Eagle Bulk Shipping Posts $1.4 Million Loss

NEW YORK (TheStreet) -- Eagle Bulk Shipping (EGLE) Wednesday reported a narrower than expected loss for its fiscal second quarter as revenue rose 16.5% from a year earlier.

The New York-based dry bulk shipping company reported a loss of $1.4 million, or 2 cents a share, for the three months ended June 30 on revenue of $76.4 million. The average estimate of analysts polled by Thomson Reuters was calling for a loss of 4 cents a share on revenue of $66.4 million for the June-ended period.

"During the second quarter, Eagle Bulk's consistent focus on the Supramax segment yielded steady results that outperformed all other dry bulk vessel classes in a challenging market," said Sophocles Zoullas, the company's chairman and CEO, in a statement. "The build-out and renewal of the Eagle Bulk fleet now enters its final phase, as we took delivery of one new Supramax vessel and sold an older, 2001-built Supramax."

>>Dry Bulk Profits Held Back by Too Many Ships

Eagle Bulk also said it's been informed by the agent for its lenders that the original covenants related to its long-term debt obligations have been reinstated, a decision the company disagrees with. The company is in "active discussions" with the agent to resolve what it referred to as a "technical matter" but if it cautioned that if the agent's interpretation remains in effect it could lead to a default that "could lead to substantial doubt about our ability to continue as a going concern, if we are unable to agree on satisfactory terms or obtain a waiver from the agent."

The company added: "We continue to seek to reach a satisfactory agreement with the agent, but there can be no assurance that we will be successful in doing so."

Eagle Bulk also said it's recorded an advance of $153.1 million towards construction costs of five new vessels with shipyards in Japan and China to be delivered in the second-half of 2011.

The stock closed Wednesday at $2.15, down 2 cents, and it moved lower in after-hours action, sliding another 3 cents. Year-to-date, the shares are down more than 50%.

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