ATHENS (TheStreet) -- DryShips (DRYS) posted better-than-expected results Monday, largely on the back of some efficient management of its ships during the third quarter.

Although the company's bottom line in the period was hurt by a nearly $40 million decline in the value of interest rate swaps it had purchased as a hedging tool, the company said that, excluding the write-down, it would have registered net income of $74.9 million, or 27 cents a share, in the quarter.

Wall Street analysts, who typically strip out these kinds of items from their estimates, were expecting a per-share profit of 20 cents a share.

Because DryShips has issued a tremendous amount of equity since the beginning of the year in a bid to raise money to pay down a significant debt load amassed during the boom years, EPS comparisons with 2009 aren't as informative. A year ago, before the financial meltdown and recession destroyed shipping rates, the company earned $180 million, or $4.13 a share.

Revenue, meanwhile, declined 30% to $228 million in the just-ended quarter from $328 million a year ago. That's slightly better than the consensus Wall Street target of about $211 million.

DryShips' recent and uncharacteristic move to tie up its fleet into long-term charters meant that nearly 100% of its 39 drybulk vessels didn't need to seek out employment in the volatile spot market during the quarter. The fleet is "virtually fully fixed for the remainder of 2009 and 2010," the company said.

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

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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.

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