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DryShips Meets Views; No Word on Drillships

DryShips matches fourth-quarter profit expectations, but gives no indication on the status of two important drillships charters.
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NEW YORK (TheStreet) -- DryShips (DRYS) - Get Report matched analysts' expectations for fourth-quarter profit, putting an end to a corporate voyage in 2009 that the company's executives likely won't want to experience again.

After Thursday's closing bell, the Athens-based shipping concern reported that, excluding a series of one-time charges, it would have earned $65.8 million in the fourth quarter, or 23 cents a share.

Revenue came to $193.5 million, which missed the consensus Wall Street target of $215.7 million, according to a survey of analysts by Thompson Reuters.

The one-time items totaled $64 million, much of which came from forfeited deposits after the company canceled orders for two vessels from a shipyard. Other charges were related to amortization of revenue, debt costs and stock compensation for employees, and marked-to-market losses on hedging instruments.

Taking all that into account, DryShips' true bottom line came to a profit of just $1.4 million, or a penny a share. A year ago, the company reported a loss of more than $1 billion after taking a $700 million goodwill impairment charge amid the collapse in shipping rates induced by the financial crisis. Revenue a year ago was $218 million.

Investors have long been awaiting word that DryShips has chartered out two of the four deepwater oil rigs -- called drillships -- currently being built by a Korean shipyard. To meet its goal of an IPO of its drillships business this year, the company requires those charter contracts. Executives have been promising an announcement for months, but none came on Thursday.

DryShips' boss, George Economou, did at least address the issue obliquely. "We are working to release the value in the drilling business with a potential IPO, at some stage this year, creating what we believe to be the only pure-play ultra deepwater player," he said in a statement. "We appreciate the support and patience of our shareholders and are working tirelessly to create shareholder value and highlight the attractive valuation of our Company."

As usual in his prepared quarterly remarks, Economou made bullish but vague pronouncements about the future --

in contrast to his peers

at rival

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(DSX) - Get Report

. "For 2010, we expect commodity demand to increase at a strong pace as the year on year gains in Chinese imports will be supplemented by a return to normality of the rest of the world," Economou said.

He also addressed, from a bullish perspective, the ship oversupply worries that have shadowed the industry for the better part of a year, saying that it expects vessel deliveries "to be reduced by cancellations and delays due to the severe lack of financing."

DryShips' New York-listed shares, stuck in a trading range for some time, rose more than 5% during Thursday's regular session, but in after-hours action the stock gave some of that back, changing hands at $5.58, down 17 cents from the close.

-- 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.