The results from the Singapore company, around two-third controlled by state investor Temasek Holdings, come as major container shipping firms flag a better second-half in a global recovery for the industry.
"Going into third quarter, we continue to be positive. I think we are quite close to the peak in terms of volume," said Suvro Sarkar, an analyst at DBS Vickers.
"Third quarter volume should be the peak and things will start to normalise after that. "Next year, the company should remain profitable although it would not be record profits," said Sarkar, who has a buy rating on NOL.
The global shipping industry suffered its worst downturn last year as the economic recession hit exports and forced many companies to lay up ships and cut jobs.
For its second quarter, NOL earned a net profit of $100 million in April-June versus a loss of $146 million a year ago and $98 million in Jan-March.
The profit was ahead of analysts estimates of $31 million with estimates ranging from a loss of $67 million to a profit of $100 million profit.
NOL's second quarter revenue jumped 53 percent to $2.1 billion. In the second quarter, NOL carried 32 percent more cargo over the previous year while its average revenue per forty-foot equivalent container in the first half rose 11 percent from a year ago.
China Containerised Freight Index, a benchmark index for container rate, rose to 1,171.5 points by the end of June from 763.3 points a year ago, when the index hit its lowest level since inception in 1998. In the second quarter, the index rose 4.6 percent.
NOL shares rose as much as 1.4 percent but ended the morning session 1.4 percent lower. As of Thursday, the shares had gained 29 percent so far this year, outperforming the 3 percent rise in the broader Singapore market <.FTSTI>.
Bright Outlook
Ahead of the results, analysts had upgraded profit estimates on NOL by 46 percent over the past 30 days.
"With further improvement anticipated in container shipping volume and rates, NOL Group expects significant improvement in third quarter profits," it said in a statement.
The company had said it would return to profit for the full year of 2010, reversing the $741 million loss it reported last year. Ahead of the results, NOL was expected to report a $70 million profit for the full year, according to analysts polled by Thomson Reuters I/B/E/S.
Asian liner Orient Overseas (International) posted a net profit of $1.28 billion for the first half compared to a loss of $232 million.
In May, the world's largest shipping firm Maersk Line, part of A.P. Moller-Maersk said it expected to return to profit in 2010.
Ron Widdows, NOL's CEO, told reporters the company had redeployed all the vessels that it laid up during the recession.
"All of our assets are employed and thus will remain so as long as the market remains strong," Widdows said.
Last month, NOL said it would acquire $1.2 billion worth of vessels from Korea's Daewoo Shipbuilding & Marine Engineering. (Reuters)
