Star Bulk Carriers' fourth-quarter profit fell by almost 50%, thanks to impairment costs related to a vessel sale this year - but its results were better than expected.
The New York-list bulker owner posted net profit of $12.3m, down from $23.8m a year earlier.
Those latest results included a $17.8m impairment loss related to the sale of the Star Delta.
On an adjusted basis, profit totaled $30.3m versus $21.5m at the same stage in 2017.
Earnings per share came in at $0.33, beating analyst consensus of $0.26.
"The beat was largely due to significantly higher revenues than our expectations," Stifel analyst Ben Nolan wrote in a note to clients.
Revenue almost doubled to $209.4m from $107.7m, in great part due to an increase in the average number of ships to 106.4 from 70.6 a year earlier.
“This is our fifth consecutive profitable quarter," chief executive Petros Pappas said.
Joakim Hannisdahl of Cleaves Securities said he was somewhat disappointed to see zero dividends declared in the quarterly report.
However, he said the $3.1m worth of stock repurchased in the period was more accretive to shareholders than dividends.
The Greek company is finishing the installation of 15 exhaust gas scrubbers on 15 of its larger ships, allowing it to equip most of its fleet with the IMO 2020 devices by the 1 January 2020 deadline.
"The company is well positioned to return value to shareholders through continued share buy-backs or by resuming dividend distribution if the discount to NAV closes," the analyst said.
First quarter coverage
Deutsche Bank analyst Amit Mehrotra said given the weakness in drybulk spot markets, there had been much concern around Star Bulk's results.
However, the company announced it has booked 70% of first quarter spot days at an average rate of $12,954, better than market expectations and the broader dayrate environment, the analyst said.
He viewed the first quarter to be the bottom of the market "as seemingly everything went wrong, with the Chinese coal-import restrictions and Vale dam disaster hitting the market just prior to the Chinese New Year."
Mehrotra said: "We think drybulk sentiment has turned overly negative and expect rates to firm over the coming months as trade normalises following the Chinese New Year. The supply outlook remains very favorable for ship owners."
Deutsche Bank thinks Star Bulk will start getting credit for its scrubber investments with increased clarity on their economics and returns as 2020 approaches.
"We would expect a positive reaction for SBLK shares given the Q4 beat and better-than-feared Q1 bookings," the bank said.
