Nordic American Tanker (nyse:NAT) exceeded earnings expectations, beating the market's estimate of $1.22 a share by 2 cents, coming in at $1.24 a share for the third quarter.
Earnings for the quarter surged to $42.7 million, in sharp contrast to the $1.2 million loss, or 4 cents a share suffered in the third quarter of 2007.
The success of the company for the quarter is because of their Suezmax tankers, which far outperformed expectations on the spot market, bringing in a day rate average of $68,362 a vessel, far above the expected average of $64,000 a vessel.
Suezmax tankers refers to the largest vessels able to travel through the Suez canal.
While the spot market offers risk to the company, it has been very good to Nordic recently, and according to company executives, is still outperforming in the fourth quarter.
Rates for the fourth quarter per vessel are over $55,000 on average, and trading at $65,000 a day. This is far above the $40,000 some analysts are looking for during the current quarter.
Some analaysts are looking for $37,000 for Suezmaxes for 2009. If that were to come about, it would put downward pressure on Nordic, as eleven out of twelve of their Suezmax vessels cater to the spot market. Only one is on a long-term fixed rate charter.
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