Teekay Earnings: Here’s Why Investors Don’t Like These Results

Teekay Corporation (NYSE:TK) had a loss and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 2.94%.

Teekay Corporation Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-0.47 in the quarter versus EPS of $-0.25 in the year-earlier quarter.

Revenue: Decreased 10.63% to $430.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Teekay Corporation reported adjusted EPS loss of $0.47 per share. By that measure, the company missed the mean analyst estimate of $-0.26. It beat the average revenue estimate of $418.34 million.

Quoting Management: “The second quarter of 2013 was a challenging operational quarter for our FPSO segment due to near-term production issues which negatively impacted revenue contribution from the Voyageur Spirit and Foinaven FPSO units,” commented Peter Evensen, Teekay Corporation’s President and Chief Executive Officer. “On both units, production was reduced by issues related to the gas compressors. Resolving these issues has been a top priority and our FPSO operations teams have been working diligently to get these units back into full production as soon as possible. As part of the Voyageur Spirit sale and purchase agreement, Teekay Parent has agreed to indemnify Teekay Offshore due to the delayed acceptance by the charterer. Although the Voyageur Spirit off-hire has resulted in a reduction of approximately $0.05 per share to Teekay Corporation’s second quarter adjusted earnings, the indemnification itself will be effectively treated as a reduction to the $540 million sales price to Teekay Offshore and will not impact Teekay Corporation’s earnings or operating cash flows. The $540 million sales price paid by Teekay Offshore was approximately $75 million higher than Teekay Parent’s cost to acquire and upgrade this unit. Since April 13, 2013, the Voyageur Spirit FPSO has been operating at partial production levels and is expected to reach full capacity levels by the end of August 2013, following the completion of repairs and testing.”

Key Stats (on next page)…

Revenue decreased 4.51% from $451.04 million in the previous quarter. EPS decreased to $-0.47 in the quarter versus EPS of $-0.17 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a loss of $0.09 to a loss $0.10. For the current year, the average estimate has moved down from a loss of $0.13 to a loss of $0.14 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)