If this is what an economic recovery looks like, investors in the shipping sector should shudder to think what even worse times might look like. While DryShips (Nasdaq:DRYS) has fared better than several of its rivals in drybulk shipping, the stock has been punished as shipping rates continue to decline below the operating costs of even the best operators. Though this is not a sustainable set of circumstances, and Capesize rates have spiked up recently, it could be some time before the shipping industry looks truly healthy again.
Disappointing Results For Q2
DryShips did not report an especially strong fiscal second quarter. Revenue was basically flat, as positive (albeit disappointing) growth of 16% in the offshore drilling segment was offset by a 19% decline in net voyage revenue in the drybulk business. Revenue in the drilling business was hurt by several rig mobilizations (companies typically do not get paid while they move rigs to a new jobsite); though that is a valid issue, it is one that the company could (and should) have communicated to investors earlier.
Read more through the link below:
http://stocks.investopedia.com/stock-analysis/2011/DryShips-Still-Leaking-DRYS-RIG-DSX-SB-NAT-GLNG-CMRE0902.aspx
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