Headquartered in Houston, TX,
Global Geophysical Services
is a provider of seismic data solutions for exploration and
production companies worldwide.
Declining estimates sent GGS to a Zacks Rank # 5 (Strong Sell) on
November 7, 2013.
Disappointing Third Quarter Results
On November 5, 2012, GGS reported its third quarter results. The
company reported revenues of $70.0 million, Cash EBITDA of $10.2
million and an adjusted net loss of $0.32 per share. The loss was
substantially worse than the Zacks Consensus Estimate of a loss
$0.10 per share.
Following disappointing results, analysts have cut their
estimates for GGS. Zacks Consensus Estimates for the current year
and the next year are currently ($0.60) per share and ($0.67) per
share, down from ($0.09) per share and ($0.40) per share
respectively, 60 days ago.
The following "Price & Consensus" chart illustrates declining
estimates trend for the stock:
High Leverage/Liquidity Concerns
In December, GGS issued $8.0 million of preferred perpetual stock
at 11.5% interest rate. The rate of interest suggests that
investors see this company as a very high risk play.
Further, the company already has a very high debt load. At the
end of third quarter, net debt was $327 million. The company's
interest burden was $8.9 million during last quarter.
While the management has been emphasizing on their focus on
reducing the debt, no progress has been made so far. The company
had breakeven cash flow over the first three quarters of 2013.
GGS's Liquidity and the ability to generate free cash flows
remains a concern as they leave it vulnerable to any downturn in
business or economic conditions.
Some of the recent steps by the company towards altering the
revenue mix and modifying the cost structure may deliver results
in the long-term but near-term issues may keep the stock under
pressure for the time being.
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GLOBAL GEOPHYS (GGS): Free Stock Analysis
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