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What's in Store for Global Ship Lease (GSL) in Q3 Earnings?

Zacks Equity Research
·4 min read

Global Ship Lease GSL is scheduled to release third-quarter 2022 results on Nov 9, before the market opens.

GSL has an appreciative surprise record as its earnings surpassed the Zacks Consensus Estimate in three of the last four quarters (reporting in-line earnings in the remaining one), the average beat being 38.4%.

The Zacks Consensus Estimate for third-quarter earnings has declined 0.6% to $1.78 over the past 60 days.

Against this backdrop, let’s discuss the factors that might have impacted Global Ship Lease’s performance in the September quarter.

Bullishness surrounding the containership market is a huge boon for Global Ship Lease and is likely to have boosted its top line in the soon-to-be-reported quarter. Increased fleet utilization with the gradual resumption of economic activities and an uptick in world trade are likely to get reflected in GSL’s impending results. High container rates are also likely to have boosted its top line.

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On the flip side, high fuel costs due to the escalation in oil price are likely to have hurt the bottom-line performance in the to-be-reported quarter. Vessel operating expenses, including costs of crew, lubricating oil etc., are also likely to have been steep in the September quarter.

What Does the Zacks Model Say?

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 an earnings beat, which is not the case here as elaborated below. You can see  the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Global Ship Lease has an Earnings ESP of +1.97% as the Most Accurate Estimate is above the Zacks Consensus Estimate of $1.78 by 3 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 currently carries a Zacks Rank #4 (Sell).

Q3 Performances of Some Transportation Companies

Delta Air Lines’ DAL third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56. Escalated operating expenses induced the earnings miss. Multiple flight cancelations and booking weaknesses due to Hurricane Ian also hurt results. DAL reported earnings of 30 cents per share a year ago, muted in comparison to the current scenario, as air-travel demand was not so buoyant then.

DAL, currently carrying a Zacks Rank #3, reported revenues of $13,975 million, which lagged the Zacks Consensus Estimate of $14,157.2 million. Driven by high air-travel demand, total revenues increased more than 52% on a year-over-year basis.

United Airlines’ UAL third-quarter 2022 earnings (excluding 5 cents from non-recurring items) of $2.81 per share beat the Zacks Consensus Estimate of $2.21 and our estimate of $2.17. Upbeat air-travel demand aided results.

In the year-ago quarter, UAL, currently carrying a Zacks Rank #2, incurred a loss of $1.02 per share as air-travel demand was not as buoyant as in the current scenario. The third quarter of 2022 was the second consecutive profitable period at UAL since the onset of the pandemic.

Operating revenues of $12,877 million beat the Zacks Consensus Estimate of $12,709.5 million and our estimate of $12, 631.6 million. UAL’s revenues increased more than 66% year over year owing to an uptick in air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.2% from third-quarter 2019 (pre-coronavirus) levels.

J.B. Hunt Transport Services, Inc. JBHT, currently carrying a Zacks Rank of 3, reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the respective Zacks Consensus Estimate. JBHT’s quarterly earnings of $2.57 per share surpassed the Zacks Consensus Estimate of $2.45 and improved 36.7% year over year.

JBHT’s operating revenues of $3,838.3 million also outperformed the Zacks Consensus Estimate of $3803.4 million. The top line jumped 22.1% year over year on the back of strength across the Dedicated Contract Services, Intermodal, Truckload and Final Mile Services segments. Total operating revenues, excluding fuel surcharges, rose 12.4% year over year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.



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Global Ship Lease, Inc. (GSL) : Free Stock Analysis Report
 
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
 
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
 
J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
 
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Zacks Investment Research