uploads///Stock price and EBITDA

Investors Disappointed with NAT’s Results despite Strong Revenues

Sue Goodridge - Author
By

Aug. 18 2020, Updated 4:44 a.m. ET

Revenues and EBITDA rose

Nordic American Tankers’ (NAT) net revenue rose to $77 million in 4Q15 from $67 million in the previous quarter and $43 million in 4Q14. The company’s EBITDA (earnings before interest, tax, depreciation, and amortization) also rose to $56 million from $50 million in the previous quarter.

The tanker industry experienced one of its strongest years in 2015. NAT’s net revenue rose by 90% to $287 million from 2014’s net revenue of $151 million. Along with robust tanker rates, 2015 also experienced low crude oil prices, which benefited tanker companies from the cost side as well. DHT Holdings (DHT) saw a whopping 180% EBITDA growth in 2015.

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Actual versus estimates

In 4Q15, Nordic American Tankers’ (NAT) revenues were 9.3% lower than Wall Street analysts’ consensus estimates of $85.3 million. Also, its EBITDA was lower by 9.6% than the estimate of $62 million.

In the last week, Euronav (EURN) and DHT Holdings (DHT) released its 4Q15 results. Both companies beat Wall Street analysts’ consensus revenue estimates.

Stock price

Nordic American Tankers’ net revenue rose by 79% and its operating cash flows rose by 16%. Despite this strong result, the stock price fell due to the company’s failure to meet analysts’ estimates. NAT’s results were announced on January 8, 2016. The next day, the company’s stock price fell by 7%. On the same day, the returns for other crude (DBO) tanker stocks were released:

  • Teekay Tankers (TNK) fell by 3%
  • Tsakos Energy Navigation (TNP) fell by 3%
  • Frontline (FRO) fell by 3%
  • DHT Holdings (DHT) fell by 7%
  • Euronav (EURN) fell by 2%

Series overview

In this series, we’ll look at Nordic American Tankers’ (NAT) 4Q15 results, and we’ll analyze the factors that could affect the company’s revenue and costs in 1Q16. We’ll also analyze NAT’s fleet and its recent investments.

Nordic American Tanker has a unique business model with low financial risk and a generous dividend payout. We’ll analyze both these factors in detail and we will wrap up the series by examining the company’s valuation.

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