Torm (NASDAQ:TRMD) Issues Quarterly Earnings Results, Beats Expectations By $0.36 EPS

Torm (NASDAQ:TRMD) posted its earnings results on Wednesday. The company reported $1.91 earnings per share for the quarter, topping analysts’ consensus estimates of $1.55 by $0.36, Zacks reports. Torm had a net margin of 35.51% and a return on equity of 27.24%. The firm had revenue of $499.40 million for the quarter, compared to analyst estimates of $330.95 million.

Here are the key takeaways from Torm’s conference call:

• Q3 earnings rose substantially year over year: TCE earnings were $353 million, EBITDA was $274 million and net profit was $199 million. Average fleet TCE was about $40,100 per day, though earnings were lower than in the exceptional second quarter.
• TORM raised the low end of its full-year guidance by $50 million: It now expects TCE earnings of $1.75 billion–$1.9 billion and EBITDA of $1.35 billion–$1.5 billion, citing strong Q4 coverage and market expectations.
• Management sees supportive tanker-market fundamentals: Q4 bookings included rates of about $78,000 per day across vessel classes, while the company said the fleet actively trading clean products had contracted roughly 4% year to date despite growth in the nominal fleet. It also pointed to potential demand from inventory rebuilding.
• Shareholders will receive a $1.35-per-share interim dividend, totaling $138 million, at a 78% payout ratio. TORM reported a 25.9% net loan-to-value ratio, which management said already includes committed newbuilding investments.
• Fleet investment commitments are substantial: The company cited about $650 million of committed newbuilding CapEx and plans for additional MR and LR2 vessels. Management also emphasized that shipping is cyclical and freight-market conditions can change quickly.

Torm Trading Down 6.7%

Shares of Torm stock traded down $2.71 during midday trading on Wednesday, reaching $37.55. The company had a trading volume of 2,122,917 shares, compared to its average volume of 1,034,330. The stock has a fifty day moving average price of $37.21 and a 200 day moving average price of $30.75. The company has a debt-to-equity ratio of 0.33, a current ratio of 2.27 and a quick ratio of 1.97. The firm has a market cap of $3.83 billion, a PE ratio of 6.19 and a beta of 0.05. Torm has a fifty-two week low of $19.30 and a fifty-two week high of $43.31.

Torm Increases Dividend

The business also recently disclosed a quarterly dividend, which was paid on Thursday, September 24th. Investors of record on Thursday, September 10th were paid a $2.40 dividend. This is an increase from Torm’s previous quarterly dividend of $0.70. This represents a $9.60 dividend on an annualized basis and a dividend yield of 25.6%. The ex-dividend date of this dividend was Thursday, September 10th. Torm’s payout ratio is presently 115.49%.

Analyst Ratings Changes

Several research firms have recently issued reports on TRMD. Evercore reaffirmed an “outperform” rating on shares of Torm in a research note on Tuesday, October 27th. Wall Street Zen upgraded shares of Torm from a “buy” rating to a “strong-buy” rating in a report on Saturday, September 19th. Finally, Weiss Ratings upgraded Torm from a “hold (c+)” rating to a “buy (b-)” rating in a report on Friday, October 9th. One analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating and one has issued a Hold rating to the stock. According to data from MarketBeat, the company presently has an average rating of “Buy” and an average price target of $38.00.

Insiders Place Their Bets

In other Torm news, CFO Kim Balle sold 7,533 shares of the stock in a transaction that occurred on Tuesday, September 22nd. The shares were sold at an average price of $36.35, for a total transaction of $273,824.55. Following the completion of the sale, the chief financial officer owned 510 shares of the company’s stock, valued at approximately $18,538.50. This represents a 93.66% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Over the last three months, insiders have sold 42,533 shares of company stock worth $1,643,225. Corporate insiders own 0.37% of the company’s stock.

Torm Company Profile

TORM plc is a maritime transportation company that owns and operates a fleet of product tankers. The company primarily transports refined petroleum products, including gasoline, diesel, jet fuel and naphtha, connecting refineries, storage facilities and distribution markets around the world.

TORM’s fleet serves the global clean-product tanker market and includes vessels in several size categories, such as long-range and medium-range tankers. Its vessels operate on international trade routes, supporting the movement of energy products between major production and consumption regions.

Founded in Denmark in 1889, TORM has grown into an international shipping company headquartered in Copenhagen.