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Ion Geophysical (IO) Stock Price Gapped Up 57.6% After Upping Its Q3 Earnings Guidance

Updated: 18 Oct 2021

Ion Geophysical Corp (NYSE: IO) stock price gapped up 57.6% after upping its Q3 earnings guidance, which triggered an influx of buyers.

The company, which provides crucial equipment and support services to oil & gas companies, noted that its Q3 2021 revenues would be between $44 and 45 million, a 125% increase to Q2 figures and a 175% jump compared to Q3 2020.

Ion Geophysical, which provides geophysical technology, services, and solutions to the global oil and gas industry, noted that its pretax earnings were set to come in between $21 and $22 million.

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The company had a net liquidity position of $35 million at the end of Q3, with $24 million in cash, including $19 million in cash borrowed from a revolving credit facility. The remaining $11 million is the amount leftover from the credit facility.

ION shares fell after announcing the second phase of its 11,000 sq km North Sea 3D multi-client program in June 2021, as investors largely ignored the news. However, today’s announcement restored investor confidence in the company, as evidenced by the gap up.

The company’s shares are still down 22.22% since January, and many are hoping that today’s rally will last into the future.

Chris Usher, ION’s President and CEO, said: “Third-quarter revenues increased significantly, consistent with our expectations of momentum building as the year progresses. While both segments of our business demonstrated stronger sales, the increase is primarily attributable to the execution of our 3D strategy. Despite the challenging backdrop, we have been able to increase our multi-client market share by approximately 50% through a purposeful focus on new 3D assets.”

Adding:

“More than half of the revenue generated this quarter stemmed from 3D data sales, both from the two new acquisition campaigns in the North Sea as well as our immense, artfully remastered reimaging program offshore Brazil.”

Today’s rally has left IO shares trading way above the 50-day EMA, indicating that the stock is now in an uptrend. However, the gap up could result in a gap-fill move lower in the coming days. Therefore, I would wait a few days before jumping in.

*This is not investment advice. Always do your due diligence before making investment decisions.

ION Geophysical stock price.

Tradingview chart of ION Geophysical stock price 18-10-2021
Source: Tradingview

IO stock price gapped up 57.55% to trade at $2.19, rising from Friday’s closing price of $1.39.

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