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What's in Store for Teekay Tankers (TNK) in Q4 Earnings?

Zacks Equity Research

Teekay Tankers TNK is scheduled to release fourth-quarter 2019 earnings numbers on Feb 27, before market open.

The company flaunts an impressive earnings record, having delivered a positive earnings surprise in three of the last four quarters while meeting the bottom-line estimates in the remaining quarter. The average beat is roughly 49.7%.

Teekay Tankers Ltd. Price and EPS Surprise

 

Teekay Tankers Ltd. Price and EPS Surprise

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

Given this backdrop, let’s delve into the factors that might have influenced the company’s performance in the to-be-reported quarter.

Teekay Tankers’ top line in the fourth quarter is likely to have been aided by higher voyage charter revenues. Akin to the previous quarterly results, voyage charter revenues might have contributed to bulk of the top line.

Revenues are expected to have benefited from higher number of net revenue days in the December quarter owing to fewer scheduled dry dockings. Moreover, high oil tanker rates for most part of the quarter to be reported are likely to have driven the company’s quarterly performance.

However, Teekay Tankers’ bottom line is likely to reflect the negative impact of higher vessel operating expenses in the to-be-reported results, primarily due to maintenance and repair costs. Moreover, time-charter hire expenses in the period under review might have also been high due to a full-quarter operation of one chartered-in vessel delivered in late third-quarter 2019.

What Does the Zacks Model Say?

The proven Zacks model does not conclusively predict an earnings beat for Teekay Tankers this time around. The right 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 elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Teekay Tankers has an Earnings ESP of 0.00% as the Most Accurate Estimate is pegged at $2.54, 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: Teekay Tankers sports a Zacks Rank of 1, currently.

Highlights of Q3 Earnings

In the last reported quarter, the company delivered a positive earnings surprise of 11.1%. However, the bottom line was down 14.3% year over year. Moreover, revenues declined 46.2% to $94.6 million.

Stocks to Consider                                            

Investors may consider Azul AZUL, Frontline FRO and LATAM Airlines LTM as these stocks possess the right combination of elements to come up with an earnings beat in their next releases.

Azul has an Earnings ESP of +16.13% and is currently Zacks #1 Ranked. The company will release fourth-quarter earnings numbers on Mar 12.

Frontline is a #1 Ranked stock and has an Earnings ESP of +41.18%. The company will release fourth-quarter earnings numbers on Feb 27.

LATAM Airlines has an Earnings ESP of +6.38% and a Zacks Rank #2. The company will release fourth-quarter earnings numbers on Mar 3.

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