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Diana Shipping will likely turn in a deficit when it reports first-quarter earnings later this week, a leading analyst told investors Monday.

In a results preview issued by Arctic Securities, Erik Nikolai Stavseth warned clients that there’s a strong chance the New York-listed bulker owner’s balance sheet will be covered in red ink due to lacklustre freight rates.

While the forecaster believes the Greek operator and many of its compatriots will card first-quarter losses when they report earnings in the coming days and weeks he also thinks the second-half of 2014 will mark a turning point for the dry-bulk segment.

“Diana’s fleet has been fixed on unfavourable contracts through a quarter with soft spot earnings,” he said, adding: “However, most vessels are coming off their contracts during [second-half 2014], enabling Diana to take part in a firming dry bulk market.”

Stavseth believes Diana will report revenues of $46m for the three months to 31 March 2013 and earnings before interest, taxes, depreciation and amortization (Ebitda) of $13m. The analyst anticipates a quarterly deficit that will amount to $0.07 in lost earnings per share.

According to Omar Nokta of Global Hunter Securities, which is anticipating a loss of $0.11 per share, the Wall Street consensus estimate currently stands at negative $0.09. Diana, which is based in Athens, is scheduled to report earnings on Wednesday, 14 May.

Despite the lukewarm outlook Stavseth, like many of his Wall Street peers, was quick to point out that the Athens-based bulker owner is widely believed to be sitting on a war chest in excess of $250m and said he expects to see it acquire more tonnage “sooner rather than later”.


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Diana Shipping inc.

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