Shipping Stocks' Earnings Slated For Aug 8: NAT, NVGS & TDW

As the Q2 earnings season for the transportation sector draws to a close, a number of aspects come to the forefront. The sector is faced with multiple headwinds, which are reflected in the 12.4% year-over-year decline in earnings and the 1.3% drop in revenues in Q2, as per our latest Earnings Trends report. However, the sector has seen a healthy proportion of companies (66.7% in the S&P 500 space) beating the Zacks Consensus Estimate with respect to the bottom line. The impressive beat ratio has emanated from bottom-line outperformance by key players like Delta Air Lines (NYSE:DAL) , Ryder System (NYSE:R) and Expeditors International of Washington Inc. (NASDAQ:EXPD) .

However, the overall earnings growth is still negative with the Energy sector seeing the greatest contraction (76.9%) in terms of the bottom line. In fact, 7 of the 16 Zacks sectors are expected to end Q2 with earnings growth in the negative territory. The entire S& P 500 index is projected to end Q2 with earnings growth of -3.1%, which is a marked improvement from the comparable figure of -6.5% in 1Q16.

With all the S&P 500 members in the transportation sector having already reported their quarterly numbers, there are only a handful of companies left to report. Most of the “still-to-report” companies are shipping stocks. In fact, the shipping industry is going through tough times due to low freight rates, overcapacity, a dearth of bank financing, among other headwinds.

In the wake of these challenging factors, let’s take a look at how these three shipping stocks are poised ahead of their quarterly results.

Nordic American Tankers Limited (NYSE:NAT) is engaged in acquiring, disposing, owning, leasing, and chartering multiple double hull Suezmax oil tankers. According to our quantitative model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #3 (Hold) or better – to increase the odds of an earnings surprise. Nordic American Tankers has a Zacks Rank #4 (Sell) and an Earnings ESP of -20.00% (Most Accurate estimate is 3 cents below the Zacks Consensus Estimate of 15 cents). The unfavorable combination makes an earnings beat unlikely for the company. Please note that we caution against Sell-rated (#4 or 5) stocks going into the earnings announcement. The company is slated to release its second-quarter results on Aug 8.

Navigator Holdings Ltd. (NYSE:NVGS) provides international seaborne transportation and regional distribution services of liquefied petroleum gas, petrochemical gases and ammonia to energy companies, industrial users and commodity traders.The company has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00% (Most Accurate estimate is in line with the Zacks Consensus Estimate of 23 cents). The unfavorable combination dims the hopes of an earnings beat for the company. The company will report its second-quarter results on Aug 8.

Tidewater Inc. (NYSE:TDW) owns and operates one of the world's largest fleets which serve the international offshore energy industry. The company has a Zacks Rank #3 and an Earnings ESP of 0.00% (Most Accurate estimate is in line with the Zacks Consensus Estimate). The unfavorable combination makes an earnings beat unlikely for the company. The company is expected to release its first-quarter fiscal 2017 results on Aug 8.