The 2nd quarter earnings for Overseas Shipholding Group OSG are a wake-up call for the tanker group. Net income for the 2nd quarter was a loss of 33¢ per share compared to a $2.81 a year earlier. Spot VLCC TCE rates fell from $98k per day to $32k, knocking almost $140 million or 35% out of revenues.
OSG is financially in excellent shape and the market has responded to the earnings today by driving the share price up 4%. This report is a wake up call on how weak the rates in the tanker business currently are and I do not see much chance of improvement in the next 6 months. I am surprised how well the shares of tanker stocks are holding up. The tanker group as I track them is up 7% YTD and OSG is down only 12%. I would expect a pull back in tanker stock prices if the current rate environment holds.
Overseas Shipholding Group quarterly earnings
http://ir.osg.com/2009Q2earnings
The 2nd quarter earnings for Overseas Shipholding Group OSG are a wake-up call for the tanker group. Net income for the 2nd quarter was a loss of 33¢ per share compared to a $2.81 a year earlier. Spot VLCC TCE rates fell from $98k per day to $32k, knocking almost $140 million or 35% out of revenues.
OSG is financially in excellent shape and the market has responded to the earnings today by driving the share price up 4%. This report is a wake up call on how weak the rates in the tanker business currently are and I do not see much chance of improvement in the next 6 months. I am surprised how well the shares of tanker stocks are holding up. The tanker group as I track them is up 7% YTD and OSG is down only 12%. I would expect a pull back in tanker stock prices if the current rate environment holds.