Geophysical services provider Compagnie Générale de Géophysique-Veritas S.A. (CGV) reported Tuesday a sharp decline in third-quarter profit, reflecting a 31% drop in revenues and the absence of a higher margin backlog that benefited prior-year results.
For the third quarter, net income dropped to $12.2 million or $0.07 per American Depository Share, or ADS, from $161.7 million or $1.14 per ADS in the previous year.
In Euro terms, net income declined sharply to €8.4 million or €0.05 per share from €105.4 million or €0.74 per share in the previous year.
Group operating income decreased 78% to $57.7 million from $265.1 million, and in Euro currency, declined 76% to €40.7 million from €172.8 million in the prior-year quarter.
Group revenues for the period shrank 31% to $731.4 million from $1.06 billion in the third quarter of the prior fiscal year, primarily reflecting weak market conditions. In Euro terms, revenues reduced 26% to €512.2 million from €691.6 million.
Segment-wise, Sercel revenue dipped 35% to $203.3 million from $313.5 million, while Services revenue slid 25% to $570.9 million from $761.7 million in the third quarter of fiscal 2008.
Further, CGG noted that Marine contract revenue declined 15% in dollars, Land contract revenue came down 35%, chiefly in North American land as activity remained slow with gas prices continuing to stagnate.
Processing & Imaging revenue edged up 1% as performance and demand for the company's high-end innovative imaging products, particularly in the Gulf of Mexico remained strong.
Multi-client revenue slid 46% year-over-year, as multi-client marine revenue fell 54% and multi-client land revenue decreased 16%. Income from Equity Investments for the quarter was $4.0 million, compared to loss of $0.9 million in the past year.
The company also revealed that fleet reduction from 27 to 20 vessels was in progress, with three 3D vessels decommissioned so far.
Commenting on the results, Robert Brunck, chief executive of CGG, said, "As expected, the positive contribution of higher margin 2008 backlog coming to an end, led to a more difficult quarter."
For the nine-month period, net income plunged to $50.4 million or $0.29 per ADS from $338.5 million or $2.38 per ADS in fiscal 2008. Net income before restructuring costs was $106.2 million or $0.66 per ADS for the year-to-date period in 2009.
In Euro terms, net income dropped to €37.0 million or €0.22 a share, from €221.2 million or €1.55 a share in the past year. Before restructuring costs, net income for the year-to-date period in 2009 was €78.7 million or €0.49 per share.
Group revenue for the nine-month period came down to $2.36 billion from $2.81 billion in the same period last year. In Euro currency, revenues decreased to €1.73 billion from €1.84 billion.
CGV closed Monday's regular trading hours at $22.44 on the NYSE.
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