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Will Nordic American Tankers' (NAT) Q2 Earnings Disappoint?

Zacks Equity Research

Nordic American Tankers NAT is scheduled to report second-quarter 2020 results on Aug 17, 2020 before market open.

The Zacks Consensus Estimate for June-quarter earnings has been revised 3.5% downward to 28 cents per share over the past 60 days. Moreover, the company has a mixed earnings history. Its bottom line outperformed estimates in two of the preceding four quarters and missed the mark in the other two, the average miss being 24.4%.

Nordic American Tankers Limited Price and EPS Surprise

Nordic American Tankers Limited Price and EPS Surprise
Nordic American Tankers Limited Price and EPS Surprise

Nordic American Tankers Limited price-eps-surprise | Nordic American Tankers Limited Quote

Against this backdrop, let’s take a look at the factors that are likely to have influenced the company’s second-quarter performance.

Given the prevalence of coronavirus, multiple sailings were already canceled in the quarter. Moreover, vessels were rapidly idled. Consequently, net voyage revenues are likely to have decreased in the to-be-reported quarter.

We also expect the company’s performance to have been hurt by low tanker rates in the April-June period. Notably, oil prices rebounded in the second quarter from the rock-bottom levels of the first quarter of this year. This, in turn, might have weakened the tanker rates.

However, reduced vessel operating expenses owing to coronavirus-induced lower utilization of the fleet is likely to have boosted the bottom line in the to-be-reported quarter.

What Does the Zacks Model Unveil?

Our proven model does not predict an earnings beat for Nordic American Tankers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. However, that is not the case here as shown below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Nordic American Tankers has an Earnings ESP of -5.46% as the Most Accurate Estimate is pegged at 26 cents, which is 2 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:  Nordic American Tankers carries a Zacks Rank #4 (Sell), currently.

Snapshots of Sectorial Releases

Below we present the second-quarter reports of three top-ranked companies in the Zacks Transportation sector.

United Parcel Service’s UPS second-quarter 2020 earnings (excluding 10 cents from non-recurring items) per share of $2.13 surpassed the Zacks Consensus Estimate of $1.04. The bottom line also improved 8.7% year over year. Results were aided by expanded residential delivery volumes amid the continued pandemic situation, which confined people to their homes besides an increase in healthcare shipments and strong outbound demand from Asia.

UPS generated revenues worth $20,459 million in the quarter, outperforming the Zacks Consensus Estimate of $17,344.4 million. Moreover, the top line improved 13.4% on a year-over-year basis. The company sports a Zacks Rank #1, presently.

Canadian Pacific Railway Limited’s CP second-quarter 2020 earnings (excluding 42 cents from non-recurring items) of $2.94 per share surpassed the Zacks Consensus Estimate of $2.75. However, quarterly earnings declined 8.4% year over year.

Quarterly revenues of $1,292.8 million lagged the Zacks Consensus Estimate of $1,299.9 million. The top line also fell 12.5% on a year-over-year basis due to depressed freight revenues. The company presently carries a Zacks Rank #2.

Werner Enterprises WERN delivered second-quarter 2020 earnings per share (excluding 6 cents from non-recurring items) of 62 cents, which surpassed the Zacks Consensus Estimate of 40 cents. However, the bottom line dipped 1.6% year over year. Moreover, total revenues of $569 million missed the Zacks Consensus Estimate of $580.8 million and also dropped 9.3% year over year due to soft fuel surcharge and logistics revenues. The company has a Zacks Rank of 2, currently.

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United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
 
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