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DHT Maritime

(DHT) - Get DHT Holdings, Inc. Report

said its first-quarter results were helped by hiring out some of its tankers for crude-oil storage -- but it wasn't enough to prevent the shipping company from reporting a 10% decline in first-quarter profits and missing analysts' estimates.

The shipping company, based in the Channel Islands, said that excluding a $2.5 million non-cash writedown on interest-rate swaps, it had net earnings of $10.4 million, or 26 cents a share, three cents below Wall Street targets.

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Revenue, however, jumped 20% to nearly $30 million. DHT attributed the increase to its use of long-term charters -- which lock in rates for the term of the charter -- as a way to combat steeply dropping prices across the shipping industry.

The storage charters came amid a so-called "oil-price contango" during the first quarter. Anticipating a spike in petroleum prices, oil traders purposely overbought crude, paying an upfront fee, or contango, for the ability to make good on the full price of the oil in the future. Oil producers, then, hired out ships to keep the crude at sea until the payments were made. According to some reports, the industry saw the biggest contango in 25 years this January. Shippers benefit from contangoes, because they earn decent rates even while overhead costs decline.

Otherwise, business during the quarter was difficult for the company. The average daily earnings for DHT's Very Large Crude Carriers in the first quarter were $45,400, almost half the $96,100 they earned in the same period a year ago. It was less awful for the company's Aframax-class tankers; daily earnings for those ships fell to $30,200 from $33,600 a year ago.

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