Update: Seaspan Earnings

| About: Seaspan Corporation (SSW)


The company managed to miss on both the top and bottom lines for 2Q.

We’re still bullish long-term for the company given its solid dividend yield and advantageous strategy for tapping the current financing markets.

The recent quarterly miss (that we didn’t see coming) is a minor setback in the company’s long-term plan.

Seaspan (NYSE:SSW) posted 2Q earnings that came in at $0.19 a share (below $0.21 consensus estimates) and revenues were $174 million (marginally missing consensus). Its revenue was hurt by three vessels that were on short-term contracts for 2Q. Even still, revenues were up 2.7% y/y.

Shares are essentially flat since we first covered Seaspan back in September, but the dividend yield broke 6% this year, just as we expected. As we noted back then,

With its top notch ability to source capital, SSW should be able to take advantage of some great pricing. Where the real benefit to its access to financing is that SSW can take advantage of decade low newbuild prices. Currently, newbuild prices are at cyclical lows and should allow SSW to upgrade to modern fuel-efficient vessels on the cheap.

During 2Q, the company managed to complete a $345 million notes offering. This is key to its newbuild program, which is targeted at increasing the size of its fleet, ultimately driving earnings higher over the interim. It also accepted two vessels during 2Q, putting its fleet total to 74 vessels. That's above the 71 the company had at the start of the year.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.