Tanker operator Scorpio Tankers (NYSE: STNG) saw its stock jump nearly 16% in early Monday trading, before walking back that gain to just under 11% in the final minutes of trading Monday.
This being earnings season, you might expect Scorpio's stock surge to have something to do with an earnings report -- and you'd be right. On Monday, Scorpio reported fiscal Q4 and full-year 2016 earnings.
Actually, "fiscal losses" would be the more precise term. Scorpio reported an $0.18 per-share net loss for the fourth quarter, and a $0.15 per-share loss for the year. Both results were disappointing relative to the profits earned in the corresponding year-ago periods ($0.20 earned in Q4 2015, and $1.20 earned in fiscal 2015 as a whole). Nevertheless, Scorpio's loss appears to have been narrower than the $0.19 Wall Street had projected it would lose for Q4.
The fact that Scorpio reported a lower-than-expected per-share loss despite buying back nearly 3 million shares during the year (lowering the share count, and concentrating losses among fewer shares outstanding) made the "earnings beat" even more impressive.
Management did not provide guidance for the coming year in conjunction with its earnings release, but analysts seem optimistic. The consensus of analysts polled by Yahoo! Finance shows an expectation for $0.18 per share in positive profits at Scorpio Tankers this year.
That said, trends on the Baltic Tanker Clean Index (which tracks shipping rates chargeable for transportation of refined petroleum products) are showing a market downturn in the first six weeks of February, with rates dropping 33% since the start of the year. If Scorpio is to improve its results and reverse last year's loss for a 2017 profit, business had better pick up soon.