By Avi Salzman

Shares of Venture Global, a major player in the business of exporting liquefied natural gas, fell 25% in early trading after its guidance for adjusted 2025 earnings fell below Wall Street's estimates.

The stock fell even as the company is planning a major expansion at a Louisiana plant that appears to have strong support from the Trump administration. Both Energy Secretary Chris Wright and Secretary of the Interior Doug Burgum were scheduled to speak at the plant later on Thursday.

Investors have been unimpressed with Venture Global's results, a continuing problem for the company. It had initially planned to go public at a market capitalization as high as $110 billion, before reducing its offering price just ahead of its January initial public offering. With Thursday's selloff, the market cap is now closer to $25 billion.

The company posted 33 cents of earnings per share, two cents below the consensus call among Wall Street analysts tracked by FactSet. But the bigger problem likely was management's financial forecasts. Venture Global said it expects to post adjusted earnings of between $6.8 billion and $7.4 billion before interest, taxes, depreciation, and amortization in 2025, well below expectations for $9.3 billion.

Exporting LNG is a profitable and growing business, but is subject to significant volatility. Venture Global's business model is particularly exposed to market fluctuations because it signs fewer long-term contracts than some rivals. Instead, it seeks to make money from the spread between U.S. and foreign natural-gas prices.

A mild winter or other change in overseas demand patterns can cause prices to drop and hurt the company's sales and margins. Venture Global's earnings fell in 2024 even though the company expanded its export capacity. The company cited "a significant decline in international LNG prices."

And so much LNG capacity is starting to come to market around the world that analysts expect an oversupply by 2027. That could further depress margins.

While the Trump administration's strong support for LNG will help the company, investors may take longer to buy in. The latest expansion news is "a positive but not something for which we expect the Company to receive immediate credit ahead of more execution," wrote Citi analyst Spiro Dounis.

Write to Avi Salzman at avi.salzman@barrons.com

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March 06, 2025 11:11 ET (16:11 GMT)

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