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DryShips Meets 1Q Earnings Estimate - Analyst Blog

By: Zacks.com
Posted: 5/23/2013 8:25:00 AM
Referenced Stocks: DRYS;EGLE;ORIG;PRGN

DryShips Inc. ( DRYS ) declared its financial results for the first quarter of 2013. Solid performance by the company's majority owned deepwater oil drilling unit, Ocean Rig UDW Inc. ( ORIG ) was the primary factor for the top-line growth. Ocean Rig, in which DryShips controls a 59% stake, currently has an order backlog of approximately $4.9 billion over the next three years.  

Quarterly GAAP net loss was $116.6 million or a loss of 30 cents per share compared with $47.5 million or 12 cents per share in the prior-year quarter. However, adjusted (excluding one-time charges) loss per share in the first quarter of 2013 was 10 cents, exactly in line with the Zacks Consensus Estimate. Quarterly total revenue of $319.7 million surpassed the Zacks Consensus Estimate of $312 million and improved 29.2% year over year.

Despite these positives, the stock price of DryShips was down 8 cents (3.8%) to $2.01 in the aftermarket trade on NASDAQ. This was primarily due to disappointing future outlook given by management. DryShips declared that it does not foresee any improvement in the time charter rate for the rest of 2013. This was attributed to the sluggish growth in China, the largest importer of coal and steel in the world.  

Quarterly total operating expenses were $364.6 million, up 55.1% year over year. This was mainly due to higher operating expenses for drilling rigs, higher voyage expenses and higher vessel impairment charges. Operating loss in the reported quarter was $44.9 million compared with an operating income of $12.5 million in the prior-year quarter. In the first quarter of 2013, adjusted EBITDA was $112 million compared with $104.1 million in the prior-year quarter.

At the end of the first quarter of 2013, DryShips had $315.7 million of cash & cash equivalents and $4,424.2 million of outstanding debt on its balance sheet compared with $315.7 million of cash and cash equivalents and $4,241.8 million of outstanding debt at the end of 2012. At the end of the reported quarter, the debt-to-capitalization ratio was 0.53 compared with 0.52 at the end of 2012.

Drybulk Carrier Segment

The Drybulk carrier segment generated $45.5 million in revenues, down 41% year over year. Time charter equivalent revenues were $36.9 million, down 49% year over year. Time charter equivalent TCE rate was $11,396, down 48.3% year over year. The total voyage days per fleet were 3,240, down 1.3% year over year.

Oil Tanker Segment

The Tanker segment generated $27.8 million in revenues, up 271.7% year over year. Time charter equivalent revenues were $10.9 million, up 50.5% year over year. Time charter equivalent TCE rate was $12,792, down 19.6% year over year. The total voyage days per fleet were 848, up 87.2% year over year.

Offshore Drilling Segment

DryShips Quarterly revenues from Drilling contracts were approximately $246.4 million, up 51.2% year over year.

Other Stocks to Consider

DryShips currently has a Zacks Rank #3 (Hold). Other stocks to consider in the shipping industry are Eagle Bulk Shipping Inc. ( EGLE ) and Paragon Shipping Inc. ( PRGN ). Both these stocks currently have a Zacks Rank #1 (Strong Buy).



DRYSHIPS INC (DRYS): Free Stock Analysis Report

EAGLE BULK SHPG (EGLE): Free Stock Analysis Report

OCEAN RIG UDW (ORIG): Free Stock Analysis Report

PARAGON SHIPPNG (PRGN): Free Stock Analysis Report

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