All eyes on DRYS

A leading equity analyst believes diversified Greek operator DryShips will turn in a loss when it reports second-quarter earnings Tuesday night.

In a note to clients Erik Nikolai Stavseth of Arctic Securities said he expects the Nasadaq- quoted tanker, bulker and drillship owner to card a net deficit of $1m for the three months to 30 June.

The forecaster believes second-quarter revenues and earnings before interest, taxes, depreciation and amortization (Ebitda) will come in at approximately $502m and $207m, respectively.

Stavseth pointed out that the period was “depressing” for owners of panamaxes and capes, which saw spot rates of around $6,300 and $12,000 per day on average, respectively.

While the analyst believes turbulence in the panamax segment took a toll on the bottom line he noted that many of the owner’s capes are still fixed on “relatively attractive” time charters.

Stavseth reminded investors that DryShips has been making progress in its campaign to refinance notes that mature later year, which serves as further evidence that Wall Street is hoping for another update when the company reports earnings later this week.

“While refinancing of debt has improved the situation for DryShips, we find the overweight of valuation of Ocean Rig to put the ‘ships’ in Dryships second both from a revenue and valuation perspective,” the analyst added after reiterating a “sell” recommendation.

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