What is going on with Diana Containerships stock? Recall that this company is a global shipping company specializing in the ownership of containerships, This is the second time that we have had to discuss this name.

A few weeks ago we had to tell you why the stock was rallying, and it was on the back of a reverse split. Now Diana Containerships stock is rallying for another reason. It is rallying because it just reported earnings.

Well the company reported a net loss of $8.7 million for the third quarter of 2017, compared to a net loss of $126.8 million for the same period of 2016. The loss for the third quarter of 2016 reflected the result of impairment charges for seven of Diana Containerships’ vessels.

Time charter revenues, net of prepaid charter revenue amortization, were $6.7 million for the third quarter of 2017, compared to $8.0 million for the same period of 2016, mainly due to the sale of the vessels Angeles in November 2016 and Doukato in June 2017.

This decrease was counterbalanced by the increase of revenues generated by the improvement of Diana Containerships’ fleet utilization and the decrease of off-hire days in the third quarter of 2017 compared to the same period of 2016.

Net income for the nine months ended September 30, 2017 amounted to $20.4 million, compared to a net loss of $140.6 million for the same period of 2016. The net income for the nine months ended September 30, 2017 reflected a gain from a debt write-off, arising from the settlement agreement with respect to the secured loan facility with the Royal Bank of Scotland plc (“RBS”), which was signed on June 30, 2017.

The specific gain, net of related expenses, amounted to $42.2 million. The loss for the nine months ended September 30, 2016 reflected the result of impairment charges for seven of the Company’s vessels. Time charter revenues, net of prepaid charter revenue amortization, for the nine months ended September 30, 2017, amounted to $16.0 million, compared to $27.7 million for the same period of 2016.

 

Despite the turn around, we feel the rally in Diana Containerships stock should not be touched.

We caution investors against going long such a volatile name.

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