How Will Mitcham Industries (MIND) Stock React To Its Earnings Report?

NEW YORK (TheStreet) -- Mitcham Industries Inc.  (MIND) released its 2015 first quarter earnings report after the market close on Tuesday, showing a decline in revenue and net income.

The company, which sells and leases geophysical and other equipment used by seismic data acquisition contractors, said net revenue was $25.7 million for the most recent quarter, compared to $27.3 million for  the same period last year.

Net income was $3.7 million, or 29 cents per diluted share, compared to $6.3 million, or 48 cents per diluted share for the 2014 first quarter.

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Shares of Mitcham Industries closed lower -1.09% to $13.16 on Tuesday.

Separately, TheStreet Ratings team rates MITCHAM INDUSTRIES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate MITCHAM INDUSTRIES INC (MIND) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MIND's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.68, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for MITCHAM INDUSTRIES INC is rather high; currently it is at 65.78%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.53% trails the industry average.
  • MIND, with its decline in revenue, underperformed when compared the industry average of 11.2%. Since the same quarter one year prior, revenues fell by 16.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to $2.53 million or 68.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market, MITCHAM INDUSTRIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: MIND Ratings Report
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