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Teekay Tankers overview and 4Q14 earnings highlights

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Mar. 3 2015, Published 1:52 p.m. ET

4Q14: What’s in store

Since Teekay Tankers (TNK) reported its fourth quarter 2014 earnings on February 19, 2015, the company’s stock price has recorded a 4.3% decrease to date. Company peers like Frontline Ltd. (FRO), Nordic American Tanker Ltd. (NAT), DHT Holdings (DHT), and Teekay Corporation (TK) recorded a 10%, 1.8%, 6.2%, and 4.7% dip in the same period, respectively.

The PowerShares DB Oil Fund ETF (DBO) recorded 2.6% growth in same period. Supported with record tanker rates and new vessel acquisitions, TNK recorded significant growth in its revenue and cash flow. Meanwhile, the company swung to a net income this quarter from its loss in the same quarter a year ago. We will discuss this in detail throughout this series.

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Company profile

Teekay Tankers is formed by Teekay Corporation (TK) to expand its conventional oil tanker business. In addition, Teekay Tankers owns a minority interest in Tanker Investments Ltd., which currently owns a fleet of 20 modern tankers including six vessels to be acquired in first half of 2015.

The TNK chartering strategy includes vessel employment through a mix of short- or medium-term fixed-rate time charter contracts and spot tanker market trading. TNK has 28 owned vessels and seven chartered-in vessels.

Fleet growth

Teekay Tankers directly owns a fleet of 32 double-hull vessels, including 12 Aframax tankers, ten Suezmax tankers, seven Long Range two-product tankers (or LR2), and three Medium-Range (or MR) product tankers. The fleet includes three LR2 vessels and one Aframax vessel to be acquired in the first quarter of 2015. It has contracted 11 time charter-in conventional tankers.

Additionally, Teekay also owns a Very Large Crude Carrier (or VLCC) tankers, including six vessels to be acquired in the first half of 2015 through a 50% owned joint venture.

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