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Global Ship Lease (GSL) to Post Q3 Earnings: What's in Store?

High fuel costs are likely to have dented Global Ship Lease's (GSL) bottom-line performance in Q3.

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This story originally appeared on Zacks

Global Ship Lease GSL is scheduled to release third-quarter 2021 results on Nov 10, before market open.

- Zacks

The shipping company has an impressive surprise record as its earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average being 12.9%.

Global Ship Lease, Inc. Price and EPS Surprise

Global Ship Lease, Inc. Price and EPS Surprise

Global Ship Lease, Inc. price-eps-surprise | Global Ship Lease, Inc. Quote

The Zacks Consensus Estimate for third-quarter earnings has been revised downward to the tune of 3.37% over the past 60 days.

Against this backdrop, let’s examine the factors that are likely to have impacted the company’s September-quarter performance.

We expect Danaos’ third-quarter bottom-line performance to have been hurt by escalated time charter and voyage expenses. With oil price moving north, fuel costs are shooting up. This, in turn, is likely to have pushed up the operating costs in the to-be-reported quarter. Moreover, the Delta-variant induced operational disruptions are likely to have negatively impacted the shipping company’s performance in the September quarter.

However, the bullish sentiment surrounding the containership market is a huge blessing for Global Ship Lease and is likely to have boosted its top line in the soon-to-be-reported quarter. The containership market is being aided by the ramped-up manufacturing activities in Asia besides other factors.

Earnings Whispers

Our proven model does not predict an earnings beat for Global Ship Lease this time around. The combination of a positive  Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. However, that is not the case here. You can see  the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Global Ship Lease has an Earnings ESP of -32.56% as the Most Accurate Estimate is currently pegged at 58 cents, way below the Zacks Consensus Estimate of 86 cents. You can uncover the best stocks to buy or sell before they’re reported with our  Earnings ESP Filter.

Zacks Rank: Global Ship Lease carries a Zacks Rank #4 (Sell), currently.

Highlights of Q2 Earnings

Global Ship Lease’s second-quarter earnings (excluding 17 cents from non-recurring items) of 66 cents per share surpassed the Zacks Consensus Estimate by 10 cents. Total revenues of $82.9 million increased 16.1% year over year and also surpassed the Zacks Consensus Estimate of $79.4 million.

Stocks to Consider

Investors interested in the broader Transportation sector may consider stocks like Copa Holdings CPAAzul AZUL and Genko Shipping & Trading GNK, which possess the right combination of elements to beat on earnings this reporting cycle.

Copa Holdings has an Earnings ESP of +25.74% and is Zacks #3 Ranked, presently. The company will release third-quarter 2021 results on Nov 17.

Azul has an Earnings ESP of +3.70% and a Zacks Rank #3, presently. The company will release third-quarter 2021 results on Nov 11.

Genko Shipping & Trading has an Earnings ESP of +3.59% and is Zacks #2 Ranked, presently. The company will release third-quarter 2021 results on Nov 3.



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