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TheStreet Open House

Why Golar LNG (GLNG) Stock Is Down Today

NEW YORK (TheStreet) -- Golar LNG (GLNG) was falling -3.4% to $58.29 Friday after pricing the secondary offering of common stock by World Shipholding.

The shipping company priced the secondary offering of 27,826,087 shares sold by principal shareholder World Shipholding at $58.50 a share. The underwriters of the offering have a 30-day option to purchase an additional 4,173,913 common shares from the offering.

Golar LNG won't receive any proceeds from the sale of the shares in the offering.

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TheStreet Ratings team rates GOLAR LNG LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate GOLAR LNG LTD (GLNG) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, GLNG's share price has jumped by 59.02%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • GLNG, with its decline in revenue, underperformed when compared the industry average of 3.5%. Since the same quarter one year prior, revenues fell by 24.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for GOLAR LNG LTD is currently lower than what is desirable, coming in at 28.87%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -114.77% is significantly below that of the industry average.
  • GOLAR LNG LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, GOLAR LNG LTD reported lower earnings of $1.58 versus $11.66 in the prior year. For the next year, the market is expecting a contraction of 104.1% in earnings (-$0.07 versus $1.58).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 141.0% when compared to the same quarter one year ago, falling from $58.97 million to -$24.20 million.
  • You can view the full analysis from the report here: GLNG Ratings Report

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