Frontline (FRO) to Post Q2 Earnings: What's in the Offing?
Frontline Ltd. FRO is scheduled to release second-quarter 2023 earnings on Aug 24. The Zacks Consensus Estimate for earnings has been revised 13.9% upward to 90 cents per share over the past 60 days.
Against this backdrop, let’s delve into the factors that might have impacted Frontline’s June-quarter performance.
FRO’s performance in the second quarter is expected to have been affected by supply-chain disruptions. High operating expenses due to increased average number of vessels in its fleet and fuel expenses are likely to have hurt the bottom line. Even though fuel price has come down from the highs witnessed earlier, it still remains at an elevated level.
However, high tanker rates are likely to have aided the top-line performance. Moreover, with the resumption of economic activities, world trade gained pace, which should aid second-quarter results of shipping stocks like Frontline. This is because the shipping industry is responsible for transporting several goods involved in world trade.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Frontline 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. However, that is not the case here.
Earnings ESP: Frontline has an Earnings ESP of -12.85% (the Most Accurate Estimate is pegged at 78 cents per share, 12 cents below the Zacks Consensus Estimate). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Frontline carries a Zacks Rank # 3 currently.
Q2 Performance of Some Other Transportation Companies
American Airlines’ AAL second-quarter 2023 earnings (excluding 4 cents from non-recurring items) of $1.92 per share easily beat the Zacks Consensus Estimate of $1.58. AAL’s results were aided by lower costs and higher revenues.
Operating revenues of $14,055 million rose 4.7% year over year. The top line beat the Zacks Consensus Estimate of $13,736.3 million.
Passenger revenues, accounting for 92.3% of the top line, increased to $12,978 million from $12,223 million a year ago. This was driven by strong air-travel demand, mainly on the domestic front.
Demand was particularly strong in June on the back of growth in close-in bookings. AAL currently carries a Zacks Rank #3.
United Airlines UAL reported second-quarter 2023 earnings per share of $5.03, outpacing the Zacks Consensus Estimate of $3.99 and surging more than 100% year over year. UAL currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Operating revenues of $14,178 million outshined the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues climbed 17.1% year over year due to upbeat air-travel demand. The uptick was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.
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