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FRO has missed the Zacks Consensus Estimate for earnings in three of the last four quarters and met once, the average miss being 11.87%. The Zacks Consensus Estimate for earnings per share in the to-be-reported quarter has declined 7.1% over the past 60 days.
Against this backdrop, let’s take a look at the factors that may have shaped the company’s December-quarter performance.
FRO’s performance in the fourth quarter is expected to have been affected by supply-chain disruptions. High operating expenses due to increased average number of vessels in its fleet and fuel expenses are likely to have hurt the bottom line. Even though fuel price has come down from the highs witnessed earlier, it still remains at an elevated level.
However, high tanker rates are likely to have aided the top-line performance. Moreover, with the resumption of economic activities, world trade gained pace, which is likely to aid fourth-quarter results of shipping stocks like Frontline. This is because the shipping industry is responsible for transporting several goods involved in world trade.
The recent attacks by Yemen’s Houthi militants on vessels in Red Sea have disrupted maritime trade. As a result, many shipping companies, including FRO, have hit the pause button as far as transit through this route is concerned.
Keeping the safety of the crew in mind, FRO is 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.
What Does the Zacks Model Say?
The proven Zacks model does not conclusively predict an earnings beat for FRO 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: Frontline has an Earnings ESP of +7.01% as the Most Accurate Estimate of 56 cents is higher than the Zacks Consensus Estimate by 4 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Delta Air Lines’ (DAL - Free Report) fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.5% on a year-over-year basis due to high labor costs.
Revenues of $14.22 billion surpassed the Zacks Consensus Estimate of $14.07 billion and increased 5.9% on a year-over-year basis, driven by strong holiday-air-travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $13.66 billion, up 11% year over year.
United Airlines (UAL - Free Report) reported fourth-quarter 2023 earnings per share (excluding 19 cents from non-recurring items) of $2, which outpaced the Zacks Consensus Estimate of $1.61 but declined 18.7% year over year.
Operating revenues of $13.6 billion beat the Zacks Consensus Estimate of $13.5 billion. The top line increased 9.9% year over year due to upbeat air-travel demand. Cargo revenues fell 14.8% year over year to $402 million. Revenues from other sources jumped 10.6% year over year to $803 million.
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Frontline (FRO) to Report Q4 Earnings: What's in Store?
Frontline Plc (FRO - Free Report) is expected to report its fourth-quarter 2023 results on Feb 29, before market open.
FRO has missed the Zacks Consensus Estimate for earnings in three of the last four quarters and met once, the average miss being 11.87%. The Zacks Consensus Estimate for earnings per share in the to-be-reported quarter has declined 7.1% over the past 60 days.
Frontline PLC Price and EPS Surprise
Frontline PLC price-eps-surprise | Frontline PLC Quote
Against this backdrop, let’s take a look at the factors that may have shaped the company’s December-quarter performance.
FRO’s performance in the fourth quarter is expected to have been affected by supply-chain disruptions. High operating expenses due to increased average number of vessels in its fleet and fuel expenses are likely to have hurt the bottom line. Even though fuel price has come down from the highs witnessed earlier, it still remains at an elevated level.
However, high tanker rates are likely to have aided the top-line performance. Moreover, with the resumption of economic activities, world trade gained pace, which is likely to aid fourth-quarter results of shipping stocks like Frontline. This is because the shipping industry is responsible for transporting several goods involved in world trade.
The recent attacks by Yemen’s Houthi militants on vessels in Red Sea have disrupted maritime trade. As a result, many shipping companies, including FRO, have hit the pause button as far as transit through this route is concerned.
Keeping the safety of the crew in mind, FRO is 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.
What Does the Zacks Model Say?
The proven Zacks model does not conclusively predict an earnings beat for FRO 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: Frontline has an Earnings ESP of +7.01% as the Most Accurate Estimate of 56 cents is higher than the Zacks Consensus Estimate by 4 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: FRO currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.
Q4 Performances of Other Transportation Companies
Delta Air Lines’ (DAL - Free Report) fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.5% on a year-over-year basis due to high labor costs.
Revenues of $14.22 billion surpassed the Zacks Consensus Estimate of $14.07 billion and increased 5.9% on a year-over-year basis, driven by strong holiday-air-travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $13.66 billion, up 11% year over year.
United Airlines (UAL - Free Report) reported fourth-quarter 2023 earnings per share (excluding 19 cents from non-recurring items) of $2, which outpaced the Zacks Consensus Estimate of $1.61 but declined 18.7% year over year.
Operating revenues of $13.6 billion beat the Zacks Consensus Estimate of $13.5 billion. The top line increased 9.9% year over year due to upbeat air-travel demand. Cargo revenues fell 14.8% year over year to $402 million. Revenues from other sources jumped 10.6% year over year to $803 million.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.