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Are Cheniere's (LNG) Q1 Earnings Poised to Beat Expectations?

Zacks Equity Research
·4-min read

Cheniere Energy, Inc. LNG is set to release first-quarter results on May 2. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $5.77 per share on revenues of $6.6 billion.

Let’s delve into the factors that might have influenced the liquefied natural gas exporter’s performance in the March quarter. But it’s worth taking a look at Cheniere Energy’s previous-quarter performance first.

Highlights of Q4 Earnings & Surprise History

In the last reported quarter, this Houston, TX-based transporter of super-chilled fuel crushed the consensus mark on high natural gas prices and increasing demand from customers looking to replace Russian energy. Cheniere Energy had reported adjusted earnings per share of $15.78 that comprehensively beat the Zacks Consensus Estimate of $4.89. The company’s quarterly revenues of $9.1 billion also outperformed the Zacks Consensus Estimate by 4.2%.

Cheniere Energy beat the Zacks Consensus Estimate in each of the last four quarters, ending up with an earnings surprise of 97%, on average. This is depicted in the graph below:

Cheniere Energy, Inc. Price and EPS Surprise

Cheniere Energy, Inc. Price and EPS Surprise
Cheniere Energy, Inc. Price and EPS Surprise

Cheniere Energy, Inc. price-eps-surprise | Cheniere Energy, Inc. Quote

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Trend in Estimate Revision

The Zacks Consensus Estimate for the first-quarter bottom line has been revised 8.3% upward in the past seven days. The estimated figure indicates a 21.5% decline year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 12.1% decrease from the year-ago period.

Factors to Consider

LNG shipments for export from the United States have been robust for months on the back of environmental reasons and high prices of the super-chilled fuel elsewhere. Now, with the Russia-Ukraine conflict showing no signs of abating, LNG has become even more coveted, with an increasing number of countries vying for the American-made fuel to replace supplies from Moscow. This means that LNG deliveries are poised to rise further. This augurs well for Cheniere Energy — the dominant U.S. LNG exporter — in the to-be-reported quarter.

As proof of this bullish backdrop, the Zacks Consensus Estimate for first-quarter LNG volumes loaded is pegged at 600 trillion British thermal units (TBtu), suggesting an increase from the year-ago level of 585 TBtu. This should have aided the company’s revenues and cash flows.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for Cheniere Energy this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

LNG has an Earnings ESP of +11.05% and a Zacks Rank #3.

Other Stocks to Consider

Cheniere Energy is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:

Sunoco LP SUN has an Earnings ESP of +5.66% and a Zacks Rank #1. The firm is scheduled to release earnings on May 2.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for SUN’s 2023 earnings has been revised 1.4% upward over the past 60 days. Valued at around $4.5 billion, Sunoco has gained 8.5% in a year.

Targa Resources TRGP has an Earnings ESP of +2.66% and a Zacks Rank #2. The firm is scheduled to release earnings on May 4.

For 2023, Targa Resources has a projected earnings growth rate of 53.6%. Valued at around $17.1 billion, TRGP has gained 0.7% in a year.

EOG Resources EOG has an Earnings ESP of +0.58% and a Zacks Rank #3. The firm is scheduled to release earnings on May 4.

EOG Resources’ expected EPS growth rate for three to five years is currently 28.6%, which compares favorably with the industry's growth rate of 25.8%  Valued at around $68 billion, EOG has lost 2.3% in a year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Sunoco LP (SUN) : Free Stock Analysis Report

EOG Resources, Inc. (EOG) : Free Stock Analysis Report

Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report

Targa Resources, Inc. (TRGP) : Free Stock Analysis Report

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Zacks Investment Research