Cheniere Energy misses core profit estimates on lower LNG margins
Cheniere Energy missed 2Q core profit estimates on Thursday, as weaker margins hurt the liquefied natural gas (LNG) producer.
Lower natural gas prices, which are down about 16% this year due to higher global inventories and lower demand forecasts, hurt the company's LNG delivery margins.
LNG revenue fell to $3.04 B in the quarter ended June 30 from $3.92 B a year earlier, and Cheniere's adjusted core profit of $1.32 B missed an LSEG estimate of $1.35 B.
Cheniere's marginally raised full-year core profit forecast of $5.7 B to $6.1 B, up from $5.5 B to $6 B previously, also came below analysts' expectations of $6.01 B at midpoint, according to LSEG data.
The company, however, said it had a more constructive outlook for the remainder of the year, betting on higher demand from Asia.
"Cheniere continues to execute on its capital return strategy through its share repurchase and previously announced dividend. LNG should perform in line with the broader group on generally inline quarterly results and full year expectations," RBC Capital Market analyst Elvira Scotto said.
The company also added that its Corpus Christi Stage 3 project, an export facility in South Texas, was progressing ahead of schedule, and was 62.4% complete as of June 30.
The project is expected to add 10 metric MMtpy of LNG to Cheniere's existing production capacity of 15 MMtpy.
It had said in June it will not know until September when it can start producing at the export facility, citing labor shortages particularly among skilled construction workers.
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