Excel Exceeds Earnings Estimates

Last week, Excel Maritime Carriers Ltd’s (EXM) reported third-quarter earnings of 81 cents per share were substantially ahead of the Zacks Consensus Estimate of 3 cents. Last year, the company reported earnings of $2.81. 

Revenue from operations amounted to $174.4 million as compared to $231.6 million last year. Decline in revenues was brought about by an amortization charge of $76.4 million relating to the acquisition of Quintana as well as a decline in voyage revenues. 

Operating expenses increased 1.6% year-over-year to $90.9 million, mainly due to an increase in general administrative expenses. 

Adjusted earnings before interest taxes depreciation and amortization (EBITDA) for the quarter came to $59.1 million, compared to $110.1 million for the year ago quarter. 

An average of 47 vessels were operated during the quarter, earning a blended average time charter equivalent rate of $21,912 per day, down 35% year-over-year. 

Excel Maritime Carriers Ltd is a shipping company specializing in the worldwide seaborne transportation of dry bulk cargo. The company has a number of competitive strengths, including an experienced management team, strong customer relationships, cost-efficient operations and a strategy that emphasizes fixed charter coverage. However, the company faces adverse changes in demand and supply for vessel capacity, extreme volatility for spot market and short-term time charter rates, customer and revenue concentrations, integration risks from the merger with Quintana, and exchange rate fluctuations. For now, we maintain a Neutral recommendation on the shares.
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