Diamond S Shipping is reporting robust fourth-quarter bookings for its suezmax fleet while lagging predictions for its medium-range (MR) product tankers.
The combination caused investment bank Jefferies to downgrade October-December earnings expectations for the Greenwich, Connecticut-based company, which is led by Craig H Stevenson Jr.
The fresh numbers come after Diamond S disappointed in its third-quarter results, turning in an adjusted loss of $18.9m, or $0.19 per share, against an analyst consensus estimate of a $0.12 loss per share.
The earnings miss was largely due to greater than expected off-hire days in the quarter, which caused weaker revenue, said Jefferies analyst Randy Giveans.
Diamond has booked 62% of its fourth-quarter suezmax operating days at $43,000 per day and 63% of its product tanker days at $13,500, the company said today.
The numbers exceed Jefferies’ expectations on the suezmax side while falling short on MRs, Giveans said.
The combination caused the bank to reduce fourth-quarter earnings estimates to $1 per share from $1.19.
Suezmax bookings also were better than peers, Giveans said, while MR fixtures were worse. The disappointment in product rates is largely down to vessels being out of position to leverage a market surge early in the quarter, he said.
However, Giveans noted that Diamond S reports the seven most-recent MR booking have all been done at better than $20,000 per day, fueling expectations for a better full-quarter number.
For Stifel analyst Ben Nolan, both Diamond’s suezmax and MR bookings fell short of expectations for the fourth quarter. He had estimated $72,000 a day for the crude tankers and $21,000 per day for the MRs.
“Given where rates stand today, the reported numbers should come up especially for the product tankers,” Nolan told clients.
Diamond’s result was better year over year, as the owner lost $22m, or $0.81 per share, in the third quarter of 2018.
Net revenue for the third quarter was $81.6m versus $39.6m a year ago, based largely on an expanded fleet following Diamond’s merger with Capital Product Partners earlier this year.
