Upcoming Earnings Report: Cheniere Energy, Inc. and Its Impact on the LNG Market
Cheniere Energy, Inc. is gearing up to share its second-quarter results on August 7. This release is highly anticipated, given the Zacks Consensus Estimate standing at $2.30 per share, with projected revenues of approximately $4.1 billion. In this article, we will explore elements likely influencing the performance of this liquefied natural gas (LNG) giant in the upcoming quarter while revisiting its previous quarterly results.
Recap of Q1 Performance and Trends
In the preceding quarter, Cheniere Energy, based in Houston, Texas, fell short of market expectations primarily due to rising operational costs. The company reported adjusted earnings of $1.57 per share, significantly below the Zacks Consensus Estimate of $2.81. However, it did surpass revenue expectations with $5.4 billion, compared to the forecast of $4.4 billion. Over the past four quarters, the company has beat earnings expectations three times, resulting in an impressive average surprise of 65.2%.
Earnings Growth and Surprises
The performance graph illustrates the price and earnings surprises for Cheniere Energy, underscoring a generally favorable trend in earnings.
Earnings Estimate Trends
The Zacks Consensus Estimate for the upcoming quarter has seen a downward revision of 4.2% over the past week, indicating a projected year-over-year decrease of 40.1% in earnings. Conversely, revenue estimates reflect a promising 27% increase compared to last year.
What to Anticipate from Cheniere’s Q2 Results
Looking ahead, Cheniere Energy identifies 2025 and 2026 as pivotal years for expanding LNG supply. After experiencing stagnation in recent years, gas supply to U.S. LNG facilities is beginning to pick up momentum. The current average for feed gas exports is around 16 billion cubic feet per day and is expected to rise further with new liquefaction projects coming online. By 2029, estimates suggest that U.S. projects will add over 80 million tons of new liquefaction capacity to the global market, providing a much-needed boost for Cheniere Energy.
During the second quarter, Cheniere made significant strides by reaching a final investment decision on Corpus Christi Midscale Trains 8 & 9. A full construction announcement to Bechtel has also been made, with these trains projected to add 3 million tons per annum of LNG capacity. With additional capacity from debottlenecking and the Stage 3 project, total Corpus Christi LNG capacity is anticipated to exceed 30 million tons per annum later this decade, contributing positively to the company’s revenue.
That said, geopolitical and trade challenges, alongside fluctuating prices, could pose risks to both revenue and earnings moving forward. Additionally, the rise in operational costs for Cheniere Energy is likely to impact its profitability. Total costs and expenses surged 44.7% from the previous year during the last quarter, and this trend of rising costs is expected to continue.
Predictive Models for Cheniere Energy’s Earnings
According to the established Zacks model, it does not currently forecast an earnings beat for this quarter. A favorable combo of Earnings ESP and a Zacks Rank of either #1 (Strong Buy), #2 (Buy), or #3 (Hold) typically increases the likelihood of exceeding earnings expectations. Unfortunately, Cheniere does not fit this criterion at present.
Earnings ESP Metrics
The Earnings ESP, which calculates the difference between the Most Accurate Estimate and the Zacks Consensus Estimate for Cheniere Energy is currently at -1.45%.
Current Ranking
Cheniere Energy holds a Zacks Rank of 3 at this time, indicating a neutral outlook.
Alternative Stocks with Favorable Earnings Forecasts
Several other companies within the energy sector present positive combinations of factors that could lead to earnings surprises this reporting season.
Calumet, Inc. (CLMT) boasts an Earnings ESP of +49.62% and a Zacks Rank of 3. Set to release earnings on August 8, the Consensus Estimate for Calumet’s current quarter indicates a year-over-year growth of 8.33%. With a market valuation of around $1.3 billion, Calumet’s stock has appreciated by 35.2% over the past year.
Plains GP Holdings, L.P. (PAGP) showcases an Earnings ESP of +50.00% and is currently ranked #1 by Zacks. This company’s earnings release is also scheduled for August 8, and the Consensus Estimate for its 2025 earnings per share predicts significant year-over-year growth of approximately 205.8%. Plains GP is valued at around $3.8 billion and has seen its shares rise by 7.3% over the past year.
- HighPeak Energy, Inc. (HPK) has an Earnings ESP of +58.33% and holds a Zacks Rank of 2. Scheduled for earnings on August 11, the company projects a year-over-year earnings growth of 2.99%, with shares valued at around $1.1 billion despite a 36.3% decline over the past year.
The Future of the Semiconductor Industry
In a different sector, a lesser-known company specializing in semiconductor products is catching the attention of investors. Notably, this firm provides components that major players like NVIDIA do not produce and is perfectly placed to capitalize on the next wave of growth in this market segment.
With robust earnings growth and a burgeoning customer base, this company is poised to meet the escalating demand for technologies such as artificial intelligence, machine learning, and the Internet of Things. Projections indicate that the global semiconductor manufacturing industry will skyrocket from $452 billion in 2021 to an estimated $971 billion by 2028.
Additional Stock Recommendations
If you’re keen on discovering the latest investment opportunities, consider examining Zacks’ top stock recommendations for the upcoming weeks.
- Cheniere Energy, Inc. (LNG)
- Calumet, Inc. (CLMT)
- Plains Group Holdings, L.P. (PAGP)
- HighPeak Energy, Inc. (HPK)
Disclaimer
The insights and opinions mentioned are those of the author and do not necessarily represent the views of any affiliated platforms. Always conduct your own research before making financial decisions.
