Dallas, Texas 08/06/2014 (FINANCIALSTRENDS) – DryShips Inc. (NASDAQ:DRYS) best known for its bulk cargo transport services, this overseas-based player reported disappointing second quarter earnings report, on August 5.
Why Disappointing quarter?
Though, the disappointment was inline in previous quarter’s surprise negative earnings of 300%, this quarter too some of the core reasons appeared to roll over from previous quarter. The first of these was the tremendous pressure of operating on spot market rates. The management pointed out in its earnings call, that as a large part of its shipping contracts are currently operating on the volatility of spot market rates, the earnings weighed-in.
Spot Market Rate Uprised In Q1 Earning Call
The management of DryShips Inc. (NASDAQ:DRYS) had declared in its first quarter earning’s call about the sport market scenario to be in the region of 36% in 2014, 21% for 2015 and 15% in 2016.
The element of surprise in the drastic dip in the first quarter was therefore missing in the second quarter earnings as the top-line continued to fluctuate.
New Drilling Contract
In the second quarter, DRYS had adopted several strategies to optimize revenues including commencement of new drilling contracts. The company announced in the first week of June a new contract with Ocean Rig to use Eirik Raude rig. At the time of announcement, the estimated length of the contract was for a period not exceeding 260 days.
Competitors’ Sale Through In Q2
However, there have been other cargo transports that have been able to stem the international market trends to report positive trends as well. These include Nordic American Tankers Ltd, (NYSE:NAT) reporting ESP of +41.18%, KNOT Offshore Partners LP (NYSE:KNOP) reporting ESP of +9.38%.
DryShips Inc. (NASDAQ:DRYS) has a market capital of 1.11 billion and operates from its headquarters in Athina, Greece.