Stock Alert for DryShips Inc. (DRYS)
  • Stock Alert for DryShips Inc. (DRYS)
  • Nasdaq Stock to Watch; OmniVision on the Rebound
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    Shipping Stock on Watch: DryShips Inc. (NASDAQ: DRYS)

    Shipping Stock on Watch: DryShips Inc. (NASDAQ: DRYS)

    Shares of DryShips Inc. (NASDAQ: DRYS) jumped almost 12% to $3.74 Tuesday, extending gains into a second day.  Approximately 68.55 million shares have traded hands during the session, versus the 10-day average volume of 20.09 million. Over the past 52 weeks, the stock has ranged from a low of 1.75 to a high of $5.18.

    Shares in the Greek dry bulk shipper, along with other shippers, have recently been trading in the green on the back of a new agreement in Greek austerity measures. Investors welcomed the news that Greek political leaders voted to approve a series of drastic cuts in spending and wages, to meet the austerity demands for approval of a second eurozone bailout of the embattled country, valued at 130 million euro ($171.5 billion).

    DryShips is an owner of drybulk carriers and tankers that operate worldwide. Through its majority owned subsidiary, Ocean Rig UDW Inc., DryShips owns and operates nine offshore ultra deepwater drilling units, comprising of two ultra deepwater semisubmersible drilling rigs and seven ultra deepwater drillships, three of which remain to be delivered to Ocean Rig during 2013.

    The company owns a fleet of 45 drybulk carriers (including newbuildings), comprising 11 Capesize, 27 Panamax, two Supramax and nine newbuildings Very Large Ore Carriers (VLOC) with a combined deadweight tonnage of over 5.1 million tons, and 12 tankers (including newbuildings), comprising six Suezmax and six Aframax, with a combined deadweight tonnage of over 1.6 million tons.

    DryShips posted a net income of $25.0 million, or $0.07 basic and diluted earnings per share, for the third quarter of 2011.  That compares to a net income of $57.7 million, or $0.21 basic and diluted earnings per share, for the three-month period ended September 30, 2010.

    The results for the recently reported quarter include losses incurred on the company’s interest rate swaps totaling $31.5 million, or $0.09 per share. Adjusted to exclude these items, the company earned $56.5 million, or $0.16 per share.

    Basic earnings per share for the 2011 third quarter includes a non-cash accrual for the cumulative payment-in-kind dividends on the Series A Convertible Preferred Stock, amounting to $1.2 million, which reduces the income available to common shareholders.

    DryShips CEO George Economou said the third quarter of 2011 was a significant period for the company’s offshore drilling unit because it marked the successful completion of its drillship newbuilding program.

    “Since we acquired Ocean Rig, we successfully arranged financing, took delivery and entered into contracts with major oil companies for our four 6th generation ultra deepwater drillships. The outlook for the ultra deepwater drilling industry is bright, and we feel this segment is  well positioned to capitalize on positive industry fundamentals,” Economou said.

    DRYS shares have gained 35.5% in the last five days and 70.8% in the last month.  Year-to-date, the stock is down 27.7%.

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