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How Will Capital Product Partners (CPLP) Fare in Q3 Earnings?

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Zacks Equity Research
·4 min read
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Capital Product Partners CPLP is scheduled to report third-quarter 2020 results on Nov 2, before market open.

The company has an unimpressive earnings surprise record as its bottom line missed the Zacks Consensus Estimate in three of the last four quarters and beat the same on a single occasion, the average miss being 12.6%.

Capital Product Partners L.P. Price and EPS Surprise

Capital Product Partners L.P. Price and EPS Surprise
Capital Product Partners L.P. Price and EPS Surprise

Capital Product Partners L.P. price-eps-surprise | Capital Product Partners L.P. Quote

Moreover, the Zacks Consensus Estimate for third-quarter earnings has been revised 8.8% upward over the past 60 days.

Against this backdrop, let’s take a look at the factors that might have shaped the company’s September-quarter performance.

We expect the company’s third-performance to have been buoyed by higher revenues. The top line is likely to have been boosted by the expansion of its fleet size following the acquisition of three 10,000 TEU containers earlier this year.

However, the increase in fleet size might have resulted in higher operating expenses in the to-be-reported quarter, mainly due to the rise in vessel operating costs. This, in turn, might have hurt the bottom line despite low fuel costs.

Moreover, container charter rates are expected to have been hit by soft demand for container capacity. Due to the coronavirus-induced weakness in the container charter market, container asset prices are likely to have been hit by the to-be-reported quarter

Earnings Whispers

Our proven model predicts a bottom-line outperformance for Capital Product Partners this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Capital Product Partners has an Earnings ESP of +4.05% as the Most Accurate Estimate is pegged 2 cents above the Zacks Consensus Estimate of 37 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Capital Product Partners sports a Zacks Rank of 1, currently

Highlights of Q2

In the last reported quarter, the company delivered a negative earnings surprise of 8%. However, earnings per unit improved 4.6% year over year to 46 cents. Revenues too rose 28.6% to $35.3 million.

Another Shipping Stock to Consider

Investors may also check out Genco Shipping & Trading Limited GNK as it possesses the perfect combination of elements to beat estimates this earnings season.

Genco Shipping has an Earnings ESP of +33.33% and a Zacks Rank #3, currently. This company is set to release third-quarter financial numbers on Nov 4

Snapshots of Sectoral Releases

Investors interested in the broader Transportation sector may also want to recapitulate the third-quarter results of a few companies, earnings of which surpassed estimates. Below we present results of two such sectoral players.

Westinghouse Air Brake Technologies Corporation, which operates as Wabtec Corporation WAB, reported third-quarter 2020 earnings (excluding 28 cents from non-recurring items) of 95 cents per share. The bottom line surpassed the Zacks Consensus Estimate of 90 cents. Total sales of $1,865.1 million also surpassed the Zacks Consensus Estimate of $1,829.1 million. The company carries a Zacks Rank #3, currently.

United Parcel Service’s UPS third-quarter 2020 earnings (excluding 4 cents from non-recurring items) per share of $2.28 surpassed the Zacks Consensus Estimate of $1.86. The bottom line also improved 10.1% year over year. UPS, currently carrying a Zacks Rank #2 (Buy), generated revenues worth $21,238 million in the quarter, outpacing the Zacks Consensus Estimate of $20,079.6 million.

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United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
 
Genco Shipping Trading Limited (GNK) : Free Stock Analysis Report
 
Westinghouse Air Brake Technologies Corporation (WAB) : Free Stock Analysis Report
 
Capital Product Partners L.P. (CPLP) : Free Stock Analysis Report
 
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