Could Cheniere Energy Report Positive Earnings in 3Q16?



Cheniere Energy’s 3Q16 revenue estimates

Cheniere Energy (LNG) and its MLP subsidiaries, Cheniere Energy Partners (CQP) and Cheniere Energy Partners Holdings (CQH), are scheduled to release their 3Q16 earnings results on November 3, 2016. Earlier this month, Cheniere Energy proposed the acquisition of the remaining stake in Cheniere Energy Partners Holdings, to simplify its organizational structure. For more details, read Cheniere Energy’s Plan to Simplify Its Organizational Structure.

In this series, we’ll discuss LNG’s 3Q estimates, key performance indicators, and analyst recommendations. Let’s start with analysts’ earnings estimates.

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Wall Street analysts’ 3Q16 revenue estimate for Cheniere Energy is $139.7 million. Cheniere Energy’s 3Q16 estimate is 253.2% higher than its 3Q15 revenue and 32.0% higher than the previous quarter’s revenue. The YoY (year-over-year) jump in Cheniere Energy’s 3Q16 revenue is expected to be driven by the commencement of LNG (liquefied natural gas) export from Train 1 at Sabine Pass and the commissioning of Train 2. The company had exported 20 cargoes as of July 2016.

Cheniere Energy’s 3Q16 earnings

Wall Street analysts expect Cheniere Energy’s EBITDA (earnings before interest, tax, depreciation, and amortization) to finally turn positive in 3Q16, after a long time in negative territory. The company reported adjusted EBITDA of -$4 million in 2Q16. Its 3Q16 EBITDA are expected to be driven by the commissioning of Train 2, higher LNG uplift volumes at Train 1, and lower G&A (general and administrative) expenses.

Cheniere Energy is expected to build seven train platforms, with five at Sabine Pass and two at Corpus Christi. LNG announced the substantial completion of Train 2 in September 2016.


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