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Crude Oil Tanker Stocks: Estimates, Recommendations for 2Q17

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Part 4
Crude Oil Tanker Stocks: Estimates, Recommendations for 2Q17 PART 4 OF 11

Nordic American Tankers: 2Q17 Earnings Expected to Fall

NAT’s conference call

On June 13, 2017, Nordic American Tankers (NAT) held a conference call for its investors and shareholders. The company said that 1Q17 wasn’t a good quarter in a volatile market and that 2Q17 will be worse. However, rates will be above the cash break-even level. Now let’s see what analysts think about NAT’s second quarter.

Nordic American Tankers: 2Q17 Earnings Expected to Fall

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Analysts’ revenue and earnings estimates

Most of NAT’s vessels are employed in the spot market. That means its revenue tends to be volatile due to fluctuations in tanker rates. Suezmax rates fell to the lowest of the year in June and are almost 80.0% lower than at the start of the year. So a fall in NAT’s 2Q17 revenue won’t be a surprise.

Wall Street analysts expect NAT’s revenue to be $47.2 million in 2Q17, which is lower than 1Q17’s revenue of $55.2 million. Its revenue is expected to be 23.4% lower year-over-year. Fiscal 2017 revenue is expected to be $207.0 million, which is 12.5% lower than $236.7 million reported in 2016.

Let’s look now at NAT’s peers. Teekay Tankers’ (TNK) 2017 revenue is estimated to be 33.0% lower than 2016 revenue. Frontline’s (FRO) 2017 revenue is estimated to be 30.8% lower YoY (year-over-year). Analysts estimate DHT Holdings’ (DHT) and Euronav’s (EURN) 2017 revenues to be 4.5% and 24.8% lower, respectively.

Analysts estimate that NAT’s EBITDA (earnings before interest, tax, depreciation, and amortization) in 2Q17 will be $24.6 million, a 17.4% fall from $29.8 million reported in 1Q17 and a 37.0% fall from $39.1 million in 2Q16. The 2017 EBITDA estimate stands at $108.0 million, which is 25.0% lower than $144.0 million for 2016.

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