US analyst reduces Q3 estimates for shippers

22 October 2008 23:23  [Source: ICIS news]

HOUSTON (ICIS news)--With tanker charter rates in decline, a US maritime analyst on Wednesday cut his third-quarter earnings/share (EPS) estimates for shippers.

Douglas Mavrinac, maritime group head at Jefferies in Houston reduced EPS estimates for 10 of the 11 tanker firms he covers, attributing the move to an OPEC production cut and new vessel deliveries that reduced charter rates.

Teekay took the biggest hit, with Mavrinac cutting his EPS estimate for the Canadian shipper by almost 43%, to $1.13 (€0.86) from $1.97. His estimate for Overseas Shipholding Group dropped 22% to $3.50 from $4.49.

Mavrinac said he expects products-tanker demand to wane in the near term as US Gulf coast refineries return to full capacity following hurricanes Ike and Gustav.

He added that the end of the year should see fewer naphtha cargoes from the Middle East because refinery utilisation there usually drops at year end.

"Consequently, we believe refined-products tanker demand growth in 2009 is likely to fall short of the historical 6-7% growth experienced in recent years," Mavrinac said.

Mavrinac said he was "more or less" maintaining his fourth-quarter and 2009 EPS estimates for the shippers, though another OPEC cut and further dips in crude demand could bring dramatic changes.

($1 = €0.76)

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By: Lane Kelley
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