What happened

Container shipping companies may not be the sexiest businesses on Wall Street. (Not unless you've read the Bill Gates-recommended history of the shipping container, The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, that is). But one shipping company is doing its best to reignite excitement in the sector Friday: Costamare (CMRE 2.26%) surged to a 23.1% gain as of 12:34 p.m. ET.  

Curiously, the ocean-going shipping company's results weren't unambiguously positive. Heading into the report, analysts had forecast Costamare would earn $0.59 per share (adjusted for one-time items) on sales of $256.5 million.  

So what

As it turned out, Costamare missed that adjusted earnings target, earning only $0.56 per share. What's more, its profit when calculated according to generally accepted accounting principles (GAAP) was only $0.52 per share. Sales, however, rebounded quite strongly -- and that's what investors seem to be reacting to Friday.  

Instead of the $256.5 million that Wall Street forecast, Costamare reported "voyage revenue" of $365.9 million from its combined fleet of container ships and dry bulk ships -- 43% better than expected, and a 26% year-over-year improvement. So while earnings may have been more miserable than expected -- down 43.5% year over year -- at least things are looking up.

Now what

Or are they?

Commenting on the quarter, CFO Gregory Zikos noted that the market for container ships continues to soften. However, with 99% of Costamare's container ship fleet already under contract through the end of this year, and 87% contracted through 2024, a softening market won't necessarily impact its revenues or profits much immediately.

Investors should expect such an impact eventually, however.

At the same time, Costamare seems to have taken advantage of the elevated rates on dry bulk shipping last quarter to boost its new dry bulk business. As Zikos observed, "our owned dry bulk vessels continue to trade on a spot basis while the trading platform has grown to a fleet of 56 ships." That was good news for the company in Q2, obviously. It may be less-good news when Q3 results roll around, however, as dry bulk spot rates began falling sharply in May.  

Long story short, as a Costamare shareholder, I'm certainly pleased with the market's reaction to the company's unexpectedly strong Q2 sales. There are plenty of storm clouds on the horizon, however. My best advice after reading through these results would therefore be: Batten down the hatches. We could be in for rough seas in Q3.