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Danaos (DAC) to Report Q4 Earnings: What's in the Offing?

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Danaos Corporation (DAC - Free Report) is scheduled to release fourth-quarter 2021 results on Feb 7, after market close.

The Zacks Consensus Estimate for fourth-quarter earnings has been raised 26.5% to $6.01 over the past 60 days. Soaring demand for goods and commodities, and upbeat trading volumes are likely to have contributed to this upward revision.

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

We expect Danaos’ fourth-quarter bottom-line performance to have been hurt by higher vessel operating expenses, mainly due to the increased average number of vessels in its fleet. With oil price moving north, escalated fuel costs are also likely to have flared up total expenses.

However, with the gradual resumption of economic activities, the world trade gathered pace, which should aid the fourth-quarter results of shipping stocks like Danaos. This is because the shipping industry is responsible for transporting a high proportion of goods involved in world trade.

Bullishness surrounding the containership market is a huge positive for Danaos and is likely to have boosted its top line in the to-be-reported quarter. The containership market is being aided by ramped-up manufacturing activities in Asia besides other factors.

Earnings Whispers

Our proven model does not 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. However, that is not the case here. 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 $6.01. You can uncover the best stocks to buy or sell before they’re reported with our  Earnings ESP Filter.

Zacks Rank: Danaos sports a Zacks Rank of 1, currently.

Highlights of Q3 Earnings

Danaos’ third-quarter earnings (excluding $5.23 from non-recurring items) of $5.32 per share increased more than 100% year over year. Total revenues of $195.9 million increased 64.7% year over year and also surpassed the Zacks Consensus Estimate of $157.9 million.

Stocks to Consider

Investors interested in the broader Transportation sector may consider stocks like Gol Linhas , Expeditors International of Washington (EXPD - Free Report) and Atlas Air Worldwide , which possess the right combination of elements to beat on earnings this reporting cycle.

Gol Linhas has an Earnings ESP of +8.29% and is Zacks #3 Ranked, presently. GOL will release fourth-quarter 2021 results on Feb 17.

Gol Linhas’ results are likely to be aided by the continued recovery in air-travel demand in Latin America owing to increased vaccinations.

Expeditors has an Earnings ESP of +2.97% and is Zacks #2 Ranked, presently. EXPD will release fourth-quarter 2021 results on Feb 22.

Upbeat airfreight revenues bolster Expeditors. Like the first three quarters of 2021, we expect airfreight revenues to aid EXPD’s fourth-quarter 2021 results.

Atlas Air Worldwide has an Earnings ESP of +3.11% and is Zacks #1 Ranked, presently. AAWW will release fourth-quarter 2021 results on Feb 17.

Atlas Air Worldwide’s fourth-quarter results are likely to be aided by strong demand for air freight amid the coronavirus pandemic. The boom in e-commerce trends amid the current scenario is a catalyst.


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