What happened

Investors in global maritime shipping stocks are having a bad day Tuesday, and it doesn't seem to matter what kind of shipping, either. The stock of Safe Bulkers (NYSE:SB), for example, a dry bulk shipper, was down 5.7% as of 3 p.m. EDT. But so, too, are container shippers ZIM Integrated Shipping Services (NYSE:ZIM) and Danaos (NYSE:DAC), down 10.6% and 11.2%, respectively.

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So what

For the longest time this year, it seemed that shipping stocks could do no wrong.

Demand for container ships to deliver goods to a world coming out of recession was booming, with the Freightos Baltic Index (which tracks the rates for hauling shipping containers across the waves) climbing more than 34% year to date. So, too, was demand for carriers of bulk cargo, up 136%!    

And in fact, business probably is still booming -- just a bit less emphatically than investors had hoped, and a bit more particularly as well. In dry bulk shipping, for example, the past week has seen strong results out of Safe Bulkers, which beat earnings with a stick at $0.14 per share, where analysts had predicted only $0.10. And its competitor Eagle Bulk Shipping may have missed on earnings, but crushed on revenue.

Where there's any weakness at all, it may be in container shipping. In that regard, last night gave us the first-quarter earnings from Danaos, which fell a bit short of analyst expectations at $2.83 per share on an adjusted basis, on sales of $132.1 million. Analysts had hoped to see $2.90 in profit, and $135 million in revenue.  

Now what

But I chalk that earnings miss more up to irrational exuberance on the analysts' part than to any fault of Danaos. After all, while it may have missed on sales last night, Danaos still grew its revenue a very respectable 24% year over year, while its adjusted earnings were twice what it had earned in the year-ago quarter.

And when calculated according to generally accepted accounting principles (GAAP), Danaos earned $14.47 per share, diluted -- more than 12 times what it earned in last year's first quarter. That's really nothing to complain about.  

Danaos CEO John Coustas said that "the dramatic turnaround and strength of the market which we experienced in the beginning of the year continues unabated," and the market for container shipping, as for dry bulk, may even be getting "stronger." As a result, he said, "liner companies are reporting record profits and, more importantly, are signing multi-year contracts at significantly higher levels which will keep their profitability at elevated levels."

Unless he's whistling past some graveyard, that all sounds to me like a situation in which shipping stocks that are down today might still have a lot more room to move higher.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.