Star Bulk Misses Targets on Weak Rates

ATHENS (TheStreet) -- Star Bulk Carriers(SBLK Quote) fell short of Wall Street targets for the second straight quarter, deflating its stock price Thursday even as other shipping equities moved higher.

The Greek outfit said it lost $3.4 million in the quarter, or 6 cents a share. Excluding a $1 million charge, the company's EPS came to 5 cents a share. No matter how you look at it, the company's bottom line missed estimates; four analysts polled by Thompson Reuters felt Star Bulk would break even.

A year ago, the company earned $32 million, or 62 cents a share.

Year-over-year comparisons across the dry-bulk industry have been tough this earnings season. In the second-quarter of 2008 the shipping business had yet to feel the full brunt of the worldwide recession, which led to a crash in rates from which dry bulkers have yet to recover.

Higher-than-expected operating expenses played a big role in the loss. Costs jumped to $9.1 million in the just-ended period, up from $5.8 million a year ago and $6.7 million in the first quarter of the year.

But in a press release issued after the close of trading Wednesday, Star Bulk chose to blame the loss on the general decline in shipping rates and the 46 days that one of its four Capesize ships, the Star Ypsilon, spent in dry dock.

Star Bulk took the 151,000-deadweight-ton ship out of service when its charterer returned it early, before the end of its contract, under which the Ypsilon had been earning some $91,000 a day. Though Star Bulk was eventually able to find another charter for the ship, the rate is far less -- about $43,000 a day -- underscoring the pricing pressure that remains in the industry.