Danaos Corporation released its third‑quarter 2025 financial results, reporting adjusted net income of $124.1 million and diluted earnings per share of $6.75. The company’s total operating revenue for the quarter was $260.7 million, a $3.1 million (1.2%) beat over the consensus estimate of $257.63 million. The higher revenue was driven by strong demand in the containership segment, while the container‑segment revenue of $239.1 million fell slightly short of expectations, reflecting modest headwinds in charter rates.
Net income for the quarter was $130.6 million, with adjusted net income matching the $124.1 million figure. Operating expenses rose to $52.3 million from $49.9 million year‑over‑year, largely due to higher fuel and crew costs associated with the company’s expanding new‑building program. Despite the cost increase, the company maintained a healthy operating margin of 20.1% on the quarter’s revenue.
For the nine‑month period ending September 30, 2025, Danaos generated $714.7 million in operating revenue and $354.5 million in adjusted net income, translating to a diluted EPS of $19.14 and an adjusted EPS of $19.14. Revenue grew 1.8% year‑over‑year, but margin compression was evident as operating expenses increased in line with the company’s fleet expansion and higher fuel prices.
Danaos raised its quarterly dividend to $0.90 per share, up from $0.85, signaling management’s confidence in the company’s cash‑flow generation and long‑term profitability.
The company issued a $500 million unsecured seven‑year bond at a 6.875% coupon. Proceeds were used to redeem a $300 million 2028 bond and prepay portions of secured bank credit facilities, reducing net debt to $164.5 million and improving the debt‑to‑EBITDA ratio.
Fleet utilization remained strong at 98.1% for the quarter. Danaos added six 1,800‑TEU vessels to its order book, secured 10‑year charters for four of them, and added approximately $236 million to its contracted revenue backlog, bringing the total backlog to $4.1 billion.
CEO Dr. John Coustas noted that operating conditions remained broadly unchanged, with the war in Ukraine continuing and Red Sea transit still disrupted, but he highlighted robust charter market conditions and high demand for midsized and larger vessels. He also emphasized the company’s focus on long‑term charter contracts and its strategic investment in the dry‑bulk Capesize market.
CFO Evangelos Chatzis reported adjusted EPS of $6.75 for Q3 2025, compared with $6.50 in Q3 2024, and highlighted a $745 million increase in the contracted revenue backlog, now at $4.1 billion with a 4.3‑year average charter duration. He underscored the company’s ability to maintain 100% contract coverage for 2025 and 95% for 2026.
Market reaction to the earnings release was negative, with after‑hours trading showing a decline. The miss on both EPS and revenue estimates—$0.38 (5.3%) below consensus and $18.5 million (7.2%) below consensus for the container segment—was the primary driver of the market’s response.
Analysts had expected a consensus EPS of $7.13 and revenue of $257.63 million. The company’s adjusted EPS of $6.75 and container‑segment revenue of $239.1 million represented a miss, while the total revenue beat the consensus by $3.1 million. The discrepancy between segment and total revenue figures highlights the importance of the company’s diversified fleet mix.
The company did not provide new guidance for the next quarter, but management reiterated confidence in its long‑term charter contracts and the strength of its backlog. The dividend increase and debt reduction are seen as positive signals of financial resilience.
Headwinds include ongoing geopolitical tensions in Ukraine and the Middle East, which continue to affect shipping routes and charter rates. Tailwinds are robust demand for mid‑size and larger vessels, a low idle fleet, and the company’s focus on long‑term charters, all of which support a stable growth trajectory.
Despite the earnings miss, Danaos’ strong backlog, high fleet utilization, and dividend increase suggest a resilient business model capable of weathering short‑term market volatility while positioning itself for long‑term growth.
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