Shares of FLEX LNG ORD (FLNG) plummeted 5.04% in pre-market trading on Wednesday, following the release of the company's disappointing first-quarter 2025 financial results and amid ongoing challenges in the LNG shipping market.

FLEX LNG reported Q1 adjusted earnings of $0.54 per diluted share, a significant decrease from $0.70 in the same period last year. The company's vessel operating revenue also declined to $88.4 million, down from $90.2 million a year earlier. Despite the weaker performance, FLEX LNG maintained its quarterly dividend at $0.75 per share.

The sharp stock decline can be attributed to several factors affecting the LNG shipping industry. FLEX LNG is currently facing headwinds from softer spot market rates and seasonal market conditions, which have negatively impacted its revenues. The company has two vessels exposed to the volatile spot market, with rates reportedly hovering in the single digits to low double digits per day. This exposure, coupled with the overall market softness, has raised concerns among investors about the company's near-term profitability.

During the earnings call, management maintained a cautious outlook for the near-term LNG market while emphasizing the company's strong contract backlog and "fortress balance sheet." However, the market's reaction suggests that investors are more focused on the immediate challenges rather than the long-term potential of the LNG shipping sector.

As FLEX LNG navigates through this challenging period, investors will be closely watching how the company manages its spot market exposure and capitalizes on potential long-term contract opportunities in the coming quarters.