DryShips (DRYS) Misses on Q4 Earnings, Beats on Revenues

DryShips Inc. (DRYS) declared lackluster fourth-quarter 2014 financial results. Quarterly GAAP net loss came in at $24 million or 4 cents per share compared with a loss of $24.4 million or 6 cents per share in the year-ago quarter. Moreover, adjusted net income per share of 2 cents missed the Zacks Consensus Estimate of 5 cents. Quarterly total revenue stood at $598.4 million, up 38.7% year over year. Moreover, the figure surpassed the Zacks Consensus Estimate of $550 million.

Quarterly total operating expenses stood at $459.9 million, up 32% year over year. The rise in expenses can be mainly attributed to higher drilling rig operating costs. Operating income in the reported quarter stood at $138.5 million, up 66.9% year over year. Adjusted EBITDA was $298.7 million as against $179.8 million in the year-ago quarter.

At the end of the fourth quarter of 2014, DryShips had $658.9 million of cash & cash equivalents and $5,517.6 million of outstanding debt on its balance sheet compared with $739.3 million and $5,568 million at the end of 2013. The debt-to-capitalization ratio stood at 0.56 compared with 0.59 at the end of 2013.

Drybulk Carrier Segment

The Drybulk Carrier segment generated $54 million in revenues, up 1.9% year over year. Time charter equivalent revenues totaled $46.1 million, flat with the year-ago quarter figure. Time charter equivalent (TCE) rate stood at $12,974, down 2.5% year over year. Total voyage days for fleet stood at 3,555, up 4.2% from the year-earlier quarter.

Oil Tanker Segment

The Tanker segment generated $45 million in revenues, up 36.8% year over year. Time charter equivalent revenues came in at $23.9 million, up by a whopping 120% from the prior-year quarter. TCE rate was $26,003, up a significant 100% year over year. Total voyage days for fleet grossed 920, flat year over year.

Offshore Drilling Segment

Quarterly revenues from Drilling contracts totaled approximately $499.4 million, up 44.5% year over year. At the end of the reported quarter, this segment had an order backlog of $5.2 billion.

Zacks Rank & Other Stocks to Consider

DryShips currently has a Zacks Rank #1 (Strong Buy). Other favorably-ranked stocks in the shipping and other related industries are Danaos Corporation (DAC), Nordic American Tankers Limited (NAT) and Spirit Airlines, Inc. (SAVE). All three stocks currently sport a Zacks Rank #1.