ATHENS ( TheStreet) -- DryShips ( DRYS), the drybulk shipper, beat Wall Street targets by a slim margin Thursday, though its profits and revenue remain well below those of last year's pre-bust second quarter. After Thursday's closing bell, the company, which has struggled with a cumbersome debt load for most of the first half of the year, reported an after-items profit of $55.5 million, or 25 cents a share, four pennies better than analysts' consensus targets. Charges and gains taken in the quarter nearly canceled each other out, DryShips said. Including losses from the scrapping of a new vessel order and a gain from a profitable hedge using interest rate swaps, the company had earnings of nearly $53 million, or 24 cents a share. This is well below the $300 million, or $6.95 a share, that the company reported a year earlier, when the entire drybulk sector was still riding high before crashing later in 2008.
Revenue for the second quarter fell 58% to $107 million from $259 million a year ago. In the earnings release, DryShips CEO George Economou made his customary bullish remarks about the company and the industry. He cited China's stimulus package for spurring steelmaking in that country and boosting raw materials prices the world over, which in turn pushed shipping rates off their historic lows, reached in February. He also said DryShips has begun to see "signs of improvement" among European and Japanese steel mills. "We have taken advantage of this strengthening" by locking 87% of the company's fleet into long-term charter contracts at "healthy" rates, Economou said.
DryShips' average daily rate in the second quarter was $29,752. That's up from the first quarter, but far below the $70,701 the company fetched in the year-earlier period. Shares of DryShips were trading higher in after-hours action Thursday, up about 4% to $6.79 from the regular session close. Reported by Scott Eden in New York