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Cheniere Energy Partners (CQH): Q1 Earnings to Surprise?

Cheniere Energy Partners LP Holdings LLC CQH is expected to report first-quarter 2016 results on May 5.

In the last four quarters, the company delivered an earnings surprise of 0.00%. Let’s see how things are shaping up for this announcement.   



Factors to Consider this Quarter

Cheniere Energy Partners LP Holdings, by virtue of its 55.9% ownership in Cheniere Energy Partners LP CQP, primarily operates the Sabine Pass natural gas regasification and liquefaction facilities. Cheniere Energy Partners LP Holdings also operates Creole Trail Pipeline – located in Louisiana. This solid asset base might help the company to earn sufficiently for its shareholders.   

Moreover, the fate of the midstream player’s business is positively correlated with natural gas production. The output of the commodity in the U.S. has been booming owing to hydraulic fracturing (or "fracking") and sophisticated horizontal drilling techniques. The same is applicable for the first quarter.

Hence, we can say that the business environment was favorable for the company as higher production of natural gas usually increases the need for regasification, liquefaction and transportation activities. Yet, we have to wait for the final earnings release to find out whether this increase in output translates into a positive surprise.

Earnings Whispers

Our proven model does not conclusively show that Cheniere Energy Partners LP Holdings is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.   

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 2 cents, resulting in an Earnings ESP of 0.00%.  

Zacks Rank: Cheniere Energy Partners LP Holdings has a Zacks Rank #4 (Sell).

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when a firm is seeing negative estimate revisions.

Stocks to Consider

Here are some companies that have the right combination of elements to post an earnings beat this quarter:  

NGL Energy Partners LP NGL with an Earnings ESP of +1.96% and a Zacks Rank #2.

Chesapeake Energy Corporation CHK with an Earnings ESP of +9.09% and a Zacks Rank #3.        

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
CHENIERE ENERGY (CQP): Free Stock Analysis Report
 
CHENIERE EP LP (CQH): Free Stock Analysis Report
 
CHESAPEAKE ENGY (CHK): Free Stock Analysis Report
 
NGL ENERGY PART (NGL): Free Stock Analysis Report
 
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