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Danaos (DAC) to Report Q3 Earnings: What's in the Offing?

Danaos Corporation DAC is scheduled to release third-quarter 2021 results on Nov 8, after market close.

The shipping company has an impressive surprise record as its earnings beat the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the remaining one), the average beat being 1.2%.

Danaos Corporation Price and EPS Surprise

Danaos Corporation price-eps-surprise | Danaos Corporation Quote

The Zacks Consensus Estimate for third-quarter earnings was stable at $3.26 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 higher vessel operating expenses, mainly due to the increase in the average number of vessels in its fleet. With oil price moving north, escalated fuel costs are also likely to have flared up total expenses.

However, with the gradual resumption of economic activities, the world trade gathered pace, which should aid the third-quarter results of shipping stocks like Danaos. This is because the shipping industry is responsible for transporting a high proportion of goods involved in world trade.

Bullishness surrounding the containership market is a huge positive for Danaos and is likely to have boosted its top line in the soon-to-be-reported quarter. The containership market is being aided by increased manufacturing activities in Asia besides other factors.

Earnings Whispers

Our proven model does not predict an earnings beat for Danaos 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: Danaos has an Earnings ESP of 0.00% as the Most Accurate Estimate is in line with the Zacks Consensus Estimate of $3.26. You can uncover the best stocks to buy or sell before they’re reported with our  Earnings ESP Filter.

Zacks Rank: Danaos carries a Zacks Rank #3, currently.

Highlights of Q2 Earnings

Danaos’ second-quarter earnings (excluding $14.76 from non-recurring items) of $3.34 per share surpassed the Zacks Consensus Estimate by 8 cents. Total revenues of $146.4 million increased 25.4% year over year and also surpassed the Zacks Consensus Estimate of $142 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 is Zacks #3 Ranked, 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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