UPDATE 2-FreeSeas Q1 profit beats Street, shares soar

* Q1 EPS $0.29, beats estimate $0.25

* Q1 oper rev $17.6 mln miss est $19.7 mln

* Expects to achieve profitability through 2009

* Says charter coverage is 61 pct in 2009

* Stock up more than 30 percent (Recasts, adds details, conference call comments)

May 28 (Reuters) - Greek shipping company FreeSeas Inc (FREE.O) posted a quarterly profit that beat market expectations, due to lower operating costs, and said it expects to remain profitable through the year.

FreeSeas shares surged as much as 36 percent making it the top percentage gainer on the Nasdaq Thursday.

The company said its "current and immediate focus" was to repay debt and added that it was also selectively pursuing potential opportunities to expand its fleet.

In a conference call with analysts, Chief Executive Ion Varouxakis, said the company has fixed 61 percent of its fleet in long-term charter contracts.

"We reduced daily operating expenses by 38.7 percent and daily general and administrative expenses by 40.3 percent, on a per vessel basis," Varouxakis said.

Daily vessel operating expense fell about 39 percent to $4,295. Varouxakis said in the call that he aims to bring down this expense to below $4,000 in the coming quarters.

FreeSeas, which had recently obtained covenant waivers from its bank lenders, is scheduled to pay back $19.2 million of its debt in 2009. The company said it has already paid $5.3 million in loan principal as on Thursday.

"We are in full compliance of our financial covenants with our lenders," Interim Chief Financial Officer Dimitris Filippas said in the call with analysts.

For the first quarter, the company earned $6.2 million, or 29 cents a share, compared with $283,000, or 1 cent a share, in the year-ago period.

Operating revenue more than doubled to $17.6 million.

Quarterly average time charter equivalent rate -- a measure of hire rate -- was slightly down at $20,334 per day.

Fleet utilization stood at 99.9 percent and the average number of vessels rose by four to nine.

Shares of the company, which had touched a low of 52 cents on March 3, were trading up 63 cents, or 29 percent at $2.82 in noon trade on Nasdaq. (Reporting by Sakthi Prasad in Bangalore; Editing by Himani Sarkar, Dinesh Nair)