What happened with TK today?
No read yet
Uses news and trading volume to explain the day’s move and how it relates to the market.
Stop guessing. Get the call, a three-month target price, the best and worst cases, and a source for every claim.
Most of Teekay Corporation’s revenue comes from carrying crude oil and refined petroleum products for energy companies, oil traders and other customers through Teekay Tankers. Customers mainly pay for individual voyages at prevailing freight rates; some instead hire vessels for a fixed period at a daily rate. Teekay crews and maintains the vessels under both arrangements, but pays fuel and other voyage costs on voyage contracts, while time-charter customers generally cover those costs.
The tanker business relies heavily on the spot market, so earnings depend on oil shipments, voyage distances and the supply of competing tankers, as well as fuel costs and days available to work. A limited group of customers supplies a significant share of revenue, though no single customer dominates. Sanctions restrict which customers and oil cargoes Teekay can legally serve.
Teekay also transfers crude between ships in the U.S. Gulf, helping customers whose larger tankers cannot enter ports. Its smaller Australian marine-services business earns contract revenue for operating, maintaining and crewing vessels, primarily government-owned ships under long-term contracts with the Commonwealth of Australia.
At the parent-company level, Teekay’s main asset is its controlling shareholding in Teekay Tankers. Cash reaches the parent mainly through dividends from that subsidiary and interest on cash and short-term investments. Those dividends depend on the subsidiary earning profits and being legally and contractually allowed to distribute funds.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Teekay depends on controlled subsidiary Teekay Tankers Ltd. for tanker earnings and cash distributions that support the parent's value and shareholder payouts; the subsidiary earns freight and hire from energy companies, oil traders and governments. Watch its spot-market tanker earnings and ability to send profits to the parent, not just its reported profit.
Frontline Plc competes with Teekay for crude-oil and refined-product cargoes carried by Suezmax and LR2/Aframax tankers, earning freight and hire from major oil companies and large oil traders. Watch the rates it earns on these ships rather than treating its larger VLCC business as a direct match for Teekay.
International Seaways, Inc. competes with Teekay to carry customers' crude oil and refined products in Suezmax, Aframax and product tankers, charging either per voyage at market rates or fixed daily hire for a contract period. Its spot-voyage rates offer a closer read on Teekay's market exposure than revenue protected by fixed-rate contracts.
Nordic American Tanker competes directly with Teekay's Suezmax vessels for customers' crude-oil shipments under spot and spot-linked contracts. Its fleet consists entirely of Suezmax crude tankers, so revenue after voyage expenses per operating day provides a focused check on this part of Teekay's business.
Okeanis Eco Tankers Corp. and Teekay compete for customers' crude-oil cargoes in Suezmax tankers, with substantial exposure to spot rates. Okeanis mainly charges for individual voyages and pays fuel, port and canal costs itself, so watch whether higher freight rates translate into better voyage margins.
Tsakos Energy Navigation Ltd. and Teekay seek charter business from oil companies and refiners in the global tanker market. Tsakos supplies ships under short-, medium- and long-term contracts; watch the rates on new charters for these customers as a sign of the pricing conditions Teekay faces.
Performance Shipping Inc. competes directly with Teekay's core fleet to supply Aframax and Suezmax tankers for customers' oil shipments. It earns both voyage freight and contract hire, so separate its spot business from longer-term fixed hire when using its results to judge Teekay's charter market.
DHT HOLDINGS, INC. shares Teekay's crude-tanker freight cycle: customers pay both to move crude oil, but DHT uses VLCCs while Teekay mainly uses Suezmax and Aframax vessels. Watch DHT's spot-market rates for a broader crude-shipping signal, not a like-for-like rate comparison with Teekay's smaller ships.
Scorpio Tankers Inc. competes with Teekay's LR2 vessels for customers' refined-petroleum cargoes, earning revenue by shipping these products worldwide. Its LR2 business is the relevant comparison for Teekay, rather than its smaller MR and Handymax product tankers.
Hafnia Limited and Teekay compete to transport petroleum products for oil companies and traders. Hafnia collects freight per voyage or cargo ton and hire under period contracts; watch its product-shipping rates rather than its chemical business when assessing the market for Teekay's product tankers.
TORM plc competes with Teekay's LR2 tankers to carry customers' refined-petroleum cargoes, including gasoline and jet fuel. TORM's tanker business operates mainly at spot rates, making its LR2 freight earnings a useful check on Teekay's product-shipping market.
ARDMORE SHIPPING CORPORATION shares petroleum-shipping demand with Teekay's LR2 vessels, but its product and chemical tankers carry smaller cargoes for customers. Ardmore mainly earns freight in the spot market; its clean-product trading results can inform the demand picture without being a direct comparison for Teekay's larger vessels.
EIA Crude Oil Stocks Change (Oct/16)
For Teekay, U.S. crude and gasoline stock reports show how much oil and fuel is held in storage, helping indicate whether oil companies and traders may need its Gulf lightering and tanker-voyage services to move crude.
A sustained stock build can signal weaker near-term crude movement, potentially reducing demand for Teekay’s U.S. Gulf lightering and tanker voyages; a sustained draw can signal stronger movement and support demand, though stocks alone do not determine shipping activity.
Teekay Corporation Ltd. earningsThis company
Teekay earns most of its revenue from tanker voyages, and this report will show how spot freight rates and vessel use flow through to earnings and cash.
Read tanker TCE per revenue day—net revenue after voyage expenses—alongside operating cash flow. Higher TCE with stronger cash flow would show that better rates or vessel use are lifting voyage earnings and cash generation; declines in both would show spot-market pressure still weakening Teekay’s main earnings and cash source.
Teekay Tankers Ltd. earningsTNK
Teekay Tankers anchors Teekay’s tanker business, and its report will show whether tanker earnings and cash can keep supporting the parent’s income and shareholder distributions.
Read tanker TCE—net revenue per revenue day after voyage expenses—alongside operating cash flow, then note how much cash is distributed to Teekay. Strong TCE and cash generation with ample distributions would show the tanker business is producing both earnings and funds for the parent; weaker TCE or cash flow, or smaller distributions, would constrain Teekay’s main income and shareholder-payout channel.
