Golar LNG (GLNG) reports second-quarter loss, misses revenue estimates

Golar LNG (GLNG) reported quarterly loss of $0.62 per share versus the Zacks Consensus Estimate of a loss of $0.34. This compares to a loss of $0.38 per share a year ago. These figures are adjusted for one-time items.

This quarterly report represents an earnings surprise of -82.35%. A quarter ago, it was expected that this operator of natural gas vessels would post a loss of $0.26 per share when it actually produced a loss of $0.37, representing a surprise of -42.31%.

Over the last four quarters, the company has beaten consensus earnings per share estimates only once.

Golar LNG, which belongs to the Zacks Transportation – Shipping industry, posted revenues of $82.32 million for the quarter ended June 2019, missing the Zacks Consensus Estimate by 3.27%. This compares to year-ago revenues of $59.37 million. The company has surpassed the consensus revenue estimate three times over the last four quarters.

The sustainability of current share price movements based on recently released data and future earnings expectations will depend primarily on management’s commentary following the earnings conference call.

Year to date, Golar LNG shares have lost about 38.3%, while the S&P 500 has gained 15.2%.

What’s next for Golar LNG?

Even though Golar LNG has underperformed the market this year, investors are wondering: what’s next for this stock?

There are no easy answers to this key question, but one reliable indicator that can help investors address this is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings report, the estimate revision trend for Golar LNG was mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. As such, the stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the upcoming quarters and current fiscal year change in the coming days. The current consensus EPS estimate is -$0.17 on $111.03 million in revenue for the coming quarter and -$0.63 on $436.29 million in revenue for the current fiscal year.

Investors should be aware that the outlook for the industry can also have a significant impact on stock performance. In terms of the Zacks Industry Rank, Transportation – Shipping currently ranks in the top 42% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

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