Why Golar LNG Limited's Shares Popped 16% Today
Image source: Getty Images.
What happened
Shares of Golar LNG Limited (NASDAQ: GLNG) jumped as much as 16% today after the company reported earnings from the third quarter. As of 3:20 p.m. EST, shares were still up 12.6% on the day.
So what
Revenue was up 21.2% sequentially to $22.3 million, and operating loss improved from $37.2 million in the second quarter to $28.3 million in the fourth quarter. Management also said that spot-market pricing is improving, and current conditions suggest that first-quarter 2017 utilization and revenue will likely be up versus the third quarter of 2016. This bullish trend has given investors a reason to jump into the stock today.
Management also announced a $0.05-per-share dividend payable to investors of record on Dec. 14, 2016.
It also can't hurt that oil prices jumped over 8% today, making alternatives like liquefied natural gas more attractive to customers. If oil's move higher continues, it could be great news for companies like Golar LNG.
Now what
I'm cautiously optimistic that both the rise in energy prices and the tightening market in LNG shipping will lead to improving financials for Golar LNG. But investors should keep in mind that the company is still losing money, and is expected to lose money through the end of next year. Before buying into the recovery, I want to see more evidence that long-term profits will live up to the expectations that investors are putting on a company with a $2.5 billion market cap.
10 stocks we like better than Golar LNG When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Golar LNG wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 7, 2016
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.