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Danaos (DAC) to Report Q1 Earnings: What's in the Offing?

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Danaos Corporation (DAC - Free Report) is scheduled to release first-quarter 2021 results on May 10, after market close.

The shipping company has a stellar surprise record as its earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average being 9.2%.

Danaos Corporation Price and EPS Surprise

Danaos Corporation Price and EPS Surprise

Danaos Corporation price-eps-surprise | Danaos Corporation Quote

Moreover, the Zacks Consensus Estimate for first-quarter earnings has been revised 1.41% upward over the past 60 days.

Against this backdrop, let’s examine the factors that are likely to have impacted the company’s March-quarter performance.

We expect Danaos’ first-quarter bottom-line performance to have been hurt by higher vessel operating expenses, mainly due to the increase in the average number of vessels in its fleet. Moreover, coronavirus-induced supply-chain disruptions are likely to dent this shipping company’s results.

However, the bullishness surrounding the containership market is likely to have aided the first-quarter performance of Danaos. Notably, the containership market is being driven by increased manufacturing activities in Asia in addition to inventory restocking and greater demand for goods rather than services in Europe and the United States.

The already high container rates further moved north following the Suez Canal crisis in March-end since multiple containership vessels were either stuck or diverted around South Africa. This, in turn, induced elimination or supply shortage of ships and containers. The Suez-canal congestion is likely to partly aid the first-quarter results as the incident took place toward the end of March.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Danaos this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise, which is not the case here as shown below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Danaos has an Earnings ESP of 0.00% as the Most Accurate Estimate is in line with the Zacks Consensus Estimate of $2.87. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Danaos carries a Zacks Rank #3, currently.

Highlights of Q4 Earnings

In the last reported quarter, Danaos’ earnings (excluding 22 cents from non-recurring items) of $2.29 per share edged past the Zacks Consensus Estimate of $2.27. Moreover, the bottom line increased13.9% on a year-over-year basis. Quarterly revenues of $119.6 million too surpassed the Zacks Consensus Estimate of $115.5 million.

Stocks to Consider

Investors interested in the broader Transportation  sector may consider  Eagle Bulk Shipping  (EGLE - Free Report) ,  Euronav NV  (EURN - Free Report) and  GasLog LP as these stocks possess the right combination of elements to beat on earnings this reporting cycle.

Eagle Bulk has an Earnings ESP of +64.52% and a Zacks Rank of 1, currently.

Euronav has an Earnings ESP of +7.14% and a Zacks Rank #3 at present.
 
GasLog presently has an Earnings ESP of +20.69% and a Zacks Rank #2.
 
Each of the companies will release first-quarter 2021 results on May 6.

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Eagle Bulk Shipping Inc. (EGLE) - free report >>

Danaos Corporation (DAC) - free report >>

Euronav NV (EURN) - free report >>