Shares of New Fortress Energy (NFE 4.98%) were in free fall this week. The company's stock plummeted 62.7% as of 1:55 p.m. on Friday. The collapse came as the S&P 500 and the Nasdaq Composite both saw major gains.
The liquefied natural gas (LNG) company reported its first-quarter numbers this week, revealing a staggering loss much more significant than Wall Street expected.
New Fortress is deep in the red
New Fortress Energy reported a Q1 2025 loss of $0.73 per share, much worse than analysts had expected and well below last year's Q1 net profit of $0.26 per share.
At the same time, the company announced it sold its Jamaican LNG import terminal in Montego Bay, along with offshore floating storage and other assets, to Excelerate Energy. While the deal nets the company roughly $1 billion, it will significantly impact its cash flow in the future. The move shows the dire situation the heavily indebted company is in. Management indicated it plans to use approximately $325 million of the proceeds to pay down existing debt.
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Bad credit, bad prices
The company's credit rating is not up to par, failing to meet investment grade standards, and that means it is unable to secure long-term contracts for its LNG assets in Latin America. These short-term agreements mean the company is paying a higher price, eating into its margins.
This stock is not one you want to own. There are too many issues facing the company, with no compelling case for a turnaround for the foreseeable future.
