Ion Geophysical Corp. on Thursday said it expects fourth-quarter revenue to drop up to 31 percent and its full-year results to miss analyst estimates, due to the rapid slowdown in North American and Russian energy markets and a pull back in year-end data library sales.
Shares of the company, which generates seismic data for oil and gas companies, slumped on the news, falling $1.52, or 36.4 percent, to $2.65 in morning trading. The stock has ranged between $2.14 and $18.26 over the last 52 weeks.
Ion Geophysical predicted fourth-quarter revenue between $145 million and $165 million, compared with revenue of $209.4 million in the 2007 period.
For the full year of 2008, Ion Geophysical estimated revenue of $685 million to $705 million, compared with $713.1 million in 2007. The estimate is well below its prior forecast of $780 million to $830 million in revenue, and Wall Street's expectations of $775.6 million, according to Thomson Reuters.
Ion Geophysical also expects its full-year 2008 earnings to miss its original forecast of 70 cents to 80 cents per share. 2008 results include one-time and restructuring charges, which the company said could materially change between now and February, when final results will be reported.
Additionally, Ion Geophysical said due to the complexity of closing the books, it is unable to provide a new earnings per share outlook for 2008.
Robert Peebler, chief executive, described the results as "disappointing but not totally surprising" considering the shutdown of credit markets and collapse of oil and natural gas prices.
"All of this has created a great amount of uncertainty regarding many energy companies' capital spending plans and a very conservative response by many of our contractor customers," Peebler said.
Looking ahead, Peebler said he is "not optimistic that our land systems business will recover in either North America or Russia in the short term." The company has accelerated the consolidation of its ARAM and traditional ION land systems business with aggressive cost reductions that are expected to be finalized during January 2009.
The company also warned its fourth-quarter revenue may be hurt and said it might book restructuring charges in the quarter.
On the bright side, despite an overall slowdown in systems business units, Peebler expects a healthy marine and geophone business, continued growth in data processing and a strong year in new ventures and multi-client business.
Terms & Conditions
RSS Headlines
Fool UK