FreeSeas to Acquire More Ships

Oppenheimer maintains its "perform" rating for FreeSeas Inc (NASDAQ: FREE), while raising its estimates for the company.

Oppenheimer said that FREE posted its Q3 2009 EPS at $0.02, missing the estimates and the consensus expectations, on account of lower-than-expected TCE revenues and higher-than-estimated vessel operating expenses. Oppenheimer expects FREE to sell additional equity and use the proceeds to acquire more ships. The purchase of a secondhand Handysize vessel would be accretive to FREE's annual EPS and EBITDA by $0.04 and $1.9 million, respectively.

FreeSeas vessel operating expenses were higher-than-expected at $5.6K/day on account of several one-time repair costs. According to FREE, vessel opex may stabilize at around $4 million per quarter or $4,500/day.

The EPS estimates for 2010 and 2011 have been raised from -$0.06 to -$0.05 and from -$0.28 to -$0.25, respectively.