ION Geophysical (IO) Misses Q4 EPS by $1.17, Revenues Miss

ION Geophysical (NYSE: IO) reported Q4 EPS of ($0.40), $1.17 worse than the analyst estimate of $0.77. Revenue for the quarter came in at $42.7 million versus the consensus estimate of $71.43 million.

Chris Usher, the Company's President and Chief Executive Officer, commented, "Our fourth quarter financial results were quite disappointing, primarily because we were not able to launch multiple new acquisition multi-client programs and close several data library deals in our pipeline. As a result, our full year results were down slightly, rather than the upward trajectory we had been building towards for 2019, with timing of fourth quarter multi-client deals countering the annual improvements in all our other businesses. Tighter E&P budgetary controls and lower oil prices subdued year-end spending such that several material deals, on the order of tens of millions of dollars, were not completed prior to year-end.

"We are focused on fundamentals and working areas we directly control. We reorganized the business in two ways to improve our execution and accountability; we restructured our E&P Technology & Services segment to reflect our shift in multi-client strategy to include new 3D acquisition, and implemented a significant cost reduction program to lower our operating expenses. We reorganized our new ventures sales organization to accelerate our entry into the 3D new acquisition multi-client market, bringing our projects closer to the reservoir, where capital investment tends to be more consistent and programs have larger scale revenue and earnings potential. ION has rapidly grown our 3D library from almost nothing to 350,000 sq km of seamlessly integrated reimaged data over the last few years, which has given us credibility and experience in the space and led to a pipeline of opportunities for new 3D towed streamer or seabed programs we have not seen before. On the cost side of the equation, we recognize the need to reduce our corporate cost structure. In January 2020, we executed a program that will improve focus and execution on strategic initiatives while delivering annualized savings of over $20 million.

"With that work behind us, I am still as excited about ION and our business as when I took the CEO role. We are aligned around select initiatives that can uniquely position ION in the new industry landscape, which should lead to better financial results. Offshore is picking up and we see material activity among our client base to rebalance portfolios and maximize value, which drives related data sales opportunities to fill customer knowledge gaps. Our E&P Technology & Services team has new focus on 3D new acquisition program opportunities, aligned with our leading imaging capabilities. Our Operations Optimization business is growing steadily and we just secured another Marlin™ SmartPort customer after ramping up our port business development capacity."

For earnings history and earnings-related data on ION Geophysical (IO) click here.

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