Scorpio Tankers (STNG) Rises Despite Earnings Miss

NEW YORK (TheStreet) -- Scorpio Tankers  (STNG) rose 7.86% to $10.16 on Monday despite the company's announcement of fourth-quarter results that came up short of analysts' expectations.

The company reported a loss of 8 cents a share, 9 cents worse than the Capital IQ consensus estimate of an income of 1 cent a share. Revenues rose 77.4% year over year to $53.4 million, but this was well short of analysts' estimates of $69.72 million.

The company also announced that it sees a profitable first-quarter, while analysts expect 5 cents a share. Scorpio increased its quarterly dividend to 8 cents a share.

"Although our fourth quarter 2013 results reflect the deleterious effects of prolonged turnarounds of existing refineries and delays of commissioning the new refining assets, we remain confident in the underlying demand and supply thesis," said Chairman and CEO Emanuele Lauro in the company's statement. "Already in the first quarter, all of our vessel classes are experiencing higher returns than they did in the final quarter of 2013. We expect to be profitable this quarter..."

TheStreet Ratings team rates SCORPIO TANKERS INC as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate SCORPIO TANKERS INC (STNG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its price level of one year ago, STNG is up 12.10% to its most recent closing price of 9.26. Looking ahead, our view is that this company's fundamentals should not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • STNG's very impressive revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues leaped by 101.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SCORPIO TANKERS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, SCORPIO TANKERS INC continued to lose money by earning -$0.65 versus -$2.59 in the prior year.
  • The gross profit margin for SCORPIO TANKERS INC is rather low; currently it is at 23.36%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.15% trails the industry average.
  • Net operating cash flow has significantly decreased to -$0.58 million or 128.47% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: STNG Ratings Report

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