(Eagle Bulk Shipping item updated with analysts' commentary and stock movements.)

NEW YORK ( TheStreet) -- Eagle Bulk Shipping ( EGLE - Get Report) bested Wall Street targets for fourth-quarter earnings, said it increased its exposure to spot-market rates for maritime freight services, and saw its share price jump on Wednesday.

After Tuesday's closing bell, the New York-based but Greek-run shipper (its founder and CEO is Sophocles Zoullas), reported earnings of $2.2 million, or 4 cents a share, better than the consensus target for Eagle Bulk among analysts, which called for a penny a share, according to a survey of the sell side by Thomson Reuters.

Eagle Bulk's year-over-year comparisons remain difficult -- Eagle's profit tumbled 76% from last year's $9.2 million, or 20 cents a share. But, as always, it's the outlook that matters, and a slight shift in strategy by the company appears to have garnered the cheers of investors and analysts.

In early afternoon trading Wednesday, Eagle's stock price was gaining 5.9% , or 32 cents, to $5.76. Volume reached 2.4 million shares, surpassing the average daily turnover of 1.9 million.

In January and February, Eagle took delivery of six new supramax-size vessels -- which, to one way of thinking at least, represents the leading edge of a looming ship oversupply that threatens to sink rates. (Back in the boom years, flush ship owners binged by ordering hundreds of vessels from shipyards, most of which are scheduled for delivery this year and next.)

Eagle Bulk has 33 ships now operating on the seas, with seven more scheduled for delivery this year and seven in 2011.

That aggressive fleet expansion has come at a cost: "Eagle is still operating under debt covenant waivers," Lazard Capital Markets analyst Urs Dur noted in a report to clients Wednesday. In other words, the vessels Eagle ordered during the boom years are worth less now than what the company agreed to pay for them.

Though the sums Eagle still owes for the carriers are fully financed, the situation has restricted Eagle's ability to pay out dividends, said Dur, who rates the company's stock a hold.

Of the company's six just-delivered ships, Eagle has chartered out four into long-term contracts at a set rate lasting one to three years. But the company put the other two new vessels into so-called index-based contracts, or charters paying daily rates that fluctuate with the vicissitudes of the Baltic Supramax Index. The contracts effectively give a shipping company exposure to the spot market without the risk of delay associated with seeking out new jobs.

In a rising market, the more ships a company has on the spot market, the more money it can make, since its vessels aren't locked into contracts booked when rates were lower.

Indeed, said Eagle Bulk CEO Sophocles Zoullas in his prepared statement, "We are also poised to benefit from direct participation in the spot market."

With those two new index-based contracts, Eagle now has six ships hired out under these charter types, which means that 44% of its fleet has effective exposure to the spot market, Zoullas said -- exposure that "occurs against the backdrop of improved industry fundamentals and recovering dry bulk demand."

Indeed, spot rates jumped sharply on Wednesday, benefiting from recent heightened booking activity. The going rate for a capesize ship, as estimated by the Baltic Exchange, the London ship broker, jumped 8% from Tuesday to above $30,000 a day. The going supramax rate increased 1.6% to nearly $25,000. That's up 8% from a week ago, however.

Dry-bulk names in general were in the green Wednesday. DryShips ( DRYS) shares were gaining 3.7% to $5.58; Diana Shipping ( DSX - Get Report), which took delivery of a capesize ship called the New York on Wednesday, was up 2.5% to $14.54; and Genco Shipping & Trading ( GNK - Get Report) was rising 4% to $22.60.

Fourth-quarter earnings season for the shipping trade has pretty much run its course, with some executives taking a bearish view, most notably those at conservative Diana, and others looking ahead through a rose-tinted telescope, most notably DryShips.

-- Written by Scott Eden in New York


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.