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Navios Maritime Partners (NMM) Q4 Earnings: What's in Store?

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Navios Maritime Partners L.P. (NMM - Free Report) is scheduled to release fourth-quarter 2018 earnings numbers on Jan 31, before market open. We note that Master limited partnerships (or MLPs) differ from regular stocks because interests in them are referred to as units. Notably, unitholders (not shareholders) are partners in the business.

In the last reported quarter, the partnership delivered a positive earnings surprise of 66.7%. Navios Maritime Partners also has an encouraging history with respect to the bottom line. The company has outshined the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 75%.

Let’s see how things are shaping up for this earnings season.

We expect the partnership’s fourth-quarter results to be aided by higher time charter and voyage revenues. The metric is also anticipated to increase on the back of revenue growth, following the acquisition of multiple vessels in 2017 and 2018. Increase in the time charter equivalent rate or TCE is too expected to boost time charter and voyage revenues in the to-be-reported quarter.

Additionally, the partnership is likely to benefit from its healthy liquidity position. Free cash flow is likely to improve in the fourth quarter of 2018. As a result of the upbeat cash position the partnership might acquire more vessels going forward. An update on the issue is not ruled out on the fourth-quarter conference call. Also, the partnership is expected to provide an update about its fleet on the call.

However, time charter and voyage expenses are likely to increase in the to-be-reported quarter, thereby limiting bottom-line growth.

Earnings Whispers

Our proven model does not conclusively show that Navios Maritime Partners is likely to beat estimates this earnings season. This is because a stock needs to have both — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. But that is not the case here as elaborated below.

Earnings ESP: Navios Maritime Partners has an Earnings ESP of -33.3%. This is because the Most Accurate Estimate is pegged at 4 cents per unit, lower than the Zacks Consensus Estimate of 6 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Navios Maritime Partners carries a Zacks Rank #2, which increases the predictive power of ESP. However, a company needs to have a positive ESP as well to be confident of a likely earnings surprise. This combination leaves surprise prediction inconclusive.

Other Stocks to Consider

Investors interested in the broader Transportation sector may consider Expeditors International of Washington, Inc. (EXPD - Free Report) , ArcBest Corporation (ARCB - Free Report) and Copa Holdings, S.A. (CPA - Free Report) as these possess the perfect mix of elements to beat on earnings this reporting cycle.

Expeditors has an Earnings ESP of +0.39% and a Zacks Rank #1.  The company will release fourth-quarter 2018 results on Feb 19. You can see the complete list of today’s Zacks #1 Rank stocks here.

ArcBest has an Earnings ESP of +4.78% and a Zacks Rank #2. The company will release fourth-quarter 2018 results on Jan 30.

Copa Holdings has an Earnings ESP of +6.93% and a Zacks Rank of 2. The company will release fourth-quarter 2018 results on Feb 13.

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