DryShips Beats With More Players Reporting Tomorrow

• By the tickerspy.com Staff
• On 9:50 am EDT, Tuesday October 27, 2009

Athens, Greece-based DryShips (NASDAQ: DRYS - News) beat expectations in the third quarter, but investors shouldn't take their eyes off the sector.

DryShips topped the Street's expectations in the third quarter, and while part of the winnings were attributable to the company's drilling rigs, it also noted improvement in the spot shipping market. According to Reuters, dry bulk shippers have been looking for long-term charter contracts in lieu of the volatile spot market. The report also noted that Capesize ships averaged about $40,000 in daily rates for the last two quarters, more than twice the average in Q1 2009.

After adjustments, DryShips earned 27 cents a share during the period, beating analysts' 20-cent average estimate. Shares are flat on the report as the Dow erases a portion of yesterday's loss. Investors will be paying close attention to tomorrow's earnings from Kirby (NYSE: KEX - News) and Genco Shipping & Trading (NYSE: GNK - News).

As a whole, the Dry Bulk Shipping Stocks Index has sunk over the last week. However, after Monday's close it was still ahead of the S&P 500 by 1% on a one-month basis.

Eagle Bulk Shipping (NASDAQ: EGLE - News) and Excel Maritime Carriers (NYSE: EXM - News) are the worst performers in the last five sessions. Both were off by -9.2% prior to Tuesday's session. The former will report earnings on November 4.

Over the last month, Diana Shipping (NYSE: DSX - News), Genco, and Paragon Shipping (NASDAQ: PRGN - News) have set the pace with more than 10% runs.

Investors should keep a close eye on the Dry Bulk Shipping Stocks Index as more earnings are released. The Street will likely be looking for recovery optimism to carry these stocks through the end of 2009.

As of this writing, the sector is among the 20 cheapest tickerspy Indexes by P/E ratio with an average multiple of just 13x.

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