UPDATE 3-DryShips posts Q1 profit before items, shares rise
* Q1 shr $0.45, excl items beat est. $0.18
* Q1 Total rev. $196.6 mln miss est. $198.3 mln
* Has liquidity of $1.7 bln as of Mar 31
* Secured 65 pct of available days in 2009
* Shares up 17 pct (Recasts, adds details, analyst comments, updates share movement)
By Sakthi Prasad
BANGALORE, May 1 (Reuters) - Greek dry bulk carrier DryShips Inc (DRYS.O) posted a quarterly profit, before one-time items, beating maket estimates, helped by lower operating costs, and also due to long-term charter contracts that partly shielded the company from a weak freight rate environment.
Shares of the company were trading up 17 percent in afternoon trade on Nasdaq.
"They beat the consensus estimate based on cost saving along the lines of SG&A, which was substantially down quarter-over-quarter, and they were able to save costs on interest expense," Credit Suisse analyst Gregory Lewis said by phone.
Analyst Scott Burk of Oppenheimer & Co said the main reason for the beat is lower general & administrative and interest expense.
Quarterly general & administrative expense fell about 83 percent to $2.9 million and interest expense halved to $12.9 million.
Analyst Urs Dur of Lazard Capital Markets upgraded the company's stock to "hold" from "sell."
"The improved capitalization and a more stable outlook make us believe banks will likely waive collateral maintenance covenants, at least for some time, as DryShips appears able to service its debt," Dur said.
In a conference call with analysts, Chief Executive George Economou said he expects the dry bulk commodity demand would grow once recession abates.
DryShips, which had secured loan covenant waivers for its debt totalling about $1 billion, said as of March 31, it had liquidity of $1.67 billion.
"With current liquidity of about $1.7 billion and no immediate capital expenditure requirements, DryShips is uniquely positioned among its shipping peers to go after distressed assets and drive the long awaited consolidation of the industry," Economou said. Continued...
