KNOP to Report Q2 Earnings: What's in Store for the Stock?

Company Overview - KNOT Offshore Partners LP (KNOP) is set to report its second-quarter 2024 results on September 4 before market open, with a Zacks Consensus Estimate for loss per unit remaining stable at 13 cents and revenues expected to decline 5.4% year over year to $69.8 million [1] Performance Expectations - The partnership's June-quarter performance is anticipated to reflect positive trends in the tanker market, with product tanker rates at healthy levels despite minor disruptions [2] - The normalization of economic activities and an increase in world trade following the lifting of COVID-19 restrictions are expected to enhance KNOP's top-line performance [2] Market Challenges - Recent attacks by Yemen's Houthi militants on vessels in the Red Sea have disrupted maritime trade, causing many shipping companies to halt transit through this route [3] - To ensure crew safety, KNOP is opting for a longer and more expensive route around the Cape of Good Hope instead of the Suez Canal, leading to increased freight rates due to reduced container availability [4] Cost Implications - While lower capacity is likely to have positively impacted the bottom line, rising oil prices and supply-chain issues are expected to have increased costs, potentially limiting bottom-line growth in the upcoming quarter [4] Earnings Prediction Model - The Zacks model does not predict a definitive earnings beat for KNOP this time, as the combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) does not increase the likelihood of exceeding estimates [5][6]