Expect Smooth Sailing for DryShips

As regular readers would know, DryShips (DRYS) has been one of my favorites for some time, as both myself and Paul have published a number of research articles on this one including a report on how DRYS was trading well behind the Baltic Index. DRYS and GE marked our financial services divisions' first "house trades" over the last few months and Buzz Inc has good sized positions in both.

DryShips Inc reported better than expected quarterly earnings, helped by the recent rise in spot charter rates that the Baltic Index indicated 2 months ago. DryShips also seen an increased contribution from its offshore drilling segment.

Charter rates for drybulk ships which carry commodities such as iron ore, coal, and grains have been improving over the last few months. Day rates for capesize ships averaged about $40,000 a day for the second quarter, double the first-quarter average of about $20,000. "The last several months the dry bulk freight markets have recovered to healthy levels led by strong growth in China," Chief Executive George Economou said in a statement. "We are also beginning to see signs of improvement from other regions, with steel mills in Europe, Japan and elsewhere restarting idle capacity," he added.

DryShips claims it now has about 87 percent of its shipdays in 2009 and 2010 fixed, which would by my estimates deliver bumper earnings in the next few quarters.

In the second quarter of 2009, the company reported a net profit of $52.8 million, 24 cents a share, compared with $299.8 million, $6.95 a share, last year.

Excluding items, the drybulk shippers' earnings for the latest quarter was 25 cents a share. Analysts, on average, had expected earnings of 23 cents a share.

Total revenue fell 30 percent to $210.5 million, caused by the crash in charter rates from last year. Analysts had forecast revenue of $202.9 million.

Disclosure: Long DRYS

Comments

[ain't no fo...:]

Yah, George runs a great operation - for George and his ex-wives. If you like how he increased the shares outstanding from about 40 million to nearly 250 million in the past 9 months, while raping shareholders on the drill ships deal and every secondary he dumped on them in that time, pile on here... its a real undiscovered gem... should be back over $100/share any day now, and don't worry about that monster float.

This thing was trading WELL BEHIND THE BALTIC INDEX for a reason - actually for about 250 million reasons.

Jul 31 11:55 AM

[buyforeclos...:]

Lol.... how much have you lost on this total scam company?


I mena it could squeeze to 14 or whatever ..but you cannot trust a WORD George says...he belongs in prison period

Jul 31 12:46 PM

[User 435625:]

lFunny how some folks without portfolio just like to see there inane comments in print...Red


On Jul 31 11:55 AM ain't no fortunate son wrote:

> Yah, George runs a great operation - for George and his ex-wives.
> If you like how he increased the shares outstanding from about 40
> million to nearly 250 million in the past 9 months, while raping
> shareholders on the drill ships deal and every secondary he dumped
> on them in that time, pile on here... its a real undiscovered gem...
> should be back over $100/share any day now, and don't worry about
> that monster float.
>
> This thing was trading WELL BEHIND THE BALTIC INDEX for a reason
> - actually for about 250 million reasons.

Jul 31 01:17 PM

[The Aft Deck:]

It was not an easy year for anyone, DRYS survived while many others did not

Jul 31 01:23 PM

[lynda apple...:]

There have not yet been that many bankruptcies. The worst is yet to come.


On Jul 31 01:23 PM The Aft Deck wrote:

> It was not an easy year for anyone, DRYS survived while many others
> did not

Jul 31 01:36 PM

[ain't no fo...:]

George survived. Most of his shareholders were destroyed.


On Jul 31 01:23 PM The Aft Deck wrote:

> It was not an easy year for anyone, DRYS survived while many others
> did not

Jul 31 01:46 PM

[ain't no fo...:]

please little child, do some homework and learn how to read SEC filings before you call someone inane... and learn about such basic stock market terms as dilution, which was a major contributing factor to why this stock went from $116 to 2 in exactly one year... but then, I have a feeling you KNOW that already, most probably having taken the plunge yourself as you fell for the line of bull that came out of Economou every time he stepped up with Merrill at his side to dump another $500 million worth of stock on the shareholders

I note this is your first comment on SA - did uncle Georgie send you over?


On Jul 31 01:17 PM User 435625 wrote:

> lFunny how some folks without portfolio just like to see there inane
> comments in print...Red

Jul 31 01:55 PM

[notsosmart:]

anyone who loses money on this dog cant complain.the warnings have been there for a long time.there are much better places to put your money.

Jul 31 02:09 PM

[buygolly:]

Much of the Baltic's index revival has been a result of Asian stimulus efforts and restocking of raw materials when commodity prices and shipping rates were down. This is all well and good, as long as it continues. Now, however, there seems to be a building concern that the stimulus programs.....mostly in China.....are reaching unsustainable levels and a bubble of sorts is developing in the Asian markets.
Recent history should still be crystal clear in our minds...let's hope.
If the "C" in "BRIC" begins to roll over, the Baltic Index...and DRYS...will soon follow. IMHO, this possibility bears watching very closely with ones finger hovering over the 'Sell', or 'Short' button for those trading the sector. Good Luck all.

Jul 31 02:29 PM

[duces:]

I buy when it starts going up.

Jul 31 05:59 PM

[duces:]

I buy when it starts going up.

Jul 31 06:00 PM

[tedster98:]

This may be an cheap market, don't know about dryships, but EXM, NM, and DAC have been really beaten down. NM pays a nice (and healthy 5.11 % dividend, the others are far more risky, but may be worth a crap shoot.

Aug 02 03:31 AM

[Novice Trader:]

I bought DRYS @ $5.05 and OCNF @ $1.24. I'm making money, not sure what the rest of you are complaining about :-)

Aug 02 09:36 AM

[over ole ge...:]

Yep your right worst ceo in the freakin world !! and if the stock ever gets back to double digits the dumbass will do another offering , read his dumbass coments on the 2nd quarter talking buying more trouble companies , he is a idea jackass how about cleaning up your balance sheet !!

Aug 03 02:41 PM

[over ole ge...:]

You got lucky and bought it @ the bottom this time last year it was @ 80 bucks a share , so thats why u see folks on here all the time complaning , I bought the shit stock @ 12 bucks in jan right before jackass decides to do another offering then I allmost got back in even in may then of course jackass does another offering should have took 50 cent loss in may and drop this dog !


On Aug 02 09:36 AM Novice Trader wrote:

> I bought DRYS @ $5.05 and OCNF @ $1.24. I'm making money, not sure
> what the rest of you are complaining about :-)

Aug 03 02:53 PM

[ramisle:]

Having 87% of the fleet booked until 2011 means stagnant earnings, and that includes the three year charters on the currently operating Drill Rigs, and new rigs won't arrive for two years. Meanwhile the 217 million weighted average share count will be rising to 300 million.

Aug 03 06:04 PM