FreeSeas Offers Sanguine Outlook, Stock Up

Shares of FreeSeas(FREE Quote) shot higher Thursday after the small Greek dry-bulk shipper topped Wall Street targets and boasted that demand for the services of its handysize-class boats will strengthen this year.

In an earnings statement issued before the bell, FreeSeas, based in Piraeus, Greece, said that the global fleet of handysize ships, the most common kind of ocean-going cargo hauler, "has been shrinking since the third quarter of 2008" and will likely continue to do so as order cancellations have outpaced new ship christenings.

The company's chief executive, Ion Varouxakis, added in the statement that his company has seen indications of increasing rates and "improving strength in the charter market."

FreeSeas reported profit of about $6.2 million, or 29 cents a share, up from the year-ago period, when the company just about broke even. Revenue doubled to $17.6 million, due mainly to increasing the size of its fleet by a third (it now owns nine ships). Analysts were expecting earnings of 25 cents a share, on revenue of $17.9 million.

At least for the moment, the company seems to have righted itself. Earlier in the year, FreeSeas, like many of its dry-bulk peers, had been struggling under the weight of a substantial debt load. The company was able in March to persuade two of its banks to ignore breaches in its loan covenants.

FreeSeas stock was changing hands in frantic trading Thursday afternoon at $2.74, up 55 cents, or 25%, on ten times the daily average volume. The stock is down sharply from last summer's high of around $7.