Shares of ION Geophysical Corp. (IO) fell around 8 percent in the after-hours trading on Wednesday after the seismic solutions company reported a decline in third-quarter profit and revenues, that also missed Street projections. Looking ahead, ION Geophysical said it expects a solid fourth quarter.
Third-quarter net income applicable to common share holders was $8.71 million or $0.06 per share, lower than last year's $11.87 million or $0.08 per share.
On average, analysts polled by Thomson Reuters expected earnings of $0.07 per share for the quarter. Analysts' estimates typically exclude one-time items.
Third-quarter revenues decreased 5 percent to $115.65 million from $121.59 million last year, and missed Wall Street analysts' estimated revenues of $123.75 million.
For the quarter, Systems and Software segment revenues increased 25 percent and 12 percent, respectively, while Solutions segment revenues decreased 16 percent.
Consolidated gross margins also declined to 38 percent from prior year's 40 percent.
ION's Chief Executive Officer Bob Peebler said, "As expected, we improved our third quarter results over the first two quarters of 2011, mainly due to the strong performance of our multi-client, marine equipment and Concept software businesses. Compared to last year's third quarter, our results were negatively impacted by reduced data processing sales in the Gulf of Mexico, quarterly lumpiness in our equipment and data library businesses, and the continued negative financial results of the INOVA joint venture."
The company added that its data processing business has been slow to recover from weakness following the Macondo oil spill. But, it sees steady improvement and sufficient pipeline activity to expect a full recovery in 2012.
Looking ahead, ION Geophysical said it expects a solid fourth quarter and anticipate entering 2012 in an excellent position in all of its product and service lines.
The company said the fourth quarter results would reflect revenue from multi-client programs, strong data library sales, the expected recognition of revenue from our twelve-streamer sale to BGP and further improvement in data processing business.
IO closed Wednesday's regular trading session at $7.63, up $0.48 or 6.71 percent. However, in the extended trading, shares fell $0.62 or 8.13 percent to $7.01.
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