ION Geophysical Corporation (NYSE:IO) Stock Falls 22% In a Week After Earnings

ION Geophysical Corporation (NYSE: IO) is down 22% in a week. Recently the company announced that it expects Q3 2021 revenue to range from $44 million to $45 million, representing a 125% QoQ and 175% YoY increase.

Market Reaction

On Tuesday, IO stock went down 1.54% at $1.92 with more than 1.08 million shares, compared to its average volume of 4.31 million shares. The stock has moved within a range of $1.8200 – 1.9400 after opening the trade at $1.91.

Earnings Recap

Additionally, the company is anticipating that its adjusted EBITDA will grow sequentially, ranging from $21 million to $22 million. At the end of the quarter, the company’s liquidity improved to $35 million, comprising cash of 424 million and remaining borrowing capacity of $11 million under a revolving credit facility. In addition, the E&P Tech and Services backlog was around $12 million, boosted by the underwritten phase of ION Geophysical Mid North Sea High 3D multi-customer program.

CEO Chris Usher said that Q3 revenues grew considerably consistent with the company’s expectation of growing momentum for the rest of the year. Usher said that while segments of the company’s business showed robust sales, that is attributed to the execution of the 3D strategy. So in the coming days, investors should watch IO.

Key Quote

“Third quarter revenues increased significantly, consistent with our expectations of momentum building as the year progresses,” said Chris Usher, ION’s President and CEO. “While both segments of our business demonstrated stronger sales, the increase is primarily attributable to execution of our 3D strategy. Despite the challenging backdrop, we have been able to increase our multi-client market share by approximately 50% through a purposeful focus on new 3D assets. More than half of the revenue generated this quarter stemmed from 3D data sales, both from the two new acquisition campaigns in the North Sea as well as our immense, artfully remastered reimaging program offshore Brazil. We are accelerating efforts to secure large-scale multi-million-dollar maritime digitalization projects for port management, maritime monitoring, and energy logistics while deferring longer-wavelength defense and port security ambitions. Our team has also made good progress towards the $15-20 million annual cost savings target we announced in August, building on the over $40 million eliminated in 2020.”

Traders Review

IO stock is trading below 20-Day and 200-Day Moving averages of $1.97 and $2.05 respectively. However, the stock is trading above the 50-Day moving average of $1.63. The stock is up 36% over the past month.


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