Tanking company Scorpio Tankers (NYSE: STNG) announced better-than-expected revenue in Q4 CY2025, with sales up 31.5% year on year to $252.7 million. Its GAAP profit of $2.59 per share was 55.8% above analysts’ consensus estimates.

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Company Overview

Operating one of the youngest fleets in the industry, Scorpio Tankers (NYSE: STNG) is an international provider of marine transportation services, specializing in the shipment of refined petroleum.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Scorpio Tankers struggled to consistently increase demand as its $912.5 million of sales for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and suggests it’s a lower quality business.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Scorpio Tankers’s recent performance shows its demand remained suppressed as its revenue has declined by 17.1% annually over the last two years.

We can dig further into the company’s revenue dynamics by analyzing its number of total vessels, which reached 96.5 in the latest quarter. Over the last two years, Scorpio Tankers’s total vessels averaged 6.4% year-on-year declines. Because this number is higher than its revenue growth during the same period, we can see the company’s monetization has fallen.

This quarter, Scorpio Tankers reported wonderful year-on-year revenue growth of 31.5%, and its $252.7 million of revenue exceeded Wall Street’s estimates by 10.8%.

Looking ahead, sell-side analysts expect revenue to decline by 4.3% over the next 12 months. Although this projection is better than its two-year trend, it’s tough to feel optimistic about a company facing demand difficulties.

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Operating Margin

Scorpio Tankers has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 46.4%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, Scorpio Tankers’s operating margin rose by 55.8 percentage points over the last five years. Its expansion was impressive, especially when considering most Marine Transportation peers saw their margins plummet.

In Q4, Scorpio Tankers generated an operating margin profit margin of 52.7%, up 3.3 percentage points year on year. The increase was a welcome development and shows its expenses recently grew slower than its revenue, leading to higher efficiency.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Scorpio Tankers’s EPS grew at an astounding 39.9% compounded annual growth rate over the last five years, higher than its flat revenue. This tells us management responded to softer demand by adapting its cost structure.

We can take a deeper look into Scorpio Tankers’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Scorpio Tankers’s operating margin expanded by 55.8 percentage points over the last five years. On top of that, its share count shrank by 8.9%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Scorpio Tankers, its two-year annual EPS declines of 15.7% mark a reversal from its (seemingly) healthy five-year trend. We hope Scorpio Tankers can return to earnings growth in the future.

In Q4, Scorpio Tankers reported EPS of $2.59, up from $1.43 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Scorpio Tankers’s full-year EPS of $7.07 to shrink by 17.6%.

Key Takeaways from Scorpio Tankers’s Q4 Results

It was good to see Scorpio Tankers beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. Investors were likely hoping for more, and shares traded down 1.7% to $68.68 immediately following the results.

Is Scorpio Tankers an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).