Danaos (DAC), a leaseholder for the container ship, reported first-quarter earnings after closing on Monday, exceeding expectations. However, Danaos’ stock declined slightly on Tuesday.
The company reports as shipping stocks come from higher, as concerns deepen the state of the economy. Concerns have been raised about declining demand for sea freight after rising profits last year, after the epidemic disrupted supply chains and increased shipping costs.
Container liner ZIM Integrated Shipping (ZIM) and freight carriers Golden Ocean Group (GOGL) reported Wednesday and Thursday, respectively.
Danaos income, shipping stock
Danaus earned $ 11.36 per share, higher than expected for 14 6.14 per share. Revenue of $ 229.9 million is the top forecast for $ 205.9 million, which in part is aided by newly acquired ships and the ability to charge more on ship leases.
The company said it had declared a 75-percent dividend per share for the first quarter. It also sold 1.5 million shares of ZIM, with an investment of $ 85.3 million. ZIM Danaos has a handful of large revenue drivers.
Located in Greece, Danaus leases its ships to other container liners. The quarterly results prompted Danaus to invest in expanding its shipping fleet. Danaos said that in recent weeks, it has entered into agreements to build two containerships in China for 15 156 million and four in South Korea for 37 372.7 million. The ships were set for delivery in 2024.
CEO John Costas said in a statement that container freight rates and lease prices have not yet been significantly affected by rising prices – as supply-chain backups and Russia’s war in Ukraine have pushed up oil and crop prices. However, he warned that investors have become more cautious.
“Although box freight rates and charter rates have not been significantly affected, sentiment has changed, and market participants have adopted a more conservative short-term attitude,” he said.
Danaus’s stock fell 3.4% to 78.91 on the stock market today. Shares hit resistance in their 200-day line. The thinly traded stock cut below its 50-day line last month.
The shares still have a strong 98 composite rating Their EPS rating is 81.
Shipping stock backdrop
Other shipping stocks also have strong ratings, creating hiccups in the flow of goods from factory to port to warehouse and store shelves after the epidemic stopped. Shipping costs have risen as it has become increasingly difficult to find containers and vessels available for backing up container vessels and loading new goods outside the port.
This year, however, the run for many shipping stocks has cooled off higher. Freight rates have eased from recent highs. China’s Kovid lockdown has raised concerns about the country’s export volume. The rise in prices of many products – partly due to global supply-chain backups – has led to more concerns about mild consumer demand.
Shipping operators have also ordered more ships in an effort to board for greater profits at increasing container-freight rates. That expanded fleet could ultimately reduce freight rates, giving some relief to businesses that have had to pay thousands of dollars for a single container shipment. Low rates will threaten profits for shipping stocks.
However, orders for new ships may take years to arrive. In the near future, supply disruptions due to the war in Russia and the resumption of China’s economy could keep pace.
Estimate: Wall Street expects GIM to earn $ 12.57 per share, a 134% jump over a year ago. Revenue estimates from FactSet were unavailable.
After recovering support at its 50-day line on Friday, ZIM stock fell 1.7% to 65.04. The stock has a 97 composite rating and an EPS rating of 80
The Israel-based company leases most of its fleet through suppliers, including Danaos, instead of taking full ownership of the ships. After its debut in January of that year, the stock rose further until 2021.
ZIM, which transports goods across the Atlantic, Pacific, Asia and through the Suez Canal, has expanded its rapid e-commerce shipment service. It has also increased its spending on shipping containers.
Golden Ocean income
Estimate: Wall Street expects Golden Ocean to earn 39 cents per share, a 179% gain. Revenue was expected to increase 61% to $ 192.2 million.
Results: Price Thursday.
Shares rose 3.7% to 15.26 on Tuesday, reaching another record high. GOGL stock, like other shipping stocks here, has a 98 composite rating of Its EPS rating is 80.
Owns and operates dry bulk vessels such as Golden Ocean, iron ore and coal in Bermuda. When the agency reported in February, before the Russian invasion and the most recent round of aggressive Cowid sanctions against China, it said that steel production in the country weighed on slower shipping rates.
However, dry-bulk freightliners did not order new ships at the same rate as in the container-shipping industry, with some analysts saying the cost of complying with engine-emissions requirements.
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