GMR Q2 Profit Drops 55%

General Maritime 2nd-Quarter Profit Drops 55 Percent
By Todd Zeranski
July 31 (Bloomberg)

General Maritime Corp., the second- largest U.S. oil-tanker owner, said second-quarter profit fell 55 percent as the company's fleet declined in number and spent fewer days at sea.

Net income dropped to 37 cents a share, or $11.8 million, from $26.1 million, or 81 cents, a year earlier, New York-based based General Maritime said today in a statement. Revenue fell 18 percent to $62.7 from $76 million.

The size of the company's fleet declined by 5.5 percent, to 19 vessels. The total number of voyage days fell 4.6 percent, to 1,648. The number of days contracted on the spot market dropped 70 percent to 436.

General Maritime's fleet earned, on average, $33,739 per day, up 14 percent from $29,506 a day in the year-earlier period. The average spot market rate for its Suezmax tankers, where rates vary by voyage, was little changed at $32,957 a day.

The average spot rate for its Aframax tankers was $10,731, down 45 percent from $19,390.

General Maritime's earnings excluding a loss of 6 cents a share related to derivatives was 43 cents. On that basis, the company was expected to earn 40 cents, the average estimate of 10 analysts surveyed by Bloomberg. In last year's quarter, General Maritime's earnings were boosted by an $11.2 million gain from the sale of vessels.

JPMorgan Estimate

Jonathan Chappell, a JPMorgan Chase & Co. analyst, earlier this month lowered his per-share earnings estimate by 10 cents, to 38 cents a share.

``We believe the benefits of GMR's nearly 70 percent time- charter coverage in 2007 are already reflected in the stock's valuation,'' Chappell, who has a ``neutral'' rating on the shares, wrote in a report.

Shipping rates were 25 percent lower than last year's second quarter, according to the Baltic Dirty Tanker Index, a measure of rates for various-sized vessels on routes around the world. Suezmax tankers can transport as much as 1 million barrels of oil. Aframax tankers can hold 600,000 barrels.

Shares of General Maritime rose 37 cents, or 1.4 percent, to $26 in composite trading on the New York Stock Exchange.