DryShips Inc. (DRYS) is scheduled to announce its results for the fourth quarter 2010 tonight after the close. The dry-bulk transportation company, which is somewhat unique in the shipping industry in that it operates both drybulk carriers and also ultra-deep-water drillships, is expected to report its earnings at $0.26 per share on revenues of $226.21 million. This is up from last fiscal year, when DryShips earned $0.19 per share on revenues of $193.45 million.
For the third quarter of the year, DryShips Inc reported adjusted earnings of $0.38 per share. The co.’s revenue came in at $225.5 million, beating the consensus estimate of $216.92 million. DryShips, which has surprised on estimates 4 out of the last 5 quarters, also surpassed the earnings expectations which were pegged at $0.25 per share.
Shares of Athens, Greece -based shipper were down 2 cents to $4.94 during mid-day trading on Wednesday, hitting $4.92. Buyers need to step up and support the issue here or this weakness could gain some traction and lead to a 50-day MA test relatively soon, which is currently at $4.90. DryShips Inc has a market cap of $1.53 B and a 200-day moving average of $4.74.
From a valuation perspective, DRYS is cheap. It currently trades at just 4.9x forward 2011 earnings and it has a P/E to Growth ratio of just 0.45, well under its peers at 1.9. In addition to its cheap P/E, ticker also sports a low price-to-book ratio of only 0.51, while its peers are at 1.6.
The company has a trailing twelve return on equity (ROE) of 2.40% and a a trailing twelve return on assets (ROA) of 3.80%.
DryShips currently garners five “Buy” ratings from Wall Street analysts, including that of Cantor Fitzgerald’s analyst Natasha Boyden, who maintains a $7 PPS target on the shares. Boyden argues that the co.’s diversification into the offshore oil deep water drilling sector — DRYS operates 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships — is a positive development and could lead to a spin-off of the segment.
The median Wall Street price target on DRYS shares is $6.00 and the high target is set at $9.50.