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Golar LNG (GLNG) Up 8.2% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Golar LNG (GLNG). Shares have added about 8.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Golar LNG due for a pullback? 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.

Golar LNG Q2 Loss Wider Than Expected

Golar LNG incurred a loss (excluding $4.35 from non-recurring items) of 7 cents per share in the second quarter of 2021, wider than the Zacks Consensus Estimate of a loss of 4 cents. However, the figure was narrower than the year-ago quarter’s loss.

Adjusted revenues of $102.2 million missed the Zacks Consensus Estimate of $103.6 million and fell marginally on a year-over-year basis. Total operating revenues came in at $104.3 million, up 2% year over year owing to better Floating Liquefied Natural Gas (FLNG) performance. Notably, FLNG HilliEpiseyo maintained its 100% commercial uptime in the quarter under review.

Shipping revenues (approximately 40%) and FLNG revenues (approximately 53%) accounted for bulk of the company’s top line. Time and voyage charter revenues dropped nearly 2% year over year to $41.8 million. Liquefaction services revenues came in at $55.7 million compared with $54.5 million in the year-ago quarter. Revenues from Vessel and other management fees increased 31.4% year over year to $6.7 million. Additionally, Time Charter Equivalent earnings were $43,700 per day (on an average, excluding loss of hire revenues receivable) in the quarter under discussion compared with $45,100 in the year-ago quarter. Average daily TCE rate for TFDE fleet (Tri-Fuel Diesel Electric Propulsion Ships) declined to 43,700 from 45,100 in the prior-year quarter.

Vessel operating expenses of $31.4 million moved up 2.3% year over year due to rising freight and logistics costs for supplies.

Total administrative expenses increased 20.2% year over year to $10.1 million. Project-development expenses improved from $1.6 million in the year-ago quarter to income of $0.7 million.

The company exited the second quarter with cash balance of $338.5 million, of which $207.3 million was unrestricted cash. As of Jun 30, 2021, its total debt (current and non-current) was $2.38 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month. The consensus estimate has shifted -214.29% due to these changes.

VGM Scores

At this time, Golar LNG has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

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

Outlook

Golar LNG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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