New Fortress 4Q21 schedule plus Golar & other updates ?4

09:12 20-Jan-22

New Fortress Energy has scheduled its fourth quarter report for the morning of March 1st.  The average of estimates from 8 analysts comes to 78 cents of EPS, but those vary widely.  Only 4 analysts have revenue estimates, which are more tightly grouped, and average out to $446M, increasing to $465M this quarter.  I expect the hydrogen project to be on hold with Build Back Better delays and a rising rate environment.  I will be looking for updates on Brazilian progress in particular.  The pandemic and deforestation issues in the country haven't improved from what I can see, but I think we can expect business as usual when it comes to keeping the lights on.  Mostly New Fortress just needs to show that it made good on the 4Q21 spike in gas prices and is catching up with expectations on cash flow.  Given the geopolitical situation, I see massive upside potential if it can do that.

We also have an update on Golar's shipping IPO this morning, specifying an initial market capitalization of $375M of which Golar will retain $125M.  That leaves only about $100M to be sold.  CoolCo will immediately list on the Oslo OTC exchange.  It expects to list on EuroNext Growth in February, and on an internationally recognized stock exchange this year.

The total valuation of the IPO represents a little under 10% of Golar's net Property, Plant & Equipment line on the balance sheet, and 20% of the total debt on the vessels.  So, this isn't a game changer on its own.  The IPO valuation may not be so impressive, but this should roughly triple Golar's unrestricted cash to $370M, or over $3 per share, with Golar retaining a third of the equity.  I see this as a necessary step toward Golar moving forward with other transactions, and readers should note that I have updated the summary in the Golar section to reflect the changes so far.

I'll briefly note that eMagin has pre-announced 4Q21 revenue of $7.1+/-0.1M, which is well short of the $8M that was expected by the 1 analyst still covering the company, and an almost 10% YoY decline.  It's still possible that the company's products will catch a metaverse wave, but I was clearly right to be skeptical of the immediate prospects.  EMAN is down over 3% in an otherwise positive pre-market so far, and I would not be surprised to see them in danger of violating the minimum $1 price floor.

Finally, I will document Lumen's contract with the USDA, which is helping LUMN shares in the pre-market.  As with other GSA contracts, the $1.2b headline figure sounds large, but it is spread out over 11 years with 10 1-year extension options.  That means this one is only worth a little over $109M per year.  Still, it can be a good IoT-edge proof point for future corporate sales.