Natgas Producers Rise On Output Decline, Strong Demand Forecast

Shares of Ormat Technologies Inc. ORA rose 1.5% to $83.13 on Nov. 8, 2024, following the company’s third-quarter 2024 results.

Ormat reported third-quarter 2024 adjusted earnings per share of 42 cents, which beat the Zacks Consensus Estimate of 30 cents by 40%. However, the bottom line declined 10.6% from 47 cents in the year-ago quarter.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The company reported GAAP earnings of 36 cents per share compared with 59 cents in the year-ago quarter.

The year-over-year deterioration can be attributed to the absence of tax income that the company registered in the third quarter of 2023 due to changes in Kenya’s tax laws.

Ormat Technologies, Inc. Price, Consensus and EPS Surprise

Ormat Technologies, Inc. price-consensus-eps-surprise-chart | Ormat Technologies, Inc. Quote

ORA’s Total Revenues

ORA generated revenues of $211.8 million, almost in line with the Zacks Consensus Estimate. The top line rose 1.8% year over year, driven by higher revenues from its electricity segment.

ORA’s Segmental Performance

Electricity: Revenues in this segment amounted to $164.6 million, up 4.7% year over year. This upside was primarily driven by revenue contributions from ORA’s acquired Enel assets and higher generation and pricing at Puna.

Product: This segment’s revenues declined 6.2% to $37.4 million from the year-ago quarter’s level. The decline was due to the timing of revenue recognition during the third quarter.

Energy: Revenues in this division amounted to $9.8 million, down 11.1% from the prior-year quarter’s figure. This was driven by the absence of higher energy rates realized in ERCOT during the previous year due to an inclement weather event.

ORA’s Operational Update

Ormat’s total operating expenses were $23.2 million, which increased 3.3% from the year-ago quarter’s level.

The operating income declined 5% year over year to $35.7 million.

The total cost of revenues was $152.9 million, up 3.3% year over year.

Net interest expenses were $34.8 million, up 39% year over year.

Ormat’s Financial Condition

ORA had cash and cash equivalents of $88.1 million as of Sept. 30, 2024 compared with $195.8 million as of Dec. 31, 2023.

ORA’s 2024 Guidance

The company updated its guidance for 2024. It now expects to generate revenues in the range of $875-$893 million, narrower than the prior guidance range of $875-$910 million. The Zacks Consensus Estimate for revenues is pegged at $889.2 million, higher than the midpoint of the newly guided range.

Revenues for the Electricity segment are now anticipated in the band of $710-$715 million compared with the prior expectation in the range of $710-$720 million. Product segment revenues are now expected to be in the range of $130-$138 million compared with the earlier projection in the band of $130-$145 million. ORA now expects revenues from the Energy Storage segment between $35 million and $40 million compared with the earlier projection of $35-$45 million.

The annual adjusted EBITDA is projected to be in the band of $540-$555 million, up from the prior guidance in the range of $520-$550 million.

ORA’s Zacks Rank

Ormat currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Sector Releases

CNX Resources Corporation CNX reported third-quarter 2024 operating earnings of 41 cents per share, which beat the Zacks Consensus Estimate of 32 cents by 28.1%. The bottom line also increased 17.1% from 35 cents in the year-ago quarter.

The company reported revenues of $354 million, which missed the Zacks Consensus Estimate of $398 million by 11.1%. The top line also decreased 0.8% from the prior-year quarter’s $357 million.

ONEOK Inc. OKE reported third-quarter 2024 operating earnings per share of $1.18, which missed the Zacks Consensus Estimate of $1.23 by 4.1%. However, the bottom line improved 19.2% from the year-ago figure of 99 cents.

Operating revenues totaled $5.02 billion, which missed the Zacks Consensus Estimate of $5.81 billion by 13.5%. However, the top line improved 19.8% from $4.19 billion in the prior-year quarter.

TotalEnergies SE TTE reported third-quarter 2024 operating earnings of $1.74 (€1.58) per share, which missed the Zacks Consensus Estimate of $1.84 by 5.4%. The bottom line declined 33.8% from the year-ago figure of $2.63 (€2.41).

Total revenues for the third quarter were $47.43 billion, which lagged the year-ago reported revenues of $54.41 billion by 12.8%.

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Plains All American Pipeline, L.P. PAA reported third-quarter 2024 adjusted earnings of 37 cents per unit, which surpassed the Zacks Consensus Estimate of 31 cents by 19.4%. The bottom line also improved 5.7% from 35 cents in the year-ago quarter.

The company reported GAAP earnings of 22 cents per unit compared with 20 cents in the year-ago period.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

PAA’s Total Revenues

Net sales of $12.74 billion beat the Zacks Consensus Estimate of $12.56 billion by 1.4%. The top line also increased 5.6% from the year-ago quarter’s figure of $12.07 billion.

Plains All American Pipeline, L.P. Price, Consensus and EPS Surprise

Plains All American Pipeline, L.P. price-consensus-eps-surprise-chart | Plains All American Pipeline, L.P. Quote

Highlights of PAA’s Release

Total costs and expenses amounted to $12.4 billion, up 4.7% year over year. The increase was due to a rise in purchases and related costs.

Net interest expenses totaled $113 million, up 16.5% from the prior-year quarter’s level.

PAA’s Segmental Performance

The Crude Oil segment’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $577 million, up 4% from the year-ago quarter’s figure. This increase was due to higher tariff volumes on its pipelines, tariff escalations and contributions from acquisitions.

Adjusted EBITDA for the NGL segment came in at $73 million, down 26% from the prior-year period’s figure. This decrease was due to lower weighted average frac spreads in the third quarter of 2024.

PAA’s Financial Update

As of Sept. 30, 2024, cash and cash equivalents were $640 million compared with $450 million as of Dec. 31, 2023.

As of Sept. 30, 2024, long-term debt was $7.21 billion compared with $7.31 billion as of Dec. 31, 2023.

As of Sept. 30, 2024, long-term debt-to-total book capitalization was 41%, which remained unchanged from the figure recorded as of Dec. 31, 2023.

PAA’s Guidance

For 2024, Plains All American expects adjusted EBITDA in the range of $2.725-$2.775 billion. Adjusted free cash flow is anticipated to be $1.45 billion (excluding changes in assets and liabilities).

PAA remains focused on disciplined capital investments, anticipating full-year 2024 investment and maintenance capital of $360 million and $250 million, respectively.

PAA’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

CNX Resources Corporation CNX reported third-quarter 2024 operating earnings of 41 cents per share, which beat the Zacks Consensus Estimate of 32 cents by 28.1%. The bottom line also increased 17.1% from 35 cents in the year-ago quarter.

The company reported revenues of $354 million, which missed the Zacks Consensus Estimate of $398 million by 11.1%. The top line also decreased 0.8% from the prior-year quarter’s $357 million.

ONEOK Inc. OKE reported third-quarter 2024 operating earnings per share of $1.18, which missed the Zacks Consensus Estimate of $1.23 by 4.1%. However, the bottom line improved 19.2% from the year-ago figure of 99 cents.

Operating revenues totaled $5.02 billion, which missed the Zacks Consensus Estimate of $5.81 billion by 13.5%. However, the top line improved 19.8% from $4.19 billion in the prior-year quarter.

TotalEnergies SE TTE reported third-quarter 2024 operating earnings of $1.74 (€1.58) per share, which missed the Zacks Consensus Estimate of $1.84 by 5.4%. The bottom line declined 33.8% from the year-ago figure of $2.63 (€2.41).

Total revenues for the third quarter were $47.43 billion, which lagged the year-ago reported revenues of $54.41 billion by 12.8%.

Zacks Investment Research

Global natural gas demand (NGZ24) is bouncing back, with a 2.5% rise expected this year and similar growth next year, driven by booming Asian markets and Europe’s industrial recovery. The U.S. is playing a pivotal role, positioning natural gas as a key “bridge fuel” as alternative energy sources scale up. This shift in market dynamics opens up enticing opportunities for dividend-seeking investors, and Cheniere Energy, Inc. is set to capitalize.

Last week, Cheniere reported its Q3 earnings, surpassing Wall Street’s bottom-line projections significantly. More importantly, the company raised its full-year core profit and cash flow forecasts. With analysts bullish on its prospects, Cheniere is emerging as a standout in the energy sector, combining growth potential with solid dividends. Let’s dive deeper.

About Cheniere Energy Stock

Valued at $44.4 billion, Houston-based Cheniere Energy, Inc. is the top domestic liquefied natural gas (LNG) producer. As the world’s second-largest LNG operator, it fuels global markets with liquefied natural gas from its Sabine Pass and Corpus Christi facilities.

With ongoing expansion projects boosting production, Cheniere secures long-term contracts, ensuring stable revenue and a solid foothold in the energy game. In a volatile energy market, its strategic growth and reliable sales make Cheniere a force to reckon with in LNG.

LNG stock has gained 19.6% over the past 52 weeks, rallying 29.2% over the past six months. In fact, in today's trading session, the oil and gas giant hit a new all-time high of $202.77, marking a standout moment in its impressive run.

On Oct. 29, Cheniere bumped up its dividend by 15% to $0.50 per share. This brings its forward annualized dividend to $2.00 per share, yielding a steady 1.06%. Plus, with a low payout ratio of 11%, Cheniere shows a strong commitment to shareholders, blending value and growth in one solid package.

The company’s shareholder-friendly moves do not stop at dividends. In Q3, Cheniere repurchased around 1.6 million shares for roughly $282 million, showcasing its commitment to increasing shareholder value. For investors eyeing both stability and returns, this natural gas exporter offers a rare mix of underappreciated value and steady income.

Cheniere Climbs After Q3 Earnings Beat

On Oct. 31, the natural gas exporter delivered an impressive Q3 earnings beat, sending its stock up 5.2%. Revenue hit $3.8 billion, but it was the earnings per share (EPS) of $3.93 - beating Wall Street’s estimates by a staggering 119.6% - that stole the spotlight. This performance reflects Cheniere's effective cost management in the face of fluctuating prices and regulatory shifts.

Higher spot LNG prices in Asia and a rise in exports fueled Cheniere’s growth, with the company exporting 158 LNG cargoes - a 4% increase over last year. However, adjusted EBITDA dipped to $1.5 billion from $1.7 billion, partly due to competitive LNG markets and spot price pressures.

Cheniere’s financial strength is rock-solid, with $10.7 billion in credit facilities and nearly $3.1 billion in cash reserves. Long-term contracts covering 95% of production help to shield it from commodity price volatility, while $820 million in quarterly distributable cash flow (DCF) supports dividend payouts. Stability and resilience add to Cheniere’s appeal in a turbulent energy market.

Moreover, to meet rising global demand, Cheniere is ramping up its production capacity. The Corpus Christi Stage 3 expansion will add over 10 million tons per annum (mtpa), boosting total production to 45 mtpa. By next year, three new trains will be operational, adding 3 million metric tons of LNG to the spot market - a timely addition that will also help fund the expansion.

Separately, Cheniere reports "good progress" on its proposed 20 mtpa expansion at Sabine Pass, Louisiana.

The company also raised its full-year guidance, underscoring its resilience. It now forecasts adjusted EBITDA between $6 billion and $6.3 billion, while DCF expectations were increased to a range of $3.4 billion to $3.7 billion. With strategic expansions and stable financial health, Cheniere is positioning itself to thrive in a dynamic LNG market.

Analysts tracking Cheniere predict its fiscal 2024 EPS to reach $10.56 and surge 2.7% year over year to $10.84 in fiscal 2025.

What Do Analysts Expect for Cheniere Stock?

TD Cowen just lifted its price target on Cheniere Energy from $192 to $202, and reaffirmed its “Buy” rating, citing the company’s upwardly revised DCF cash flow forecast and aggressive share buybacks as key factors behind the upward revision. Going forward, analyst Jason Gabelman sees potential for LNG to deploy cash toward additional buybacks, debt reduction, and Stage 3 funding.

LNG stock has a consensus “Strong Buy” rating overall. Among the 19 analysts in coverage, 16 suggest a “Strong Buy,” two advise a “Moderate Buy,” and one recommends a “Hold.”

The mean price target for LNG is $212.37, indicating an upside potential of 5% from Wednesday’s close. The Street-high target price of $255 implies the stock could rally as much as 26.2%.

On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

Murphy Oil Corporation MUR delivered third-quarter 2024 adjusted net earnings of 74 cents per share, lagging the Zacks Consensus Estimate of 76 cents by 2.6%. The bottom line decreased 53.4% from the year-ago quarter’s $1.59.

GAAP earnings were 93 cents per share compared with $1.63 in the year-ago quarter. The difference between GAAP and operating earnings was due to discontinued operations and other items affecting comparability between periods.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Revenues of Murphy Oil

Murphy Oil’s revenues were $758.3 million, which marginally surpassed the Zacks Consensus Estimate of $757 million by 0.2%.

The top line declined nearly 30% from the prior-year quarter’s $959.7 million. This year-over-year decline was due to lower contribution from the Gulf of Mexico, mostly driven by downtime at the Samurai field, as well as hurricane-related downtime. Contribution from Eagle Ford Shale decreased due to the natural decline of wells and fewer wells brought online. Lower commodity pricing across all products also contributed to the lower revenues during the period.

Murphy Oil Corporation Price, Consensus and EPS Surprise

Murphy Oil Corporation price-consensus-eps-surprise-chart | Murphy Oil Corporation Quote

Murphy Oil’s Operational Highlights

Murphy Oil produced 184,567 barrels of oil equivalent per day (BOE/D) in third-quarter 2024 (excluding non-controlling interest in GOM) compare with 201,705 BOE/D in third-quarter 2023. Out of the total third-quarter 2024 production, 47.6% was oil. MUR’s third-quarter production was near the middle of the expected production volume of 181,500-1,89,500 BOE/D.

Total costs and expenses were $579.3 million, down 0.5% from $582.1 million a year ago.

The company incurred net interest charges of $21.3 million, down nearly 28.8% from $29.8 million in the prior-year quarter.

MUR reduced debt worth $500 million in 2023 and is on track to further reduce its outstanding debt by $300 million in 2024. The company is working to achieve its long-term debt reduction target of $1 billion.

Murphy Oil continues to buyback shares and increase the value of its shareholders. In the third quarter, it repurchased $194 million of stock or 5.4 million shares at an average price of $36.12 per share. The company currently has $650 million remaining under its share repurchase authorization.

Financial Condition of Murphy Oil

The company had cash and cash equivalents of $271.2 million as of Sept. 30, 2024, compared with $317.1 million as of Dec. 31, 2023. It had $1.1 billion of liquidity as of Sept. 30, 2024.

Long-term debt totaled $1.27 billion as of Sept. 30, 2024, compared with $1.32 billion as of Dec. 31, 2023.

Net cash provided by continuing operational activities in the first-nine months of 2024 was $1.29 billion compared with $1.2 billion in the same period of 2023.

MUR’s Q4 and 2024 Guidance

MUR expects its fourth-quarter 2024 production, excluding NCI, in the range of 181,500-189,500 BOE/D, out of which 51% is expected to be oil.

The company reiterated 2024 capital expenditures in the band of $920-$1,020 million.

MUR revised its 2024 production in the range of 180,000-182,000 BOE/D from the earlier guidance of 180,000-188,000 BOE/D, out of which 50% is expected to be oil.

Zacks Rank of Murphy Oil

Murphy Oil currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Releases

Devon Energy Corp. DVN reported third-quarter 2024 earnings per share (EPS) of $2.51, outpacing the Zacks Consensus Estimate of $2.47 by 1.6%.

The Zacks Consensus Estimate for DVN’s 2024 earnings is pegged at $4.93 per share, implying a decline of 7.9% in the past 60 days. The stock delivered an average earnings surprise of 4.99% in the trailing four quarters.

CNX Resources Corporation CNX reported third-quarter 2024 operating earnings of 41 cents per share, which beat the Zacks Consensus Estimate of 32 cents by 28.1%. The bottom line also increased 17.1% from 35 cents in the year-ago quarter.

CNX’s long-term earnings growth rate is currently pinned at 15.31%. The Zacks Consensus Estimate for 2024 EPS is pegged at $1.56, indicating a year-over-year decline of 17.89%.

Halliburton HAL posted quarterly earnings of 73 cents per share, missing the Zacks Consensus Estimate of 75 cents per share. The figure compares with earnings of 79 cents per share a year ago.

HAL’s long-term earnings growth rate is currently pinned at 4.87%. The Zacks Consensus Estimate for 2024 EPS is pegged at $3.12, indicating a year-over-year decline of 0.32%.

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