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Teekay Tankers (TNK) to Post Q1 Earnings: What's in Store?

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Teekay Tankers (TNK - Free Report) is scheduled to release first-quarter 2020 earnings on May 21, before market open.

The company has a decent earnings record, having delivered a positive surprise in three of the last four quarters while matching estimates in the remaining one. The average beat is 13%.

Teekay Tankers Ltd Price and EPS Surprise

 

Teekay Tankers Ltd Price and EPS Surprise

Teekay Tankers Ltd price-eps-surprise | Teekay Tankers Ltd Quote

However, the Zacks Consensus Estimate for first-quarter earnings has been revised 17.1% downward over the past 60 days.

Against this backdrop, let’s delve into the factors that might have impacted the company’s March-quarter performance.

Teekay Tankers’ performance in the to-be-reoported quarter is expected to have been affected by the coronavirus-induced supply-chain disruptions. Notably, the COVID-19 pandemic has spelt doom for the shipping industry, which is responsible for transporting the majority of goods involved in world trade and is rightfully considered the life line of the global economy. Moreover, the adoption of IMO 2020 might have also weighed on the company’s performance due to some short-term disturbance in the shipping network. Further, these headwinds are likely to have restricted the supply of new tanker fleet as was the case with another shipping company, namely Euronav NV , which reported first-quarter 2020 results earlier this month.

However, the increase in tanker freight rates following Saudi Arabia’s decision to charter multiple super-tankers for shipping crude oil to customers globally is likely to have boosted Teekay Tanker’s first-quarter performance. The plunge in oil prices (by 66.5%) during the January-March period is a bonus and is expected to have bolstered the bottom line in the to-be-reported quarter.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Teekay 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 odds of a positive surprise. But that is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Teekay Tankers has an Earnings ESP of -20.66% as the Most Accurate Estimate is pegged at 56 cents, below the Zacks Consensus Estimate of $2.71. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Teekay Tankers sports a Zacks Rank of 1, currently.

Highlights of Q4 Earnings

In the last reported quarter, the company delivered a positive earnings surprise of 3.4%. Moreover, the bottom line skyrocketed in excess of 100% year over year. However, revenues declined 16.1% to $201.1 million.

Stocks to Consider

Investors may consider Baidu (BIDU - Free Report) and CBL Properties (CBL - Free Report) as these stocks have the right combination of elements to beat on earnings this reporting cycle.

Baidu has an Earnings ESP of +4.45% and is Zacks#3 Ranked. The company will report first-quarter earnings on May 18.

CBL Properties an Earnings ESP of +8.11% and a Zacks Rank #3. The company will report first-quarter earnings on May 18.

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