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Cheniere Energy fell short of its second-quarter 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 billion in the quarter ended June 30 from $3.92 billion a year earlier, and Cheniere's adjusted core profit of $1.32 billion missed an average analyst estimate of $1.35 billion as compiled by LSEG.
Cheniere's marginally raised full-year core profit forecast of between $5.7 billion and $6.1 billion, up from $5.5 billion to $6 billion previously, also came below analysts' expectations of $6.01 billion 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 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.
First gas into Train 1 of Corpus Christi's Stage 3 project is expected in the next couple of months, with first LNG still projected by the end of the year, and LNG from the three Trains in 2025, said Cheniere President Jack Fusco on an earnings call.
Cheniere was able to do its major maintenance turn-around work on both its Sabine Pass and Corpus Christi plants without any major outage, which will help make up for lost LNG supplies experienced during the freeze in early 2024, said Fusco.
The project is expected to add 10 million metric tons per annum (mtpa) of LNG to Cheniere's production capacity of 15 mtpa at the Corpus Christi export facility.
Financial firm Tudor Pickering Holt said the results were positive even though Cheniere suffered from reduced core profits due to lower margins.
"We view the print as a positive with projects progressing and feed gas expected at Stage Three, combined with their guidance increase," TPH said in a morning note to clients.
Cheniere's business and products are bi-partisan, since it promotes energy independence, benefits international trade, and LNG transcends any election cycle, said Fusco, who said Cheniere expects to maintain its Washington relationships regardless of who wins the U.S. presidential election.
(Reporting by Tanay Dhumal in Bengaluru and Curtis Williams in Houston; Editing by Jonathan Oatis and David Holmes)