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Navios Maritime (NMM) to Report Q4 Earnings: A Beat Likely?

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Navios Maritime Partners L.P. NMM is scheduled to release fourth-quarter 2019 earnings numbers on Feb 10, before market open. We note that Master limited partnerships (or MLPs) differ from regular stocks because interests in them are referred to as units. Notably, unitholders (not shareholders) are partners in the business.

The company has a decent track record with respect to earnings per share, having outperformed the Zacks Consensus Estimate in two of the last four quarters. It reported lower-than-expected earnings per share in the other two quarters.

Navios Maritime Partners LP Price and EPS Surprise


Navios Maritime Partners LP Price and EPS Surprise

Navios Maritime Partners LP price-eps-surprise | Navios Maritime Partners LP Quote

Given this backdrop, let’s delve into the factors that might have influenced the company’s performance in the quarter.

Navios Maritime’s fourth-quarter performance is likely to have been adversely impacted due to weakness pertaining to the time charter equivalent rate (TCE). TCE refers to voyage and time charter revenues less voyage expenses during a time period divided by the number of available days.

Moreover, time charter and voyage revenues in the December-end quarter are likely to have been affected due to sale of the Navios Felicity and the Navios Libra II in December 2018 and the Navios Galaxy I in April 2019.  Additionally, Navios Maritime’s bottom-line number is likely to reflect the negative impact of higher direct vessel expenses.

However, Navios Maritime’s top-line figure is likely to reflect the positive impact of the company’s acquisition of vessels like Navios Mars and the Navios Sphera in August 2018 and delivery of the Navios Libra in July 2019. Additionally, impressive Dry bulk shipping rates for most of the October-December period are likely to have aided Navios Maritime’s quarterly performance.

Highlights of Q3 Earnings

In the last reported quarter, the company delivered a positive earnings surprise of 28.5%. Moreover, earnings per unit improved 11.3% year over year to $1.67. Revenues improved 1.6% to $63.5 million.

Earnings Whispers

With the Zacks Consensus Estimate for the company’s fourth-quarter earnings being revised 10.7% downward in the past 60 days mainly due to weakness pertaining to time charter and voyage revenues, an earnings beat might not be too difficult for Navios Maritime in the to-be-reported quarter.

In fact, our proven model conclusively shows a beat for Navios Maritime this earnings season based on the combination of the following two key ingredients: a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Navios Maritime has an Earnings ESP of +20.6% as the Most Accurate Estimate is pegged at $1.2, higher than the Zacks Consensus Estimate of $1. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Navios Maritime currently carries a Zacks Rank of 3.

Stocks to Consider

Investors may consider Frontline Ltd. (FRO), Arista Networks (ANET) and Altice USA (ATUS) as these stocks possess the right combination of elements to come up with earnings beats in their next releases.

Frontline is a Zacks #1 Ranked stock and has an Earnings ESP of +41.18%. The company is slated to report fourth-quarter figures on Feb 28.

Arista Networks has an Earnings ESP of +2.72% and currently holds a Zacks Rank of 2. The company will release earnings results on Feb 13.

Altice has an Earnings ESP of +11.11% and currently carries a Zacks Rank of 3. The company will report quarterly numbers on Feb 12.

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