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Golden Ocean (GOGL) will publish its first quarter results: what does it hold for us?

Golden Ocean Group GOGL is expected to release its first quarter 2022 results on May 19.

The Zacks consensus estimate for first-quarter earnings has been flat at 35 cents for the past 60 days. The revenue consensus mark is currently set at $192.7 million.

Against this backdrop, let’s discuss the factors that may have impacted Golden Ocean’s performance in the March quarter.

We expect GOGL’s performance in the first quarter to have been driven by the gradual recovery in economic activity. This, in turn, could have boosted its revenue from the figure reported a year ago despite Omicron-induced woes early in the quarter.

The optimism surrounding the dry bulk market likely boosted Golden Ocean’s revenue in the quarter ahead. Revenues are expected to have increased due to favorable freight rates for Drybulk. Efforts to expand the size of its fleet also point to a growing demand scenario.

However, we expect GOGL’s first quarter net results to have been impacted by escalating time charter and travel costs. In addition, the high price of oil is driving up fuel costs. This, in turn, is likely to have pushed up operating costs in the quarter ahead.

What does the Zacks model say?

Our proven model does not conclusively predict an earnings beat for Golden Ocean this time around. The combination of a positive Earnings ESP and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating Earnings. However, this is not the case here, as explained below. You can see the full list of today’s Zacks #1 Rank stocks here.

ESP Earnings: Golden Ocean has a gain ESP of 0.00% as the most accurate estimate is in line with Zacks consensus estimate of 35 cents. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

Zack’s Ranking: Golden Ocean currently wears a Zacks Rank #3.

Fourth Quarter Results Highlights

Golden Ocean’s fourth-quarter 2021 earnings (excluding a few cents of one-time items) of 99 cents per share beat Zacks’ consensus estimate of 75 cents. Total revenue of $312.9 million topped Zacks’ consensus estimate of $284.3 million.

Actions to Consider

Investors interested in the broader transport sector may consider Ryanair Holdings (RYAAY) and star bulk carriers SBLK because these stocks have the right combination of elements to beat on earnings this reporting cycle.

Ryanair has an ESP on earnings of +2.70% and a Zacks #3 rating. RYAAY will announce results for the fourth quarter of fiscal 2022 on May 16.

Improving air travel demand serves RYAAY well. However, high fuel costs are weighing on Ryanair’s results.

Star Bulk Carriers has an earnings ESP of +1.77% and a #2 Zacks rank. SBLK will announce its first quarter 2022 results on May 24.

Improving travel demand likely boosted Star Bulk’s travel revenue in the March quarter. Continued fleet expansion initiatives should also have contributed to SBLK’s performance in the quarter ahead. However, high fuel costs have likely strained SBLK’s bottom line.

Stay on top of upcoming earnings announcements with Zacks Earnings Calendar.

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Golden Ocean Group Limited (GOGL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.