DHT Maritime Stock Lists on Bad Quarter
ST. HELIER, Channel Islands (TheStreet) -- Shares of DHT Maritime (DHT) - Get Report, an oil tanker shipping company, plunged more than 20% Wednesday after the company missed Wall Street targets for its second quarter and canceled its dividend.
The company blamed the poor showing -- the second straight quarter that it has missed analysts' estimates -- on slower demand for oil amid the recession and, thus, reduced profit-sharing under its charter agreements.
All of DHT's nine vessels are contracted out under charters that last at least through the second quarter of 2012.
Midday Wednesday, DHT's New York Stock Exchange-listed shares were trading at $3.99, down $1.09, or 21%, on a volume of 4.3 million shares, more than ten times the daily average turnover.
Excluding the fluctuating value of its interest-rate swaps, which DHT uses as a hedging mechanism, the company posted earnings of 7 cents a share.
DHT's net income for the just-ended quarter, which includes the non-cash swap income, came to $5 million, or 10 cents a share, down from $10.3 million, or 29 cents a share, a year earlier. Either way you look at it, DHT's second-quarter bottom line was well below the 16 cents a share that analysts were expecting.
The company's revenue slid nearly 6% to $26.2 million.
As for canceling its second-quarter dividend, DHT argued that the depressed value of ships means that opportunities abound for expanding its fleet on the cheap. Thus, in order to improve its balance sheet in order to make these purchases, it cut its dividend completely. The company said future dividends "remain subject to quarterly reviews."
DHT has been criticized in the past for poor debt management. As of the end of June, the company had about $293 million in long-term debt on its balance sheet, and about $50 million in cash. DHT made sure to note, however, that it's operating within its financial covenants.
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.
