Geospace Technologies (NASDAQ:GEOS) today announced net income of $3.8 million, or $0.29 per diluted share, on revenues of $40.7 million for its fiscal quarter ended June 30, 2014. This compares with a net income of $17.0 million, or $1.31 per diluted share, on revenues of $78.1 million for the comparable quarter last year.
For the nine months ended June 30, 2014, the company recorded revenues of $210.6 million and net income of $38.7 million, or $2.95 per diluted share. For the comparable period last year, the company recorded revenues of $232.3 million and net income of $55.9 million, or $4.32 per diluted share.
Walter R. (“Rick”) Wheeler, Geospace Technologies’ President and CEO, said, “In the third quarter of fiscal year 2014, revenues and net income were down by 48% and 78% respectively from last year’s third quarter. This reduction in revenue is attributed to lower demand for our products across all our product segments. In particular, our seismic reservoir products segment exhibited the largest decrease of $31.2 million. This was caused by the completion of the Statoil order in April, wherein only $6.7 million of revenues from the contract appeared in the third quarter. As previously reported, the manufacturing portion of our Statoil contract has come to an end, and we have no permanent reservoir monitoring (PRM) contracts in hand at this time; however, we remain optimistic that our PRM products will contribute significantly to our results of operations in the future. While we have no such contracts at this time, we are aware of a number of operators around the world who are considering PRM systems for their fields. We believe we are the world leader in the design and construction of such systems.”
“Sales of our traditional and wireless products saw respective declines of roughly 8% and 24% compared to the third quarter last year. Lower demand in both of these product segments is a direct reflection of reduced exploration activity experienced by the seismic industry during the first half of calendar year 2014, especially in North America. As seismic acquisition contractors consolidate and stack their crews in response to diminished backlog, their needs for our equipment drop. And while some of our customers forecast improved activity in the second half of 2014, we expect demand for these products to remain soft through the end of the fiscal year, as demands for new equipment often lag such activity improvements. We are nonetheless well positioned for sales and rental opportunities in this reduced market when contractors look to reduce costs and gain the efficiencies that our equipment provides over legacy cabled systems. For the third quarter, we sold almost 8,000 GSX channels comprised mostly of used channels from our rental fleet. We also sold 200 OBX stations to a Russian customer. Customer interest, quote inquiries, and in-field testing and utilization of our cableless OBX ocean bottom system continue to rise. Currently, we have 3,300 OBX stations rented and utilized on a job in Alaska.”