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What's in Store for Ardmore Shipping (ASC) in Q4 Earnings?

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Ardmore Shipping Corporation (ASC - Free Report) is scheduled to release fourth-quarter 2023 earnings on Feb 15.

ASC beat the Zacks Consensus Estimate in each of the last four quarters by an average of 4.33%.

The Zacks Consensus Estimate for quarterly earnings per share has remained stable at 59 cents over the past 60 days.

Against this backdrop, let’s take a look at the factors that might have shaped the company’s December-quarter performance.

We expect Ardmore Shipping’s results to reflect bullishness surrounding the tanker market as product tanker rates are currently at healthy levels despite minor hiccups. Also, normalization of economic activities and an uptick in world trade following the removal of COVID-19-induced restrictions are expected to have boosted ASC’s top-line performance.

The recent attacks by Yemen’s Houthi militants on vessels in Red Sea have disrupted maritime trade. As a result, many shipping companies including ASC have hit the pause button as far as transit through this route is concerned.

Keeping the safety of the crew in mind, Ardmore Shippingis adopting the longer and costlier route around Cape of Good Hope in South Africa rather than through Suez Canal. Reduced container availability due to the Red Sea tensions has resulted in a rise in freight rates. Lower capacity is expected to have boosted earnings.

Time Charter Equivalent or TCE rates, which represent net revenues (revenues less voyage expenses) divided by revenue days, are likely to have improved in the to-be-reported quarter due to favorable spot rates. However, costs are likely to have been steep due to a rise in oil prices and supply-chain troubles

What Does the Zacks Model Say?

The proven Zacks model does not predict an earnings beat for ASC 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, which is not the case here.

Earnings ESP:  Ardmore Shipping has an Earnings ESP of -5.09% as the Most Accurate Estimate is currently pegged at 56 cents, 3 cents below the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Ardmore Shipping currently carries a Zacks Rank #3.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on their fourth-quarter 2023 earnings.

International Seaways (INSW - Free Report) currently has an Earnings ESP of +3.51% and a Zacks Rank #3. The company is set to release fourth-quarter 2023 earnings report on Feb 29.

The Zacks Consensus Estimate for INSW’s earnings in fourth-quarter 2023 has been revised upward by 7.77% in the past 60 days to $2.08 per share.

Star Bulk Carriers (SBLK - Free Report) presently has an Earnings ESP of +6.40% and a Zacks Rank #3. The company is set to release fourth-quarter 2023 earnings report on Feb 15.

SBLK’s earnings surprise history has been impressive, as it has surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed in one, the average beat being 33.08%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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