Scorpio Tankers (NYSE:STNG) Releases Quarterly Earnings Results, Beats Estimates By $0.43 EPS

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

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 Stock Performance

Shares of NYSE:STNG traded down $2.56 during trading on Friday, hitting $92.51. The company’s stock had a trading volume of 543,159 shares, compared to its average volume of 1,052,151. The company has a debt-to-equity ratio of 0.14, a current ratio of 6.93 and a quick ratio of 6.89. The firm has a market cap of $4.66 billion, a price-to-earnings ratio of 4.90 and a beta of -0.17. Scorpio Tankers has a 12 month low of $48.93 and a 12 month high of $95.60. The company has a 50-day moving average of $83.41 and a 200-day moving average of $76.62.

Scorpio Tankers Increases Dividend

The company 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 dividend of $0.75 per share. The ex-dividend date is Friday, November 13th. This represents a $3.00 dividend on an annualized basis and a dividend yield of 3.2%. This is an increase from Scorpio Tankers’s previous quarterly dividend of $0.45. Scorpio Tankers’s dividend payout ratio is presently 9.53%.

Insiders Place Their Bets

In related news, President Robert Bugbee sold 231,799 shares of the stock in a transaction that occurred on Wednesday, September 16th. The stock was sold at an average price of $86.19, for a total transaction of $19,978,755.81. Following the completion of the transaction, the president directly owned 665,288 shares of the company’s stock, valued at approximately $57,341,172.72. This represents a 25.84% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, CFO Christopher Avella sold 56,500 shares of the firm’s stock in a transaction that occurred on Wednesday, September 16th. The shares were sold at an average price of $86.57, for a total value of $4,891,205.00. Following the completion of the sale, the chief financial officer directly owned 178,834 shares of the company’s stock, valued at $15,481,659.38. The trade was a 24.01% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 420,133 shares of company stock worth $36,611,311 over the last quarter. Company insiders own 7.34% of the company’s stock.

Wall Street Analyst Weigh In

Several research firms have commented on STNG. Morgan Stanley lifted their price target on shares of Scorpio Tankers from $76.00 to $90.00 and gave the stock an “equal weight” rating in a research note on Tuesday, October 13th. B. Riley Financial reiterated a “buy” rating and issued a $130.00 price objective (up from $120.00) on shares of Scorpio Tankers in a report on Thursday. Truist Financial set a $130.00 price objective on shares of Scorpio Tankers in a research report on Thursday. BTIG Research restated a “buy” rating and issued a $110.00 price objective on shares of Scorpio Tankers in a report on Wednesday. Finally, Wall Street Zen cut Scorpio Tankers from a “strong-buy” rating to a “buy” rating in a research note on Tuesday, July 14th. Five research analysts have rated the stock with a Buy rating, five have assigned a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, the stock has an average 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.