Liquefied natural gas (LNG) stock New Fortress Energy (NFE -63.57%) imploded in morning trading Thursday after reporting staggering losses and a big asset sale.
Expected to lose $0.05 per share, New Fortress instead reported last night that it lost $0.73 per share in Q1 2025. Shares plunged 62.6% through 10:35 a.m. ET.
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New Fortress's Q1 loss
New Fortress noted, "We have a number of notable one time events such as the FEMA claim, FSRU sub charters, and the Genera incentive payment that we expect will boost remaining earnings through 2025." But for the time being, things look pretty grim. The company has had trouble buying LNG at attractive rates, to fuel its power-generating operations in Latin America, hurting profits badly, and forcing the company to sell off assets to try to remain afloat.
Last night, New Fortress said it has sold its Jamaican LNG import terminal in Montego Bay, offshore floating storage and other assets to Excelerate Energy (EE -0.38%) for a little over $1 billion. The company plans to use the proceeds from this sale to pay down about $325 million in debt.
Is New Fortress Energy stock a sell?
Problem is, New Fortress has a lot more debt where that came from. In total, the company carries $9 billion in debt, net of cash on hand.
Although occasionally profitable as calculated according to generally accepted accounting principles (GAAP), New Fortress has never generated a penny of actual free cash flow, and at last report was burning cash at the rate of $3.2 billion per year. $1 billion in asset sales will hardly make a dent in that, meaning New Fortress will probably go deeper and deeper into debt.
If you still own it, I fear it's probably time to sell.
