DryShips Inc. (DRYS) declared disappointing financial results for the second quarter of 2011. All of its three reporting segments: (1) Drybulk carrier (2) Oil Tanker and (3) Offshore Drilling, performed poorly in the previous quarter.
Quarterly GAAP net loss was $114.1 million or a loss of 33 cents per share compared with a net income of $19.5 million or 7 cents per share in the prior-year quarter. However, adjusted (excluding one-time charges) EPS in the second quarter of 2011 was 4 cents, significantly below the Zacks Consensus Estimate of 18 cents.
Quarterly total revenue was $224 million, remaining flat year over year, but well below the Zacks Consensus Estimate of $272 million. Quarterly Drybulk carrier revenue was $93.1 million, down 19.2% year over year. Revenue from Drilling contracts was approximately $126.6 million, up 16.2% year over year. Oil Tanker revenue was nearly $4.3 million. Quarterly Time charter equivalent revenue per day for Drybulk carrier was $28,080, down 14% year over year. Quarterly Time charter equivalent revenue per day for Oil Tanker was $16,935.
Quarterly total operating expenses were $270 million, up 127.2% year over year. This was mainly due to higher drilling rigs operating expenses, higher depreciation and amortization charges, and massive vessel impairment charges.
Operating loss in the second quarter of 2011 was $46 million compared with an operating income of $105.4 million in the prior-year quarter. In the second quarter of 2011, adjusted EBITDA (excluding gain/loss from interest rate swaps) was $136.2 million compared with $152.3 million in the prior-year quarter.
At the end of the second quarter of 2011, DryShips had $191.7 million of cash & cash equivalents and $2,122.5 million of outstanding debt on its balance sheet compared with $391.5 million of cash & cash equivalents and $1,988.5 million of outstanding debt at the end of fiscal 2010. At the end of the second quarter of 2011, debt-to-capitalization ratio was 0.39 compared with 0.34 at the end of fiscal 2010.
Recommendation
DryShips fiercely competes with other drybulk carriers, such as Diana Shipping Inc. (DSX) and Excel Maritime Carriers Ltd. (EXM). We maintain our long-term Neutral recommendation onDryShips. Currently, DryShipshas a Zacks #3 Rank, implying a short-term Hold rating on the stock.
DRYSHIPS INC (DRYS): Free Stock Analysis Report
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