DryShips Earnings Drag the Anchor (DRYS)

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DryShips Inc. (NASDAQ: DRYS) posted $0.43 EPS and a 6.6% year over year decline in revenues to $217.9 million.  First Call had estimates at $0.66 EPS and $209.6 million in revenues as the consensus estimates.  This is also the company’s Q4-2008 report, so it is a bit late in the quarter when you consider that this is a December-end report.

The shipper said that its net Voyage Revenues came to $117.1 million, and this is down from $223.5 million year over year.  Revenues from drilling contracts following the acquisition of Ocean Rig came to $87.5 million.

The company also said that the Operating Loss from both segments was $794.3 million for Q408, as compared to operating income of $211.9 million for the quarter ended December 31, 2007.

It also noted that it has previously reported a definitive and a preliminary agreement with lenders over waivers of loan covenant breaches.   It also remains in talks with its other lenders concerning current breaches of loan covenants. Pending the outcome of those discussions, it has reclassified roughly $1.8 billion in debt. It also expects to incur a loss of about $116 million in the current quarter about to end over the disposal of three Capesize newbuildings (ships).

Shares had a substantial day yesterday, but the stock is getting clipped early this morning.  Early indications show trades down around the $4.55 to $4.60 level, and that compares to a $5.52 close.  As you probably know, moves of 20% are fairly routine in this.  Its 52-week trading range is $2.72 to $116.43.

JON C. OGG

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