DryShips Inc. (NASDAQ: DRYS) is scheduled to release its first-quarter 2010 financial results after the market close on Wednesday, May 12, 2010. Analysts, on average, expect the company to report earnings of 22 cents a share on revenue of $202.78 million. In the year ago period, the company posted earnings of 35 cents per share on revenue of $196.62 million.DryShips, Inc. engages in the ownership and operation of drybulk carriers that operate worldwide. The company's fleet carries various drybulk commodities, including coal, iron ore, grains, bauxite, phosphate, fertilizers, and steel products. DryShips owns a fleet of 39 drybulk carriers (including newbuildings) comprising 7 Capesize, 30 Panamax and 2 Supramax, with a combined deadweight tonnage of over 3.5 million tons, 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships.
Shipping companies were hit hard by the economic downturn and shipping rates plunged by more than 90% as global recession curtailed demand for commodities. After slowing to 3.0% in 2008, global trade volumes contracted by an estimated 13% in 2009--the first contraction since 1982 and the sharpest in the postwar period.
In the preceding fourth quarter, the Athens, Greece based company said that it swung to a profit of $1.3 million compared to a loss of $1 billion in the same quarter last year. On a per share basis, net loss narrowed to $0.01 from $18.42 in the year-ago period. Excluding charges and gains totaling $64.4 million or $0.24 per share, net income for the quarter was $65.8 million or $0.23 per share. Revenues for the fourth quarter increased to $193.4 million from $210.6 million in the year-ago period. Analysts estimated third quarter revenues of $215.65 million.
The drybulk shipping and contract drilling company commenced a $150 million convertible senior notes offering last month. It later raised the size of its senior notes offering by 47 percent to $220 million. The company intends to use the proceeds for vessel acquisitions and other general corporate purposes.
Meanwhile, global trade flows have improved significantly in recent times. As the world has begun to emerge from the downturn, the Baltic Dry Index shows that shipping rates have begun to recover from their lows. Baltic Dry Index, which had fallen 59 percent in 2009 from a year earlier, is trading near 5-month high amid increase in demand for Capesize vessels. The Index moved up nearly 13% over the past two months.
Chief Operating Officer Pankaj Khanna said recently that the company is seeking an initial public offering of its rig segment as early as September. The drilling IPO may triple DryShips’ shares to about $18 from the current price of below $6, Khanna said in an interview.
In terms of stock performance, DryShips shares have lost nearly 20% over the past year.
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