SFL (NYSE:SFL) Posts Earnings Results, Beats Expectations By $0.12 EPS

Key Points

• SFL reported EPS of $0.26, beating the $0.14 consensus by $0.12, while revenue of $201.58 million exceeded estimates and rose 13.4% year over year.
• The company’s charter backlog reached approximately $5 billion, boosted by new long-term agreements, including a seven-year extension for six Hapag-Lloyd ships that adds about $750 million.
• SFL expects the sale of seven tankers to generate roughly $275 million in net cash proceeds and a $175 million book gain; shares nevertheless fell 5.8% on Wednesday. The company also declared a $0.22 quarterly dividend.

SFL (NYSE:SFL - Get Free Report) announced its quarterly earnings results on Wednesday. The shipping company reported $0.26 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.14 by $0.12, FiscalAI reports. SFL had a net margin of 8.76% and a return on equity of 3.41%. The business had revenue of $201.58 million during the quarter, compared to the consensus estimate of $179.97 million. During the same quarter last year, the firm earned $0.07 EPS. The business's revenue was up 13.4% compared to the same quarter last year.

Here are the key takeaways from SFL's conference call:

• Charter backlog reached approximately $5 billion, up more than $1.6 billion this year; management said about 58% is with investment-grade counterparties, with a substantial additional share tied to a customer one notch below investment grade.
• New long-term agreements added significant future revenue visibility, including a seven-year extension for six Hapag-Lloyd container ships that adds about $750 million to backlog, plus charters for new container and ammonia vessels.
• Third-quarter revenue was $202 million and net income was $37 million, or $0.26 per share; adjusted EBITDA fell to $122 million from $130 million in the prior quarter, while the company declared its 91st consecutive quarterly dividend of $0.22 per share.
• The agreed sale of seven tankers is expected to generate about $275 million in net cash proceeds and a roughly $175 million book gain as the vessels are delivered. One Suezmax remains in the spot market, offering potential upside but exposing results to volatile rates and voyage-revenue timing.
• Remaining newbuilding commitments total approximately $1.7 billion, while quarter-end cash and undrawn facilities provided more than $270 million of liquidity; management expects to fund the commitments mainly with credit facilities, and Hercules preparation is also contributing to elevated expenses.

SFL Trading Down 5.8%

Shares of SFL stock traded down $0.72 on Wednesday, hitting $11.61. The stock had a trading volume of 1,491,050 shares, compared to its average volume of 1,471,188. The company's 50 day moving average price is $12.86 and its 200-day moving average price is $11.42. SFL has a 1 year low of $7.34 and a 1 year high of $13.98. The company has a debt-to-equity ratio of 1.75, a current ratio of 0.38 and a quick ratio of 0.38. The firm has a market capitalization of $1.68 billion, a P/E ratio of 24.15 and a beta of 0.48.

SFL Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, September 22nd. Investors of record on Wednesday, September 9th were issued a $0.22 dividend. This represents a $0.88 annualized dividend and a dividend yield of 7.6%. The ex-dividend date was Wednesday, September 9th. SFL's payout ratio is currently 183.33%.

Analyst Ratings Changes

Several equities research analysts have issued reports on SFL shares. Benchmark reissued a "buy" rating on shares of SFL in a research note on Wednesday, August 26th. Wall Street Zen raised SFL from a "hold" rating to a "buy" rating in a research note on Saturday, August 22nd. Weiss Ratings upgraded SFL from a "hold (c)" rating to a "hold (c+)" rating in a report on Thursday, August 27th. Finally, BTIG Research reissued a "buy" rating and set a $14.00 price objective on shares of SFL in a research report on Wednesday, August 26th. Two investment analysts have rated the stock with a Buy rating and one has issued a Hold rating to the stock. According to data from MarketBeat, SFL currently has an average rating of "Moderate Buy" and a consensus price target of $14.00.

SFL Company Profile

SFL Corporation Ltd. is a maritime and offshore asset-owning company headquartered in Hamilton, Bermuda, and listed on the New York Stock Exchange under the symbol SFL. Formerly known as Ship Finance International Limited, the company was established in 2003 and has developed a diversified portfolio of vessels and offshore assets.

The company primarily acquires, owns and leases assets under long-term charter and lease agreements. Its portfolio has included crude oil and product tankers, dry bulk carriers, container ships, car carriers, offshore drilling units and other specialized maritime assets.

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