london (Bloomberg) — Bermuda-based Frontline Ltd., the world's largest operator of supertankers, reported better-than-expected second-quarter profit and warned that earnings will decline after freight rates slumped.

Net income rose to $81.3 million, or $1.04 a share, from $27.8 million, or 36 cents, a year earlier, the company said in a statement last week. It was expected to report profit of $67.5 million, based on the mean of five analyst estimates compiled by Bloomberg. Operating revenue gained 26 percent to $356.1 million.

"Based on the current weakness in the tanker market and the company's trading results achieved so far in the third quarter, the board expects a materially lower result in the third quarter of 2010 than in the second quarter," Frontline said in the statement.

Daily returns from hauling two million-barrel cargoes of Middle East crude oil to Asia slid 87 percent since January 19 to $11,126, according to the London-based Baltic Exchange.