- "Commensurate with current seismic industry weakness, our first quarter of fiscal year 2015 faced significant market challenges," says Geospace (NASDAQ:GEOS) CEO Rick Wheeler. An 80% Y/Y drop in exploration-focused traditional and wireless and seismic products took a toll, as did a lack of permanent reservoir monitoring system contracts ($28M was recognized from a Statoil contract a year ago).
- A mix shift towards low-margin products also hurt EPS, as did rental fleet depreciation and low factory productivity. Geospace expects "seismic product gross profit margins to be under significant stress throughout fiscal year 2015 due to expected lower manufacturing activity," and is cutting its FY15 capex budget for its Pinemont facility to $1M-$5M from $15M. The budget for other property and equipment has been cut to $5M-$7M from $10M.
- Cableless OBX ocean bottom nodal products remain a strong point: Over 2,800 OBX stations were rented in FQ1, and over 1,600 are expected to be rented in FQ2.
- FQ1 gross margin was slightly negative thanks to a $21K gross loss (compares with a $47.1M gross profit a year ago). GAAP operating expenses fell 14% Y/Y to $9.9M.
- Shares have made new 52-week lows in morning trading.
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FQ1 results, PR