Peek Into Shipping Stock Q3 Earnings On Nov 3: GLOG, TNK, TK

The Q3 earnings season has been quite impressive so far with most sectors displaying improved financials. The above-average performances have ignited hopes of a better economy. However, downward estimate revisions remain concerns. According to our latest Earnings Outlookarticle, more than 74.1% of S&P 500 members or 332 index members have already come up with their Q3 earnings reports as of Nov 1. On a year-over-year basis, earnings are up 1.9%, while revenues have improved 1.3% for these companies.

Shipping Stocks’ Earnings Performance

Despite improvement in the overall earnings picture, we note that shipping stocks – part of the broader transportation sector – have been lagging behind on the bottom-line front in Q3. With 93.3% of the transportation companies having reported their quarterly numbers as of Nov 1, we observe a 13.7% year-over-year decline in earnings. Given that most results are out, there is little scope for a turnaround in this sector in Q3. However, the sector saw a 1.3% year-over-year increase in revenues, in line with the trend across the index. Although 71.4% of the companies beat earnings estimates and 92.9% surpassed revenue expectations in the quarter, outlook for the transportation sector is not very encouraging as earnings expected to be down by 13.5% from the prior-year quarter.

Hence, it remains to be seen how these three shipping stocks are likely to perform when they report their quarterly results on Nov 3.

GasLog Ltd. (NYSE:GLOG) operates under two segments – vessel ownership and management of Liquefied Natural Gas (LNG). The company currently has a Zacks Rank #4 (Sell). Please note we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions. Also, it has an Earnings ESP of -33.3% as the Most Accurate Estimate stands at 2 cents while the Zacks Consensus Estimate is pegged at 3 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Teekay Tankers Ltd. (NYSE:TNK) provides marine transportation of crude oil. The company carries a Zacks Rank #4 and an Earnings ESP of 0.00%. We note that both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 17 cents. This renders our surprise prediction inconclusive.

Teekay Corporation (NYSE:TK) provides transportation services for crude oil and petroleum products worldwide. The company carries a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%. Thus, our proven model does not conclusively show that it is likely to beat estimates in Q3. You can see the complete list of today’s Zacks #1 Rank (Stong Buy) stocks here.

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