International Seaways (INSW) Q2 EPS Up

Key Points

• Adjusted earnings per share (non-GAAP) beat estimates, reaching $1.02 compared to $0.93 in Q2 2025.

• Revenue (GAAP) declined 24% year over year to $196 million in Q2 2025.

• International Seaways declared a quarterly dividend of $0.77 per share, maintaining a payout ratio of at least 75% of adjusted (non-GAAP) net income.

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International Seaways (NYSE:INSW), an independent tanker company specializing in the transportation of crude oil and petroleum products, released its second quarter 2025 results on August 6, 2025. The company delivered earnings above analyst expectations, posting adjusted (non-GAAP) earnings per share of $1.02 compared to the $0.93 forecast. Revenue (GAAP) was $196 million, down 24% from the prior year. Despite steep year-over-year declines in both revenue and profits, the company maintained robust liquidity, continued its fleet modernization, and declared a sizable quarterly dividend, signaling an ongoing focus on shareholder returns and operational stability.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

International Seaways at a Glance: Business Model and Strategic Focus

International Seaways is a major player in the global marine transportation sector. Its fleet moves crude oil and refined petroleum products across world markets, serving global energy producers and major oil companies. The company operates a mix of vessel types, including Very Large Crude Carriers (VLCCs), Suezmax, and Aframax crude tankers, as well as Long Range 1 (LR1) and Medium Range (MR) product carriers.

In recent years, International Seaways has concentrated on two primary areas: maintaining operational flexibility in chartering strategy and modernizing its fleet. With nearly 86% of its time charter equivalent (TCE) revenues coming from the spot market in 2024, the company can benefit from periods of strong shipping demand but also faces sharper downside when market rates decline. Fleet optimization through targeted asset sales and purchases is another key to success, especially as environmental regulations evolve and customers demand more efficient, modern vessels.

Key Developments and Quarter in Review

The most notable headline from Q2 2025 is the dramatic decrease in both revenue and earnings compared to Q2 2024. Total revenue dropped by 24%, and adjusted earnings per share fell by 57% from the prior year quarter. This weakness is tied directly to softer spot market rates across all major vessel types. In the crude tankers segment, average spot rates for VLCCs pulled back by 15%, while Suezmax and Aframax rates fell 18% and 2.2%, respectively, compared to Q2 2024. Product tankers were hit harder: LR1 day rates slumped 38%, and MR rates declined nearly 46% year over year in Q2 2025.

The company’s reported TCE revenue—a non-GAAP measure that nets out voyage expenses from shipping revenue and offers insight into real earnings power—fell 25% compared to Q2 2024.

Fleet optimization was again in focus this quarter. Management sold two 2007-built MR product carriers for $28 million, net of fees and commissions, and plans to sell four more older vessels in the coming period. At the same time, the company agreed to purchase a 2020-built, scrubber-fitted VLCC for $119 million, which will join the fleet in late 2025. Additionally, International Seaways is building six new LR1 product carriers with dual-fuel, liquefied natural gas (LNG)-ready engines, promising improved environmental performance and operational efficiency. These investments reflect a broader industry shift toward modern, lower-emissions ships in anticipation of stricter environmental standards.

On the capital front, International Seaways’ liquidity remains strong. At the end of Q2 2025, the company held $709 million in available liquidity and maintained a low net loan-to-value ratio of around 14%. In the first half of 2025, the company repaid $117 million in debt, underscoring prudent balance sheet management. The period also brought a new $240 million financing commitment for the LR1 newbuilding program. The company declared a $0.77 per share quarterly dividend for September 2025, consistent with its stated policy of distributing at least 75% of adjusted net income to shareholders. This marks the twenty-third consecutive quarterly dividend and extends a pattern of high shareholder payouts through various market cycles.

Looking Forward: Guidance and Areas to Watch

Management did not provide explicit financial guidance for the third quarter or for the full year. Contracted revenue stands at $261 million for time charters stretching over an average 1.7 years as of July 1, 2025, providing some earnings visibility even as spot market volatility remains a risk.

Investors should monitor several ongoing themes for the rest of the year. The company’s high proportion of spot market exposure means continued earnings volatility if rates fall or stay weak. Fleet renewal and environmental spending add capital obligations, and successful execution on both the financing and operational fronts will be critical, especially with over $300 million in capital expenditures still outstanding on newbuilds as of June 30, 2025.

The company declared a combined dividend of $0.77 per share, consisting of a regular quarterly dividend of $0.12 per share and a supplemental dividend of $0.65 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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