Shipping Stock Q3 Earnings Round The Corner: SSW, SALT, SB

The Q3 earnings season has been quite impressive so far and is likely to become the first quarter to witness earnings growth (in the S&P 500 Index) after five consecutive quarters of bottom-line contraction. According to our latest Earnings Preview report, the Q3 earnings season is expected to end with earnings growth of 1.4% on a year-over-year basis. Revenues are also projected to increase 1.4% year over year in Q3.

The report predicts that eleven of the sixteen Zacks sectors will end Q3 with bottom-line improvement. However, the transportation sector is projected to be one of the five sectors to see an earnings decline in Q3. In fact, this sector is expected to see the second-highest decline in earnings after the oil/energy sector.

The transportation sector is highly diversified in nature and includes several industries like shipping. Though the majority of the transportation sector members have already reported their quarterly numbers, most of the shipping stocks are yet to unveil their financial results. We note that the shipping industry is going through tough times due to low freight rates, overcapacity and a dearth of bank financing among other headwinds.

In the wake of these challenges, let’s take a peek into how these three shipping stocks are likely to fare in Q3. Each of these companies are scheduled to release their results on Oct 31.

Seaspan Corporation (NYSE:SSW) is a global leader in independent containership management and ownership. The company maintains a fleet of more than 80 chartered vessels. According to our model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) – to increase its odds of an earnings surprise. The Marshall Islands-based shipping company has a Zacks Rank #3. However, its Earnings ESP of -6.67% (the Most Accurate estimate is 28 cents while the Zacks Consensus Estimate is 2 cents higher) makes an earnings beat unlikely. You can see the complete list of today’s Zacks #1 Rank stocks here.

Monaco-based Scorpio Bulkers Inc. (NYSE:SALT) provides marine transportation of dry bulk commodities. The company, which is scheduled to report Q3 results on Oct 31, is likely to outperform on the bottom-line front as per our quantitative model. Scorpio Bulkers carries a Zacks Rank # 3 and an Earnings ESP of +6.9%.

Safe Bulkers, Inc. (NYSE:SB) is an international provider of marine drybulk transportation services. The company has a Zacks Rank #3. However, its Earnings ESP of 0.00% (the Most Accurate estimate in line with the Zacks Consensus Estimate) complicates surprise prediction.

Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

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