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Danaos (DAC) to Report Q4 Earnings: What's in the Offing?

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Danaos Corporation DAC is scheduled to release fourth-quarter 2020 results on Feb 16, before market open.

The company has a stellar surprise record as its earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average being 14%.

Danaos Corporation Price and EPS Surprise

Danaos Corporation Price and EPS Surprise
Danaos Corporation Price and EPS Surprise

Danaos Corporation price-eps-surprise | Danaos Corporation Quote

Moreover, the Zacks Consensus Estimate for fourth-quarter earnings has been revised 2.25% upward over the past 60 days.

Against this backdrop, let’s examine the factors that are likely to have impacted the company’s December-quarter performance.

We expect Danaos’ fourth-quarter bottom-line performance to have been hurt by higher vessel operating expenses, mainly due to the increase in the average number of vessels in its fleet. Moreover, coronavirus-induced supply-chain disruptions are likely to dent this shipping company’s results. Notably, the COVID-19 pandemic spelt doom for the shipping industry, which is responsible for transporting the majority of goods involved in world trade and is rightfully considered the life line of the global economy.

However, the contractual increases in the charter rates of vessels under long-term charters are likely to have boosted the top line in the to-be-reported quarter. Moreover, free cash flow might have been consistently impressive in the December quarter. Free cash flow is likely to have been aided by factors like low interest rates and vessel acquisitions.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Danaos 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 not the case here as shown below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Danaos has an Earnings ESP of 0.00% as the Most Accurate Estimate is in line with the Zacks Consensus Estimate of $2.27. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Danaos sports a Zacks Rank of 1, currently.

Highlights of Q3 Earnings

In the last reported quarter, Danaos’ earnings (excluding 18 cents from non-recurring items) of $1.91 per share surpassed the Zacks Consensus Estimate of $1.86. However, the bottom line declined 22.3% on a year-over-year basis. Quarterly revenues of $118.9 million too surpassed the Zacks Consensus Estimate of $115.4 million.

Stocks to Consider

Investors interested in the Zacks Transportation sector may check out the following stocks, which possess the right combination of elements to beat estimates in the upcoming releases.

Air Lease Corporation AL has an Earnings ESP of +6.11% and a Zacks Rank #3, currently. The company will release fourth-quarter 2020 results on Feb 22.

Forward Air Corporation FWRD has an Earnings ESP of +1.37% and a Zacks Rank #2, currently. The company will release fourth-quarter 2020 results on Feb 11.

Westinghouse Air Brake Technologies Corporation WAB has an Earnings ESP of +5.99% and is Zacks #3 Ranked, currently. The company will release fourth-quarter 2020 results on Feb 18

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