CHICAGO, Sept. 2, 2011 /PRNewswire/ -- Zacks Equity Research highlights Cabela's Inc. (NYSE: CAB) as the Bull of the Day and McDermott International (NYSE: MDR) as the Bear of the Day. In addition, Zacks Equity Research provides analysis DryShips Inc. (Nasdaq: DRYS), Diana Shipping Inc. (NYSE: DSX) and Excel Maritime Carriers Ltd. (NYSE: EXM).

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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.

Here is a synopsis of all five stocks:

Bull of the Day:

Cabela's Inc.'s (NYSE: CAB) second-quarter 2011 earnings of $0.32 per share beat the Zacks Consensus Estimate of $0.27, and jumped 14.3% from the prior-year quarter. The quarter witnessed healthy revenue growth and profitability at its retail segment, sturdy performance at Cabela's CLUB Visa program, strong merchandise gross margin and increased market share.

Merchandise gross margin expanded 80 basis points to 36.7% during the quarter. Management reiterated its long-term goal of increasing the margin by 200-300 basis points, and continues to expect fiscal 2011 earnings to meet or beat consensus.

The company also remains focused on alleviating bad debt risk in its credit card business. The gradual improvement in the economy has lowered delinquencies and charge-offs.

Bear of the Day:

Following a second quarter earnings miss, we are downgrading McDermott International (NYSE: MDR) shares to Underperform from Neutral. The company recently reported lower-than-expected EPS for the June quarter, adversely affected by a less favorable geographic mix and weak margins in the Middle East.

Near-term bookings remain lumpy at McDermott, as the current uncertain environment has hurt the economics of building new oil and gas infrastructure. Additionally, the transfer of the power generation and government operations has left McDermott with a less diversified business, thereby heightening its risk profile.

These factors are reflected in our downgrade of the company's shares. Our $12 price objective reflects a 2011 P/E multiple of 10.1x.

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DryShips Underperforms

DryShips Inc. (Nasdaq: DRYS) declared disappointing financial results for the second quarter of 2011. All of its three reporting segments: (1) Drybulk carrier (2) Oil Tanker and (3) Offshore Drilling, performed poorly in the previous quarter.

Quarterly GAAP net loss was $114.1 million or a loss of 33 cents per share compared with a net income of $19.5 million or 7 cents per share in the prior-year quarter. However, adjusted (excluding one-time charges) EPS in the second quarter of 2011 was 4 cents, significantly below the Zacks Consensus Estimate of 18 cents.

Quarterly total revenue was $224 million, remaining flat year over year, but well below the Zacks Consensus Estimate of $272 million. Quarterly Drybulk carrier revenue was $93.1 million, down 19.2% year over year. Revenue from Drilling contracts was approximately $126.6 million, up 16.2% year over year. Oil Tanker revenue was nearly $4.3 million. Quarterly Time charter equivalent revenue per day for Drybulk carrier was $28,080, down 14% year over year. Quarterly Time charter equivalent revenue per day for Oil Tanker was $16,935.

Quarterly total operating expenses were $270 million, up 127.2% year over year. This was mainly due to higher drilling rigs operating expenses, higher depreciation and amortization charges, and massive vessel impairment charges.

Operating loss in the second quarter of 2011 was $46 million compared with an operating income of $105.4 million in the prior-year quarter. In the second quarter of 2011, adjusted EBITDA (excluding gain/loss from interest rate swaps) was $136.2 million compared with $152.3 million in the prior-year quarter.

At the end of the second quarter of 2011, DryShips had $191.7 million of cash & cash equivalents and $2,122.5 million of outstanding debt on its balance sheet compared with $391.5 million of cash & cash equivalents and $1,988.5 million of outstanding debt at the end of fiscal 2010. At the end of the second quarter of 2011, debt-to-capitalization ratio was 0.39 compared with 0.34 at the end of fiscal 2010.

Recommendation

DryShips fiercely competes with other drybulk carriers, such as Diana Shipping Inc. (NYSE: DSX) and Excel Maritime Carriers Ltd. (NYSE: EXM). We maintain our long-term Neutral recommendation onDryShips. Currently, DryShips has a Zacks #3 Rank, implying a short-term Hold rating on the stock.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

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