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Updated to include DryShips' financial results

ATHENS, Greece (


) --



may have righted a ship that seemed to be teetering only a few quarters ago.

The dry-bulk shipper and deepwater drill-ship operator reported earnings of 18 cents a share, or $49 million. Excluding items, though, the income number would have come $99 million, or 38 cents, which easily bested the consensus Wall Street estimate of 25 cents a share.

Investors bid up DryShips shares by 7% in aftermarket trading to $5.57.

Quarterly revenue inched higher by 1.4% to $225.2 million from a year ago, but that's better than the $217 millon analysts were expecting, on average.

The company finally made good this fall on promises regarding its long-floundering drilling business, inking contracts on several vessels that had still required financing.

DryShips CEO George Economou issued a rosy outlook on that score as well, saying in a prepared statement, "The ultra deepwater market has turned a corner in the last couple of months and we believe that current enquiry from operators matches or may even exceed the supply available in 2011."

During the regular session,



shares fell 4.8% after the operator of drybulk carriers posted a net loss of $9.5 million, or $1.51 per share, for the third quarter, compared with a profit of $465,000, or 8 cents per share, in the year-earlier period.

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swung to a quarterly loss. The shipper posted lower revenue and hedging benefits, and said rates continued to soften.

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Earlier this week DryShips, announced it finally got a long term contract for one of its energy-exploration vessels.

DryShips said it received a "letter of agreement" from an unnamed U.S. oil company to explore for energy off the coast of West Africa for 300 days, which is atypical in length; most charters have a longer term.

>>DryShips Jumps on DrillShips Deal

The contract, DryShips said, is worth $135 million. That translates into a rate of $425,000 a day, not including the cost of moving the ship to West Africa, which is "in line with recent contract awards," wrote Omar Nokta, a shipping analyst at the investment house Dalhman Rose, in a note to clients Tuesday.

The charter would apparently help DryShips find a loan to cover the more than $1 billion it still owes a South Korean shipyard for two drilling vessels it has on order there.

Investors have been waiting for such an announcement since last year.

Uncertainty surrounding the company's drillships business has dogged DryShips' stock for much of the last year. "The shares should now see an immediate lift and close the gap toward its 'real' equity value following this contract," Nokta wrote, though he added that the prospect of equity dilution from an at-the-market offering of stock by the company could still drag on the stock.

"At this point, it is still unclear how much of that offering has been/will be issued, as DryShips is now better positioned," he said.

Nokta maintained his hold rating on DryShips stock, but said that the contract news could mean that other charter deals are in the works, which would help lift the company's shares toward $7. That's where Nokta puts DryShips' net asset value, or NAV.

Word of the deal may have leaked on Monday, when

DryShips stock leapt more than 8%

on little news except an upgrade by a shipping analyst at

Morgan Stanley


Huntington Asset Advisors' Peter Sorrentino noted recently that he likes DryShips because it "specializes in the supply and movement of deepwater drilling equipment. With the moratorium in the Gulf of Mexico there are a number of rigs being moved currently to the west coast of Africa and towards the east coast of Brazil. This activity is not currently reflected in estimates for the company and should result in earnings surprises for the next couple of quarters."

"In addition, the demand for dry-bulk shipping of grains and minerals will be stronger than initially forecast due to both weather and industrial production issues," he added.

Sorrentino said DryShips is in a position where, if Baltic Dry shipping rates tick up on better economic data, it will take off.

The analyst expects DryShips' stock to at least double within a year.

>>13 Hot Stocks Poised to Double, Triple ... Even Quadruple

-- Written by Miriam Marcus Reimer in New York.

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