Drybulk carrier Paragon Shipping Inc. said Tuesday that profit and sales fell during the third quarter amid a downturn in shipping that led to lower charter rates.

The company said it earned $18 million, or 40 cents per share, compared with $18.9 million, or 69 cents per share, a year earlier. Excluding special non-cash items including depreciation linked to below-market charter rates on acquired vessels, the company said it would have earned $15.1 million, or 33 cents per share, in the latest period.

Revenue fell to $40.1 million from $43.6 million a year ago.

Analysts, who usually exclude items from their calculations, had expected earnings of 30 cents per share on $34.8 million in revenue.

The company operated 12 vessels during the third quarter and earned an average time charter equivalent rate of $34,687 per day. A year earlier, the average rate was $40,250 per day.

Paragon said it agreed last week with STX Panocean Co. Ltd. on a new agreement for a vessel covering 23 to 25 months at a gross daily charter rate of $13,700.

Chairman and CEO Michael Bodouroglou said he expects 2010 "to be another challenging year for drybulk shipping."

Bodouroglou said the company had set its ship-chartering strategy to make revenue and cash flow more predictable. He said this gives the company confidence to invest in growth "as the right opportunities present themselves."

Paragon shares rose 7 cents to $4.46 in regular trading, then gained another 4 cents to $4.50 in extended trading after the results were released.