Frontline Ltd.’s (FRO) first-quarter earnings fell 53% on a double-digit drop in revenue as the company said demand in the tanker market continues to lag supply.
But the results topped estimates, and the company, which recently undertook a restructuring effort, said it expects its second-quarter results to be better than the first.
Shares were up 4.4% in premarket trading to $5.20. Through Thursday’s close, the stock was up 16% so far this year.
The company, which owns and operates oil tankers, added that it won’t be paying out a dividend in the first quarter.
Frontline completed a restructuring of its business late last year, selling 15 of its wholly-owned special-purpose companies to create a new company, Frontline 2012 Ltd., which it will manage through a subsidiary. Following the restructuring, the company reduced its operating fleet to 48 vessels from 58 vessels.
Frontline reported a first-quarter profit of $7.18 million, or 9 cents a basic share, down from $15.5 million, or 20 cents a share, a year earlier. The latest quarter included a loss of $2.2 million on the sale of a double hull tanker and a $9.4 million gain from the termination of the charter party for a single hull carrier.
Operating revenue dropped 29% to $167.3 million, while operating expenses fell 26%.
Analysts surveyed by Thomson Reuters had seen a loss of 10 cents on revenue of $91 million.
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