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Analysts Expect Frontline’s First-Quarter Revenue to Fall 30%


May. 30 2018, Updated 12:42 p.m. ET

Revenue estimates

Wall Street analysts estimate net revenues of $85.2 million for Frontline (FRO) in the first quarter. A sequential fall from $178.5 million in the previous quarter and a 30% fall from $121.9 million in the first quarter of 2017.

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Long-term estimates

In the second quarter, analysts expect the revenues to drop to $77.7 million. With a downward trend in the quarterly revenues, Frontline’s 2018 revenues are also expected to be lower. Analysts estimate Frontline’s 2018 revenues to be $401.9 million—37.8% lower from its revenues of $646.3 million in 2017.

Crude tanker rates have remained weak since the beginning of 2018. The industry’s crude tanker rates have hit some of the lowest numbers this year. The crude tanker rates have been hit hard due to supply and demand concerns. The primary reasons for the fall are OPEC’s oil production cuts, low cargo demand, and high fleet growth. The Middle East countries, especially Saudi Arabia and Angola—OPEC’s largest African producer, have reduced the oil production more than the output cut. The compliance to the production cuts has been more than 100%, which caused a decline in the cargoes from the Middle East. Lower industry rates are one of the main reasons why analysts expect a drop in Frontline’s 2018 revenues.

Peers’ revenues

  • Analysts expect Teekay Tankers’ (TNK) 2018 revenues to be $360 million—16.4% lower YoY (year-over-year).
  • Analysts expect Euronav’s (EURN) 2018 revenues to be $437 million—a 14.7% decrease YoY.
  • DHT Holdings’ (DHT) 2018 revenues are estimated to be $196 million—down 18.8% YoY.
  • Nordic American Tankers’ (NAT) 2018 revenues are estimated to be $141.5 million—8.5% lower YoY.

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