Scorpio Tankers (NYSE:STNG) Posts Earnings Results, Beats Expectations By $0.43 EPS

Scorpio Tankers (NYSE:STNG) posted its quarterly earnings data on Wednesday. The shipping company reported $2.49 EPS for the quarter, beating analysts’ consensus estimates of $2.06 by $0.43, FiscalAI reports. The firm had revenue of $266.47 million for the quarter, compared to the consensus estimate of $243.98 million. Scorpio Tankers had a net margin of 77.07% and a return on equity of 17.62%. The firm’s revenue was up 10.4% compared to the same quarter last year. During the same period in the prior year, the firm posted $1.49 EPS.

Here are the key takeaways from Scorpio Tankers’ conference call:

• Strong third-quarter results included $172 million of adjusted EBITDA and $127 million of adjusted net income, while the company reduced debt by $200 million and recorded a $153 million gain on vessel sales.
• Product tanker markets have accelerated sharply entering the seasonally stronger fourth quarter, with Q4 bookings of approximately $181,000 per day for LR2s, $56,000 for MRs, and $40,000 for Handymax vessels.
• Scorpio raised its quarterly dividend 67% to $0.75 per share and said it expects to continue increasing the dividend annually, supported by more than $2 billion of cash, $483 million of undrawn revolver capacity, and cash break-even rates below $11,000 per day.
• Management sees favorable structural market conditions from rising refinery runs, low inventories, longer trade routes, and constrained effective clean-tanker supply; it estimates underlying product-tanker fleet growth could be as low as 1% after accounting for older-vessel retirements and LR2s trading crude.
• The company has approximately $1.3 billion of remaining commitments for 17 newbuildings and equity contributions to an eight-VLCC joint venture, although management says its liquidity is sufficient to fund these commitments without additional debt.

Scorpio Tankers Trading Down 3.1%

Scorpio Tankers stock traded down $2.96 during midday trading on Friday, reaching $92.11. The stock had a trading volume of 790,716 shares, compared to its average volume of 1,053,599. Scorpio Tankers has a 52-week low of $48.93 and a 52-week high of $95.60. The firm has a market cap of $4.64 billion, a price-to-earnings ratio of 4.87 and a beta of -0.17. The company has a fifty day moving average of $83.41 and a 200 day moving average of $76.62. The company has a quick ratio of 6.89, a current ratio of 6.93 and a debt-to-equity ratio of 0.14.

Scorpio Tankers Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, December 4th. Shareholders of record on Friday, November 13th will be paid a $0.75 dividend. This represents a $3.00 annualized dividend and a yield of 3.3%. The ex-dividend date is Friday, November 13th. This is an increase from Scorpio Tankers’s previous quarterly dividend of $0.45. Scorpio Tankers’s dividend payout ratio is presently 9.53%.

Insider Buying and Selling at Scorpio Tankers

In related news, COO Cameron Mackey sold 125,000 shares of the stock in a transaction on Thursday, September 17th. The stock was sold at an average price of $89.03, for a total value of $11,128,750.00. Following the completion of the transaction, the chief operating officer directly owned 739,531 shares of the company’s stock, valued at approximately $65,840,444.93. This represents a 14.46% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider Auste Adelborg sold 6,834 shares of the business’s stock in a transaction on Thursday, September 17th. The shares were sold at an average price of $89.64, for a total value of $612,599.76. The disclosure for this sale is available in the SEC filing. In the last three months, insiders sold 420,133 shares of company stock worth $36,611,311. 7.34% of the stock is currently owned by company insiders.

Analyst Upgrades and Downgrades

Several analysts recently commented on STNG shares. Needham & Company LLC set a $130.00 price target on shares of Scorpio Tankers in a report on Thursday. B. Riley Financial reiterated a “buy” rating and set a $130.00 price objective (up from $120.00) on shares of Scorpio Tankers in a report on Thursday. Weiss Ratings reissued a “hold (c)” rating on shares of Scorpio Tankers in a research report on Monday, September 14th. Morgan Stanley raised their target price on shares of Scorpio Tankers from $76.00 to $90.00 and gave the company an “equal weight” rating in a report on Tuesday, October 13th. Finally, Jefferies Financial Group reiterated a “buy” rating and issued a $100.00 price objective on shares of Scorpio Tankers in a report on Tuesday, August 4th. Five research analysts have rated the stock with a Buy rating, five have given a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the stock has a consensus rating of “Hold” and an average target price of $105.33.

About Scorpio Tankers

Scorpio Tankers Inc is a marine transportation company that owns, operates and manages a fleet of product tankers. The company primarily transports refined petroleum products, including gasoline, diesel, jet fuel and heating oil, as well as petrochemical feedstocks and other liquid products.

Its fleet has historically included medium-range, handymax and long-range product tankers, allowing Scorpio Tankers to serve both regional and long-haul trade routes. The company’s vessels transport cargoes between major refining, storage and consumption centers across international markets, supporting energy companies, commodity traders and other commercial customers.

Scorpio Tankers was established in 2009 and is incorporated in the Marshall Islands, with corporate operations based in Monaco.