NEW YORK (Bloomberg) - Teekay Corp., the worlds largest oil-tanker owner, reported a third-quarter loss of $142.2 million as rates to transport crude dropped during the recession.

The loss was $1.96 a share, compared with net income of $103.1 million, or $1.41, a year earlier, the Hamilton, Bermuda-based company said today in a statement. Teekay was expected to lose 51 cents, based on the average of three analyst estimates compiled by Bloomberg. Revenue fell to $500.4 million from $880.9 million.

The results included gains and losses on items such as derivatives and the sale of vessels and equipment. Excluding these items, Teekay had a loss of $43.4 million, or 60 cents a share. On that basis, the average estimate of 11 analysts compiled by Bloomberg was a drop of 75 cents.

The loss was actually much lighter than analysts, including myself, forecasted, said Jonathan Chappell, a New York-based analyst at JPMorgan Chase & Co. who has an underweight rating on Teekay. The offshore business beat expectations and drove the upside.

Teekay fell 18 cents, or 0.8 percent, to $22.71 in New York Stock Exchange composite trading today. Earlier the shares rose as much as 3.4 percent. Teekay gained 16 percent this year.

CEO Bjorn Moller said in June that he expected shipping rates to be weak until the Organisation of Petroleum Exporting Countries (OPEC), which pumps about 40 percent of the worlds crude, increases output.

Companies that had material exposure to the spot market in the third quarter, which was the worst rate environment in nearly 10 years, are going to lose money, said Chappell. The only companies to remain profitable were those with material time-charter coverage.

Spot, or one-voyage, rates fell 70 percent in the quarter from a year earlier as the most severe recession since the 1930s slashed fuel demand, according to the Baltic Dirty Tanker Index, a measure of rates for vessels of various sizes on routes around the world.

For tanker day rates to recover, world oil demand and OPEC production need to continue to grow, the single hull fleet needs to be scrapped and the industry needs to get past the surge of new building deliveries in 2010, said Scott Burk, a New York-based analyst at Oppenheimer & Co.

Teekay expects operating expenses to increase by $3 million to $4 million due to fleet additions and maintenance, chief financial officer Vincent Lok said in a conference call with analysts on Friday.

About 50 million barrels of crude oil and 100 million barrels of distillate are being stored offshore, accounting for about four percent of the worlds tanker fleet, Mr. Moller said.

The Organisation of Petroleum Exporting Countries cut its member nations production quotas 16 percent since September 2008 to 24.85 million barrels a day. The group forecast in a November 11 report that demand for 2009 will contract by 1.4 million barrels a day to 84.31 million barrels a day.

For 2010 the producer group forecast consumption will increase by 750,000 barrels a day to 85.07 million.

Teekay's Suezmaxes earned an average daily spot rate of $14,878, from $68,161 a year earlier. Aframaxes earned an average daily rate of $9,005, from $46,419. The company operated a fleet of 161 vessels, down from 186 during the third-quarter of 2008.

General Maritime Corp., the second-largest US owner of oil tankers, said in October that third-quarter profit fell 37 percent, to $14.8 million, as demand for shipments dropped due to the recession.

In July, General Maritime chief financial officer Jeff Pribor said he did not see shipping rates improving until 2010 because oil inventories are high and soon-to-be-banned single- hull ships may still be able to operate for 18 months.

Most importantly, we need demand to recover, and we also need heavy scrapping of the single-hull fleet and significant delays or cancellations of new builds, Mr. Chappell said.