International Seaways posts record Q2 profits on strong tanker rates

International Seaways reported second-quarter 2026 earnings of $5.91 per share, beating the Zacks consensus estimate of $5.28 by nearly 12%. This performance marks a substantial year-over-year increase from $1.25 per share in the same period last year, driven primarily by strengthened tanker rates across the fleet. The company’s shipping revenues surged 138.8% to $467.3 million, exceeding the $406 million consensus by 15% due to higher spot earnings and improved profit-sharing from time charters.

The operational strength translated into a record net income of $295 million, up from $61.6 million in the prior-year quarter. Consolidated time charter equivalent revenues climbed to $434 million from $189 million, while the blended average spot rate advanced to approximately $79,000 per day from $27,500. Adjusted EBITDA also reached a record $345 million, reflecting the favorable rate environment and additional profit-sharing income. According to GN markets/earnings (en-US), these results have contributed to a 16.6% increase in the company's share price since the last report.

Crude and product segments drive revenue growth

The crude tanker division led the performance, with revenues increasing to $285 million from $104 million a year earlier. Segment TCE revenues advanced to $253 million, supported by average spot earnings exceeding $64,500 per day. Specific vessel classes saw significant rate improvements, with VLCC earnings averaging $118,900 per day and Suezmaxes earning $100,500 per day. These gains more than offset fewer revenue days resulting from vessel sales and increased VLCC off-hire time.

The product carrier segment also saw substantial growth, with revenues rising to $182 million from $92 million in the prior-year quarter. TCE revenues increased to $181 million, driven by average spot earnings of approximately $42,600 per day across the fleet. LR1 vessels averaged $79,200 per day in spot earnings, while MRs averaged $60,300. The company noted that rate-driven gains were partly tempered by fewer MR revenue days following the sale of older vessels as part of its fleet renewal strategy.

Fleet optimization expands capital investment

International Seaways continued its fleet optimization program by contracting four additional scrubber-fitted, dual-fuel-ready LR1 newbuildings for a total of $244 million. These vessels are expected for delivery in the second half of 2028 and will join the Panamax International Pool. The company also took delivery of the Seaways Cristobal in Q2, the fourth vessel in its original six-LR1 program, with the remaining two expected to arrive in Q3 2026. As of July 1, the company had 13 vessels on time charters with approximately $240 million in contracted revenues through expiry, excluding profit-sharing provisions.

Third quarter bookings show sustained demand

Looking ahead, management provided a positive outlook for the third quarter. As of July 30, 48% of projected spot revenue days were booked at a blended average rate of approximately $61,000 per day. Booked spot rates remain strong, with VLCCs at $118,300 per day and Suezmaxes at $91,800 per day. The company expects third-quarter vessel expenses to range between $61 million and $66 million, with general and administrative expenses estimated at $16 million to $17 million. Interest expense is projected at $11 million to $12 million, and depreciation at $40 million to $42 million.