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Scorpio Tankers (STNG) to Post Q2 Earnings: What's in Store?

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Scorpio Tankers STNG is scheduled to report second-quarter 2020 results on Aug 6, before market open.

The company has a mixed record with respect to earnings per share. Its bottom line beat the Zacks Consensus Estimate in two of the last four quarters and missed the same in the other two.  

Scorpio Tankers Inc. Price and EPS Surprise

Scorpio Tankers Inc. Price and EPS Surprise
Scorpio Tankers Inc. Price and EPS Surprise

Scorpio Tankers Inc. price-eps-surprise | Scorpio Tankers Inc. Quote

Moreover, the Zacks Consensus Estimate for second-quarter earnings has remained stable at $2.37 per share in the past 30 days.

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

The coronavirus-induced demand woes for oil and refined petroleum products are expected to have hurt the company’s performance in the to-be-reported quarter. Given the prevalence of the pandemic, multiple sailings were already canceled in the quarter. Moreover, vessels were rapidly idled. Consequently, voyage revenues are likely to have decreased in the quarter to be reported.

Even though oil prices are persistently low, the same rebounded from the rock bottom levels of the first quarter of the year. Consequently, tanker rates are likely to have declined in the April-June months, thereby denting the company’s performance. However, total operating expenses are expected to have fallen in the June quarter, mainly owing to the dip in vessel operating costs, boosting the bottom line in turn.

What Does the Zacks Model Unveil?

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

Earnings ESP: Scorpio Tankers has an Earnings ESP of 0.00% as the Most Accurate Estimate of $2.37 is in line with 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:  Scorpio Tankers carries a Zacks Rank #4, currently.

Highlights of Q1 Earnings

Scorpio Tankers’ first-quarter earnings of 82 cents per share surpassed the Zacks Consensus Estimate of 50 cents. Moreover, the bottom line improved more than 100% on a year-over-year basis. Further, total revenues of $249.9 million outpaced the Zacks Consensus Estimate of $236 million and also jumped 27.6% year over year.

Stocks to Consider

Investors interested in the broader Transportation sector may check out a few stocks worth considering like Expeditors International of Washington EXPD, Atlas Air Worldwide AAWW and Copa Holdings CPA as these possess the perfect combination of elements to beat estimates this earnings season.

Expeditors has an Earnings ESP of +6.67% and a Zacks Rank of 3, currently. This company is set to release second-quarter financial numbers on Aug 4.

Atlas Air has an Earnings ESP of +19.81% and a Zacks Rank #2 at present. The company will release second-quarter 2020 results on Aug 6.

Copa Holdings has an Earnings ESP of +19.18% and is Zacks #3 Ranked, presently. The company will release second-quarter 2020 results on Aug 5.

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