Nordic American Tanker shares are surging ahead despite a big loss. Image source: Getty Images.

What happened

It's earnings season in America, but not only America. Crude oil shipper Nordic American Tankers (NYSE:NAT) -- which is actually headquartered in Bermuda -- reported its fiscal third-quarter earnings numbers early this morning. The news was good, and as of 12:45 p.m. EST, shares are up 11.9% in response.

So what

How good was the news, you ask? "Very" good, answers Nordic American, explaining that it "is not in the dry cargo or container sectors which have challenges," but rather "engaged in transportation of crude oil only." And with oil so cheap, there's plenty of demand for shipping it around the globe.

However, Nordic American's revenue in fiscal Q3 declined 31% year over year, to just $45.9 million. And whereas one year ago, NAT was able to report a $0.15-per-share profit from its business, this time around it was stuck with an $0.08-per-share loss! Which hardly seems "very" good to this observer.

Now what

Regardless, while these results were down, they were down less than Wall Street had been expecting. Leading up to earnings, the consensus opinion was that Nordic American's revenue would decline even more, to $39.5 million, and that its loss would have been worse -- $0.15. So from that context, investors' decision to reward Nordic American's earnings and sales declines with a big bump in stock price looks a bit more reasonable.

All that being said, investors still shouldn't get overconfident here. While Nordic American stock looks cheap at a current valuation of just 8.3 times earnings, those earnings are continuing to sink, the forward P/E ratio is much higher, and the stock remains deeply free cash flow negative to boot. Just because not all investors are abandoning ship today doesn't mean you should stick around until the next iceberg strikes.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.