Houston, Texas-based Cheniere Energy Inc. (LNG, Financial) on Friday announced a dismal performance for quarter four ended Dec. 31, 2014. The company reported a loss of $158.6 Million for the quarter. Despite an expected negative performance, the results announced by Cheniere were much lower than the street estimations.
Quarter four performance numbers
Cheniere reported quarter revenues to the tune of $66 million, 0.6% lower year on year and significantly lower than the market expectations. The loss figure for the quarter translated into a loss of 70 cents per share. Losses, adjusted for non-recurring cost was 50 cents per share. Most analysts had estimated the loss to be 29 cents which is less than half of the actual loss per share reported by the company. The company had reported somewhat similar figures for quarter three of 2013. At that time the figure stood at $135.2 million translating to 61 cents per share. Cheniere reported general and administrative expenses towards non-cash compensation expense of $16.3 million for the fourth quarter.
The company has attributed the loss in the quarter to development expenses primarily for the liquefaction facility being developed by it near Corpus Christi, Texas. The company also stated that an early debt write-off by Sabine Pass Liquefaction LLC related to the refinancing of a portion of its credit facilities and long term LIBOR changes also negatively impacted the quarter four results.
Annual performance numbers
The annual revenues stood at $268 million. The annual loss figure was in stark contrast and proportionately four times higher of the losses for the quarter at $547.9 million which translated in a loss of $2.44 per share. The annual figures for the previous year stood at $507.9 million translating in a loss of $2.32 per share. Cheniere reported general and administrative expenses towards non-cash compensation expense of $96.7 million for the year.
About the stock
The stock was trading below $50 mark a year back, gradually rising over the months and missing $85 mark by merely have a dollar in September last year. After that the price has more or less been fluctuating in and around $70 range.
About the company
Cheniere Energy Inc. is a Houston-based energy company engaging primarily in liquid natural gas-related business. Nine liquefaction trains are in the pipeline with aggregate design production capacity of 40.5 mtpa or approximately 5.5 Bcf/d.
Competition
Teekay LNG Partners L.P. (TGP, Financial) and William Partners L.P. (WPZ, Financial) are the direct competition to Cheneire Energy in terms of Liquid Natural Gas segment production in US. The companies based and listed out of USA in direct competition for international market share are Liquefied Natural Gas (LNGLF, Financial), listed on the Australian Stock Exchange (ASX) and Petronet LNG (PQRTY, Financial), listed on the National Stock Exchange of India (NSE), which are churning out better numbers for their investors.
Summary
The stock has been performing badly in the past and expected to continue performing on the same lines till 2017 when it may start making profits. Paradoxically, the shares of the company have increased 6.5% since the beginning of the year and the stock has risen 55% in last 12 months. The market has been speaking in loud as well as subdued voice since long, giving out signs about the weak fundamentals of the stock which do not support the valuation and high price. Even at the current reduced levels of $74, the stock still is a costly affair for investors. It is a strong "Sell" advisory for investors, unless the intention is to stay invested beyond 2017-2018.
