of about 3 mtpa of liquid natural gas. In March 2023, certain company subsidiaries submitted an application to FERC for site approval, to construct and operate the project.
Additionally, in April 2023, Cheniere applied to DOE, seeking authorization to export liquid natural gas to FTA and non-FTA countries. In July 2023, the company received approval from the DOE to export liquid natural gas to FTA countries.
LNG currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter DCF was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.