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Teekay Tankers (TNK) to Post Q2 Earnings: What's in Store?

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Teekay Tankers (TNK - Free Report) is scheduled to release second-quarter 2020 earnings on Aug 13, before market open.

The company has an impressive earnings record with its bottom line having delivered a positive surprise in each of the last four quarters. The average beat is 18%.

Teekay Tankers Ltd. Price and EPS Surprise

Teekay Tankers Ltd. Price and EPS Surprise

Teekay Tankers Ltd. price-eps-surprise | Teekay Tankers Ltd. Quote

However, the Zacks Consensus Estimate for second-quarter earnings has been revised 6.5% downward over the past 60 days.

Against this backdrop, let’s delve into the factors that might have impacted the company’s June-quarter performance.

Teekay Tankers’ performance in the to-be-reported quarter is expected to have been affected by the coronavirus-induced supply-chain disruptions. Notably, the COVID-19 pandemic already spelt doom for the shipping industry, which is responsible for transporting the majority of goods involved in world trade and is rightfully considered the life line of the global economy.

Additionally, low tanker rates in the April-June period might have dented the company’s performance. Consequently, total revenues are expected to have been low. Notably, oil prices rebounded in the second quarter from the rock-bottom levels of the first quarter of this year. This, in turn, might have weakened the tanker rates.

However, the company’s strong cash flow generation is a positive as far its liquidity position is concerned in these challenging times. Solid cash flow is expected to reflect on the stock’s June-quarter results.

What Does the Zacks Model Unveil?

Our proven model does not predict an earnings beat for Teekay Tankers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. However, that is not the case here as described below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Teekay Tankers has an Earnings ESP of 0.00% as the Most Accurate Estimate is in line with the Zacks Consensus Estimate of $2.9. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank:  Teekay Tankers carries a Zacks Rank #5 (Strong Sell), currently.

Highlights of Q1 Earnings

In the last reported quarter, the company delivered an earnings surprise of 19.9%. Moreover, the bottom line skyrocketed in excess of 100% year over year. However, revenues declined 4.2% to $222.7 million.

Snapshots of Sectorial Releases

Below we present the second-quarter reports of three top-ranked companies in the Zacks Transportation sector.

Canadian National Railway Company’s (CNI - Free Report) second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share met the Zacks Consensus Estimate. However, the bottom line declined 28.7% year over year.

Quarterly revenues of $2,315 million missed the Zacks Consensus Estimate of $2,407.6 million and also fell 21.8% year over year. This downtick was primarily caused by COVID-19-led soft volumes across most commodity groups and lower fuel surcharge rates. The company carries a Zacks Rank #2, presently.

Canadian Pacific Railway Limited’s (CP - Free Report) second-quarter 2020 earnings (excluding 42 cents from non-recurring items) of $2.94 per share surpassed the Zacks Consensus Estimate of $2.75. However, quarterly earnings declined 8.4% year over year.

Quarterly revenues of $1,292.8 million lagged the Zacks Consensus Estimate of $1,299.9 million. The top line also fell 12.5% on a year-over-year basis due to depressed freight revenues. The company presently carries a Zacks Rank of 2.

Werner Enterprises (WERN - Free Report) delivered second-quarter 2020 earnings per share (excluding 6 cents from non-recurring items) of 62 cents, which surpassed the Zacks Consensus Estimate of 40 cents. However, the bottom line dipped 1.6% year over year. Moreover, total revenues of $569 million missed the Zacks Consensus Estimate of $580.8 million and also dropped 9.3% year over year due to soft fuel surcharge and logistics revenues. The company has a Zacks Rank of 2, currently.

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