After looking at Eagle Bulk Shipping Inc’s (NASDAQ:EGLE) latest earnings announcement (31 December 2017), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. See our latest analysis for Eagle Bulk Shipping
Could EGLE beat the long-term trend and outperform its industry?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to analyze many different companies on a similar basis, using the most relevant data points. For Eagle Bulk Shipping, its most recent earnings (trailing twelve month) is -US$43.80M, which, against the prior year’s level, has become less negative. Given that these figures are relatively myopic, I’ve calculated an annualized five-year figure for EGLE’s net income, which stands at -US$166.38M. This shows that, even though net income is negative, it has become less negative over the years.
We can further assess Eagle Bulk Shipping’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Eagle Bulk Shipping has seen an annual decline in revenue of -12.57%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the US shipping industry has been growing, albeit, at a subdued single-digit rate of 4.43% over the previous twelve months, and a flatter -0.14% over the previous five years. This suggests that while Eagle Bulk Shipping is currently loss-making, any near-term headwind the industry is enduring, Eagle Bulk Shipping is less exposed compared to its peers.
What does this mean?
Eagle Bulk Shipping’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Eagle Bulk Shipping may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Eagle Bulk Shipping to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for EGLE’s future growth? Take a look at our free research report of analyst consensus for EGLE’s outlook.
- Financial Health: Is EGLE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.