DryShips Inc, a Greek owner of ships that haul iron ore and coal, said first-quarter profit more than doubled on higher shipping rates and a larger fleet.

Net income rose to $176.3 million, or $4.61 a share, from $67.8 million, or $1.91, a year earlier, the company said in a statement released by Market Wire. The profit beat the $4.15 average of seven analyst estimates compiled by Bloomberg. Voyage revenue more than doubled to $232.1 million from $86.7 million.

Ship operators have been buoyed by record purchases of commodities by China, whose economy grew 11 percent in the first three months of the year. The Baltic Dry Index, a measure of bulk shipping rates, was an average 57 percent higher in the quarter than a year earlier.

“If you’re bullish on dry-bulk rates, then you have to be bullish on DryShips,” Greg Lewis, an analyst at Credit Suisse in New York, said. “They still have more spot exposure than any other US publicly traded shipping company.” Lewis has an “outperform” rating on the shares and doesn’t own any.

DryShips, based in Athens, puts its ships on the spot market instead of chartering them at set rates in agreements that can last years, allowing the company to take advantage of a strengthening market.

“Demand for commodities remains very robust and demand will outstrip ship supply over the next 12 months,” Lewis said.

The earnings report was released after the close of regular stock trading. DryShips fell $5.74, or 5.2 percent, to close at $105 in Nasdaq Stock Market composite trading.

DryShips operated an average of 38 vessels in the quarter that earned an average rate of $63,127 a day, compared with 32 ships and an average daily rate of $28,930 a year earlier.

Included in this quarter’s results was a gain of $24.4 million, or 64 cents a share, on a vessel sale. Excluding the gain, net income was $158 million or $4.13 a share. The year-earlier quarter included a $30.5 million gain on the sale of three ships. DryShips said it will realize $213.5 million in gains for the remainder of 2008 on vessel sales.

On April 22, DryShips increased its stake in Norwegian oil-rig owner Ocean Rig ASA to 54 percent, forcing a mandatory offer for the remaining shares. DryShips Chief Executive Officer George Economou said he hoped Ocean Rig shareholders would approve the purchase in early June.

The company wants to spin off Ocean Rig as a separate unit within a year, combined with two drill ships owned by Cardiff Marine, a closely held company founded by Economou.

DryShips also said in April it would buy two deep-water drill ships for $1.6 billion. Rental rates for these ships have risen as oil and natural-gas companies stepped up their search for new deposits amid surging prices.

Economou said he would begin to place some of his bulk fleet on time charter, a move Lewis supported.

“Given what he’s doing with the Ocean Rig assets, it makes sense to fix some vessels to get significant cash flows and mitigate some risk,” Lewis said. (Bloomberg)