Earnings call transcript: Costamare Inc. Q2 2025 beats EPS expectations

Costamare Inc. (CMRE) reported its second-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.77, significantly higher than the forecasted $0.58. Despite this positive EPS surprise, the company’s revenue of $217.89 million fell short of the $341.48 million forecast. Following the earnings announcement, Costamare’s stock surged 7.64% in pre-market trading, reflecting investor optimism. According to InvestingPro analysis, the company trades at an attractive P/E ratio of 4.26 and appears undervalued based on its Fair Value assessment. With a market capitalization of $1.35 billion, CMRE maintains a "GREAT" overall financial health score of 3.45 out of 5.

Key Takeaways

• Costamare reported a strong EPS of $0.77, beating forecasts by 32.76%.
• Revenue came in below expectations, with a 36.19% shortfall.
• Stock price rose 7.64% in pre-market trading.
• The company completed the spin-off of Costa Maria Parques.
• Strategic focus remains on container shipping with potential for future investments.

Company Performance

Costamare Inc. demonstrated robust financial performance in the second quarter of 2025, with a net income of $99 million, equivalent to $0.83 per share. The company’s adjusted net income was $92 million, or $0.77 per share. Despite falling short on revenue expectations, Costamare’s strong EPS performance indicates effective cost management and operational efficiency. The company maintains a liquidity position of over $500 million and has total contracted revenues of $2.5 billion, with a remaining time charter duration averaging 3.2 years. InvestingPro data reveals the company has maintained dividend payments for 15 consecutive years, with a current dividend yield of 4.11%. Subscribers can access 10+ additional ProTips and comprehensive financial metrics through the Pro Research Report.

Financial Highlights

• Revenue: $217.89 million (shortfall of 36.19% from forecast)
• Earnings per share: $0.77 (beat forecast by 32.76%)
• Net Income: $99 million
• Adjusted Net Income: $92 million
• Liquidity: Over $500 million

Earnings vs. Forecast

Costamare’s EPS of $0.77 significantly exceeded the forecast of $0.58, marking a 32.76% positive surprise. However, revenue was $217.89 million, falling short of the $341.48 million projection by 36.19%. This mixed performance highlights the company’s ability to maintain profitability despite revenue challenges.

Market Reaction

Following the earnings announcement, Costamare’s stock experienced a 7.64% increase in pre-market trading, rising from $9.55 to $10.28. This positive market reaction reflects investor confidence in the company’s strong EPS performance and strategic initiatives. The stock’s movement is notable given its 52-week range, with a low of $6.63 and a high of $15.96. Year-to-date, CMRE has delivered an impressive total return of 21.61%, according to InvestingPro data. The platform’s analysis indicates strong momentum, with the stock showing robust returns over multiple timeframes.

Outlook & Guidance

Looking ahead, Costamare has not announced any major debt maturities until 2027, allowing for a selective investment strategy focused on container shipping. The company is open to new vessel acquisitions if financially attractive opportunities arise. Future EPS forecasts suggest stability, with projections of $0.7 for the upcoming quarters and $2.88 for fiscal year 2025.

Executive Commentary

Gregory Zikos, CFO of Costamare, emphasized the company’s cautious approach to investments, stating, "We didn’t put any new bidding orders in containers during COVID or after COVID simply because we found asset prices to be extremely high." He also highlighted the company’s strong charter coverage and low leverage position, reinforcing Costamare’s competitive edge.

Risks and Challenges

• Revenue shortfalls could impact future profitability.
• Market saturation in the shipping industry may limit growth.
• Macroeconomic pressures, such as changes in global trade policies, could affect operations.
• Potential supply chain disruptions due to geopolitical tensions.
• Fluctuating charter rates could impact revenue stability.

Q&A

During the earnings call, analysts inquired about the company’s strategic direction following the spin-off of Costa Maria Parques. Executives confirmed there would be no strategic shift, maintaining a consistent investment approach since 2010. Additionally, the progress of Neptune Maritime Leasing was discussed, with 90% of initial capital committed, indicating steady advancement.

Overall, Costamare Inc.’s second-quarter performance reflects its ability to navigate revenue challenges while maintaining strong profitability, supported by a strategic focus on container shipping and prudent financial management.

Full transcript - Costamare Inc (CMRE) Q2 2025:

Conference Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Costa Amare Inc. Conference call on the Second Quarter twenty twenty five financial results. We have with us Mr. Gregory Zikos, Chief Financial Officer of the company. At this time, all participants are in a listen only mode.

There will be a presentation followed by a question and answer session. At which time, if you wish to ask a question question, please press the star key followed by zero on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded today, Thursday, 07/31/2025. We would like to remind you that this conference call contains forward looking statements. Please take a moment to read slide number two of the presentation, which contains the forward looking statements.

And I will now pass the floor to your speaker today, mister Zikos. Please go ahead, sir.

Gregory Zikos, Chief Financial Officer, Costa Amare Inc.: Thank you, and good morning, ladies and gentlemen. During the second quarter of the year, the company generated net income of about $99,000,000 In May, we have successfully completed the spin off of Costa Maria Parques, which encompasses the own drybulk fleet as well as the CPI operating platform. Costa Mara Inc. Remains a sole shareholder of the 68 container ships as well as the controlling shareholder of Neptune Maritime Bleaching. In July, we ordered four new British container ships from a Chinese shipyard, each one of approximately 3,100 TEU capacity.

The vessels are expected to be delivered between the 2027. Upon delivery, they will commence an eight year time charter with a first class liner company. At the same time, we chartered two six thousand five hundred TEU containerships for a three year period and on a forward basis commencing from Q1 and Q2 twenty twenty six. The above transactions resulted in an increase in contracted revenues of about $610,000,000 Our fleet deployments are 10075% for 2025 and ’twenty six, respectively. Total contracted revenues amount to $2,500,000,000 with the remaining times at a duration of about three point two years.

Regarding the market, with less than 1% of the fleet being commercially idle, the contingency fleet can be considered as fully employed. Current load fixing activity is mainly the result of low availability of home donuts rather than lack of demand. Charter rates remain changing across the board and the social supply keeps rates at robust levels. Finally, with regard to Neptune maritime leasing, the growing Uniti platform, 47 shipping assets have been funded or committed and total commitments and divestments are exceeding $650,000,000 Moving now to the slide presentation. On Slide three, you can see our quarter results.

Net income for the quarter was $99,000,000 or $0.83 per share. Adjusted net income was around 92,000,000 or 77¢ per share. Our liquidity is at above half a billion dollars. Slide four. We have concluded new bidding contracts for 40,100 TEU containerships with expected deliveries between q two and q four two thousand twenty seven.

Upon delivery, each vessel will commence an eight year charter with a leading liner company. On the employment side, we have four or six two container ships, which along with the previously mentioned eight year charters have incremental contracted revenues of more than 310,000,000. In addition, as already mentioned, our revenue date of 600% for ’20 five and seventy five percent for ’26, while our contracted revenues are $2,500,000,000 with the remaining time charter duration on a TEU weighted basis of three point two years. Slide five. Regarding our financing arrangements, we have agreed to refinance six containerships with no increased leverage.

We have no major maturities up until 2027. Slide six. On our leasing platform, we have invested around $180,000,000 Neptune Maritime Leasing has funded or committed to fund for the seven shipping assets for a total amount of more than $650,000,000 Finally, we continue to have a long uninterrupted dividend track record. Moving to the last slide, Slide seven. Charter rates in the condensate market remain at firm levels.

The continued high supply of tonnage, along with the increased ton miles due to the closure of the Suez Canal, is supporting the current charter rates. The idle fleet remains at low levels at 0.5%, indicating a fully employed market. With that, Luca will put our presentation, and we can now take questions. Thank you. Operator, we can take any questions now.

Conference Operator: Thank you. As a reminder, if you would like to ask a question, please press star then one on your telephone keypad, and wait for your name to be announced. If you wish to cancel your request, please press the star then 2. Again, that’s star 1 to ask a question. And your first question comes from the line of Omar Nokta of Jefferies.

Go ahead, please.

Omar Nokta, Analyst, Jefferies: Hi, guys. Thanks for the update. Just wanted to ask, morning or good afternoon. You you you spun off the the dry bulkers now. You’re placing these orders for the for the four container ships.

It’s your first order in some time. Is this reshift in focus effectively more is this a I’m trying to ask, I guess, perhaps, is this a renewed effort now now that you’re back to almost effectively a pure play container company? Is it now time to invest a lot more in the sector, or was this more of, like, an isolated opportunity to acquire those four new builds?

Gregory Zikos, Chief Financial Officer, Costa Amare Inc.: Okay. No. I don’t think it is a shift in in that focus. We didn’t put any new bidding orders in containers during COVID or after COVID simply because we found asset prices to be extremely high compared to the charter rates that, like, were available combined with the charter rate period. This deal for the four three thousand TEU vessels in terms of price, in terms of counterparty, in terms of charter period on a back to back basis, makes sense.

So it’s not that we shifted focus. We have been focusing on containers. It’s just that asset values at those levels we’ve seen up to now didn’t make much sense. Now if there is a correction in the market or if we find similar transactions that we feel make sense, we will definitely proceed. So the main reason has nothing to do with the drybulk.

It has to do mainly with elevated asset prices in the market.

Omar Nokta, Analyst, Jefferies: Okay. No. That makes sense. Thank you. And then maybe just a follow-up and perhaps a bit more bigger picture.

You know, now that you’re back to a container focused platform, obviously, I’ve not tuned. So I guess just is there any change in strategy or approach with the customary platform now going forward as a result of this new focus?

Gregory Zikos, Chief Financial Officer, Costa Amare Inc.: No. Definitely not. I think it is the same strategy we have been following since November 2010 that we went public and still do the same strategy we did have as a private entity. So as long as we feel that there are opportunities, we will proceed right now. Otherwise, you know, in times of elevated high prices, we have been patient.

And we can see the weight. We do have a fleet of 68 containerships today, all charters with a very good charter coverage for ’twenty five, ’twenty six and for the years to come with solid counterparties with low leverage. So we don’t have to do any new transactions unless they did by themselves justify entering into those deals. Otherwise, we can just sit and wait. Now this was a deal that we feel it made sense.

Also, it makes sense to charter on a forward basis from 2026 onwards to six and a half thousand TEU vessels. So, selectively, we will be doing change stuff like we have always been doing in the past.

Omar Nokta, Analyst, Jefferies: Yep. That’s clear. Okay. Thank you, Greg. I’ll pass it back.

Thanks.

Conference Operator: Our next question comes from Raymond Mullins of Value Investors Edge. Go ahead, please.

Gregory Zikos, Chief Financial Officer, Costa Amare Inc.: Hi.

Omar Nokta, Analyst, Jefferies: Good afternoon. Thank you for taking my questions. You’ve continued to deploy capital into Neptune Maritime Leasing, and you’re now at around 90% of the capital you initially committed. Could you talk a bit about how the venture is developing and about whether there is potential to increase your investment above the amount you initially committed?

Gregory Zikos, Chief Financial Officer, Costa Amare Inc.: Yes. I mean, I think that Neptune has been progressing well. We have in total, we have been far more committed to fund 47 vessels from various sizes and various types of assets. You are right, we have employed close to 90% of our initially committed capital. So so far, this investment goes right now, whether we’re gonna be employing more and at what terms, etcetera.

I’m not prepared to tell you now. But in general, I think that this investment has been going as initially planned a couple of years ago. And I have to remind you that all this growth has been affected in a relatively short time period.

Omar Nokta, Analyst, Jefferies: Makes sense. Thanks for the color. And following up on Omar’s question on strategy, given the increased visibility you now have on the business after spinning off the bulk side, should we expect any changes on shareholder returns, be it on the dividend or with more share repurchases?

Gregory Zikos, Chief Financial Officer, Costa Amare Inc.: I think the dividend policy, first of all, this is a Board decision, which is a repeating the dividend policy periodically. But the dividend policy remains the same irrespective of like whether we have the drybulk vessels or in all sort of in the span of entity. We’re paying and we still pay $0.01 $15 per share per quarter, which we do feel it is a healthy dividend. But of course, I cannot exclude any changes in the dividend policy being in terms of share buybacks or sort of dividend increases, etcetera. But this is subject to the Board’s decision.

We do pay dividends, but at the same time, we feel that an accretive deployment of our capital should be investing into new business rather than paying one off dividends.

Omar Nokta, Analyst, Jefferies: Yeah. Thanks for the color. Thank you for taking my questions.

Gregory Zikos, Chief Financial Officer, Costa Amare Inc.: Sure.

Conference Operator: Again, if you have a question, please press star then 1. This concludes the question and answer session. Mr. Zekos, please have your closing remarks.

Gregory Zikos, Chief Financial Officer, Costa Amare Inc.: Yes. Thank you for dialing in today and for your interest in Costa Mari Inc. We look forward to speaking with you again during our next quarterly results call. Thank you. Operator, we can conclude now.

Thank you.

Conference Operator: Thank you. This does conclude our conference for today. Thank you all for participating. You may now disconnect.

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