International Seaways Inc. (INSW) Earnings & Analysis

Latest quarter

International Seaways reported Q2 FY2026 revenue of $467.3 million, above the $406.2 million consensus, and adjusted earnings of $5.91 per share, above the $5.28 consensus. Revenue rose from $195.6 million a year earlier, while diluted earnings per share increased from $1.25.

The company’s filing attributed higher time-charter-equivalent revenue primarily to higher average daily rates across its fleet. Crude tanker revenue on that basis rose as rates and profit sharing on VLCC time charters increased; product carrier revenue also rose on higher rates, partly offset by fewer earning days following vessel sales.

International Seaways reported a gross margin of 76.0%, compared with 57.1% a year earlier, and an operating margin of 64.5%, compared with 35.5%. Free cash flow was $214.9 million, up from $95.4 million. CEO Lois Zabrocky also said the company declared a quarterly dividend of $5.05 per share.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Lois Zabrocky said the conflict around the Strait of Hormuz had disrupted seaborne transportation, while attempts to disrupt traffic through Bab-el-Mandeb added uncertainty. She said cargoes seeking alternative routes create longer voyages and support tanker demand. Strategic petroleum reserves, she said, have helped offset supply disruptions and limit their effect on commercial inventories.

Zabrocky described two possible paths: easing disruption could prompt governments to replenish reserves, adding tanker demand, while prolonged disruption could weigh on the global economy and oil consumption. She also said new tanker orders should be considered alongside an aging fleet, with older vessels becoming candidates for removal from commercial service.

CFO Jeffrey Pribor said blended spot earnings were higher than a year earlier and that crude tanker revenue included $51.0 million of time-charter profit sharing. He said the company had begun consolidating the Tankers International Suez entity after launching its Suezmax pool. Although that brings other participants’ revenue and expenses into the accounts, he said it has no meaningful impact on the company’s underlying economics.

Asked about tanker markets, Zabrocky said charterers were substituting between vessel sizes as larger ships moved east, giving LR1 vessels opportunities. On product carriers, she pointed to disrupted Middle East exports and renewed Chinese exports, and said the company was watching the market carefully. In response to a question about LR1s, she said the new vessels would eventually replace older ships as they age out.

For the quarter ahead, Pribor said advance spot fixtures covered only part of expected revenue days and cautioned that reported rates could differ as more voyages are booked. Zabrocky said the company remains committed to returning at least 85% of adjusted net income to shareholders.

Guidance

Zabrocky said International Seaways expects 2 LR1 vessels in the third quarter and has ordered 4 additional LR1 newbuildings for delivery in the second half of 2028. She said the vessels will join an earlier order and replace older units as they age out.