It's hard to argue with a three-bagger, but here goes nothing.
Back into double digits, Excel Maritime Carriers
After a steady pounding of gut-wrenching headlines (guilty), Fools are no doubt delighted by Excel's headline earnings increase of 236%. Revenue soared to $222 million from $70 million. It sounds fantastic, and under any normal circumstances I would be branding this company the next DryShips
Let's begin by counting backwards from Excel's $118 million profit. If we subtract the $67.8 million relating to amortization of charters acquired with last year's Quintana acquisition, and a $51.5 million non-cash gain from additional amortization adjustments, the resulting picture for Excel's effective profitability leaves me unimpressed. In any event, the boost from these adjustments fails to erase the painful memory of that $335 goodwill writedown that so impaired the prior quarter's result.
Diving into operations, voyage revenues did 33% increase from the prior year as the fleet grew by leaps and bounds from an average 18 vessels to 47.8 operating . Again, under normal circumstances I would welcome the growth spurt, but with 13 vessels operating at woeful spot market rates, I smell revenue volatility in the air. Adding further uncertainty, Excel is awaiting delivery in 2010 of seven new Capesize vessels, but has inked charter contracts on only two. In contrast, Navios Holdings
Both Excel and DryShips have managed to secure crucial debt covenant waivers to forestall repayment concerns, but their overall debt burdens continue to raise red flags. As Diana Shipping