U.S. Markets open in 2 hrs 36 mins

Golar LNG (GLNG) Q2 Loss Wider on Shipping Market Weakness

Zacks Equity Research
1 / 2

Weight Watchers (WTW) Jumps: Stock Rises 7.3%

Weight Watchers (WTW) saw a big move last session, as its shares jumped more than 7% on the day, amid huge volumes.

Golar LNG Limited GLNG posted lower-than-expected results in the second quarter of 2018. It incurred wider-than-expected loss (excluding 74 cents from non-recurring items) of 38 cents. The Zacks Consensus Estimate for the same stood at 19 cents. However, the amount of loss narrowed significantly from 51 cents a year ago.

Total operating revenues of $59.4 million also missed the Zacks Consensus Estimate of $63.2 million. However, the top line surged more than 100% year over year. Of the total revenues, Time and voyage charter revenues accounted for the bulk (51.9%), grossing $30.80 million (up 57.5% year over year). While Time charter revenues-collaborative arrangement were $4.87 million (up 10.6%), Vessel and other management fees were $5.13 million (up 15.3%). Meanwhile, Liquefaction services revenues were $18.58 million.

As was expected, seasonal softening of the shipping market caused a reduction of $16,400 in daily TCE (Time Charter Equivalent) earnings to $19,600 during the second quarter from $36,000 in the first. However, with improvement in the shipping market, third-quarter TCE is expected to at least double the second-quarter figure.

Total operating expenses soared 50.3% in the quarter under discussion to $78.73 million. Vessel operating expenses escalated 69.4% year over year to $20.5 million, primarily due to rise in FLNG operating costs with the onset of Hilli Episeyo's operation. Moreover, on commencement, Hilli Episeyo’s value depreciated and thus depreciation and amortization expenses climbed 17.8% year over year to $20.46 million.

Golar LNG Limited Price, Consensus and EPS Surprise

Golar LNG Limited Price, Consensus and EPS Surprise | Golar LNG Limited Quote


At the end of the second quarter, the company had cash and cash equivalents of $375.07 million compared with $214.86 million at December 2017 end. As of Jun 30, 2018, the company’s long-term debt totaled $1.85 billion compared with $1.02 billion as of Dec 31, 2017.

Dividend Hike

The company has raised its dividend payment for the second quarter to 12.5 cents per share (50 cents annually) from the previous 5 cents, courtesy of a sound financial position, lower capital expenses and the initiation of Hilli Episeyo contract.

Q3 Outlook

Third-quarter results are anticipated to get a boost from the operation of Hilli Episeyo and an improving shipping market.

Zacks Rank & Key Picks

Golar LNG has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Transportation sector are GATX Corporation GATX, Trinity Industries, Inc. TRN and SkyWest, Inc SKYW. While GATX carries a Zacks Rank #2 (Buy), Trinity and SkyWest sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .

Shares of GATX, Trinity and SkyWest have gained more than 41%, 26% and 95%, respectively, in a year.

5 Medical Stocks to Buy Now

Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.

New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.

Click here to see the 5 stocks >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SkyWest, Inc. (SKYW) : Free Stock Analysis Report

GATX Corporation (GATX) : Free Stock Analysis Report

Trinity Industries, Inc. (TRN) : Free Stock Analysis Report

Golar LNG Limited (GLNG) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research