DryShips Q2 Loss Narrower than Expected, Revenue & EBITDA Up

Zacks

DryShips Inc. (DRYS) declared better-than-expected second quarter of 2014 financial results. All three reporting segments of the company, namely, Drybulk Carrier, Oil Tanker and Offshore Drilling performed strongly. Consequently, in the aftermarket trade on Nasdaq, the stock price of DryShips was up by 19 cents (7.04%) to $2.89.

Quarterly GAAP net loss came in at $5.6 million or 1 cent per share compared with a loss of $18.2 million or 2 cents per share in the year-ago quarter. However, loss per share of 1 cent was significantly narrower than the Zacks Consensus Estimate of a loss of 5 cents.

Quarterly total revenue was $527.7 million, up 57% year over year. The figure was also well above the Zacks Consensus Estimate of $434 million.

Quarterly total operating expenses stood at $396.8 million, up 33.6% year over year. The increased expenses can be attributed to higher drilling rig operating costs. Operating income in the reported quarter stood at $130.9 million compared with $39.1 million in the prior-year quarter. Adjusted EBITDA (earnings before interest, depreciation and amortization) was $220.5 million as against $112.3 million in the year-ago quarter.

At the end of the second quarter of 2014, DryShips had $626.8 million of cash & cash equivalents and $5,954.6 million of outstanding debt on its balance sheet compared with $739.3 million of cash and cash equivalents and $5,568 million of outstanding debt at the end of 2013. The debt-to-capitalization ratio stood at 0.60 compared with 0.59 at the end of 2013.

Drybulk Carrier Segment

The Drybulk Carrier segment generated $49.6 million in revenues, up 2.7% year over year. Time charter equivalent revenues totaled $41.7 million, down 1.8% from the year-ago quarter. Time charter equivalent TCE rate was $12,064, down 5.4% year over year. Total voyage days for fleet stood at 3,453 up 3.8% from the year-ago quarter.

Oil Tanker Segment

The Tanker segment generated $36.6 million in revenues, up 31.5% year over year. Time charter equivalent revenues came in at $14.2 million, up 56.4% from the prior-year quarter. Time charter equivalent TCE rate was $15,650, up 56.4% year over year. Total voyage days for fleet grossed 910, remaining flat year over year.

Offshore Drilling Segment

Quarterly revenues from Drilling contracts totaled approximately $441.4 million, up 69.9% year over year. At the end of the second quarter, this segment had an order backlog of $4.8 billion.

Other Stocks to Consider

DryShips currently has a Zacks Rank #3 (Hold). Other better-ranked stocks in the Shipping industry are KNOT Offshore Partners LP (KNOP), Ship Finance International Ltd. (SFL) and Teekay Tankers Ltd. (TNK). All three stocks currently sport a Zacks Rank #1 (Strong Buy).

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