Known and criticized in previous years for his gambler's approach to the shipping business, DryShips' chieftain George Economou decided sometime in the spring to step away from the green-felt tables of the spot market. DryShips hasn't been the only one to do so, of course. But the percentage of its fleet under long-term charter is higher than at most other concerns. Still, that means the company hasn't been able to take advantage of a recent strengthening in spot-market rates. Much of DryShips' upside relative to estimates in the third quarter appeared to come from keeping costs low and from avoiding the kind of maintenance problems that take ships out of service for longer-than-expected periods of time. Indeed, the company was able to keep its boats earning money on the high seas for more days than originally anticipated. Another bright spot in the earnings report was an increase in drillships revenue, which rose to $107.6 million from $88 million a year ago. For the last two years, DryShips has pursued a strategy to build, and potentially spin off, an offshore drilling business. Economou and company have also been working hard to market the strategy to investors. Indeed, the earnings release Monday led with commentary on the drillships segment of the company's business. It owns two such vessels, picked up in 2007 with the acquisition of a Norwegian outfit called Ocean Rig, and is working to ink contracts for four other rigs currently being built in shipyards in Korea. It must receive those contracts in order to find the roughly $1 billion in financing it still requires to fully pay for the new ships.
Economou, also known for his optimistic statements in his company's earnings reports, strove to allay fears over a glut of new ships slated to enter service in the coming year. Even though "a larger orderbook remains a cause for concern, especially for 2010," the CEO said in a prepared statement, "actual deliveries in the first nine months of 2009 were much smaller than were anticipated at the beginning of the year and offer some hope that cancellations and delays will alleviate the projected oversupply." DryShips shares rose slightly in aftermarket action Monday, changing hands recently at $6.83, down 14 cents from the regular session close. -- Written by Scott Eden in New York Follow TheStreet.com on Twitter and become a fan on Facebook.