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Input/Output Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 7, 2012 04:33PM

Input/Output Inc. (IO) filed Quarterly Report for the period ended 2012-06-30. Ion Geophysical Corp has a market cap of $1.07 billion; its shares were traded at around $6.99 with a P/E ratio of 24.5 and P/S ratio of 2.4.



Highlight of Business Operations:

Solutions — Net revenues for the Current Quarter increased by $23.0 million, or 47%, to $72.0 million, compared to $49.0 million for the Comparable Quarter. This increase was predominantly driven by (i) improved data processing revenues due to post-Macondo recovery in the Gulf of Mexico and continued international expansion and (ii) by higher GeoVentures revenues related to projects in areas such as North American and Poland shale plays, as well as offshore Africa, Latin America, Australia, and the Arctic. Gross profit increased by $17.7 million to $28.9 million compared to $11.2 million in the Comparable Quarter and gross margins increased to 40% up from 23% in the Comparable Quarter. These increases resulted from (i) a higher volume of revenues from data processing, and (ii) higher volumes of revenues and more favorable sales mix relating to higher-margin data library sales and GeoVentures new venture projects.

Systems — Net revenues for the Current Quarter decreased by $6.7 million, or 23%, to $22.8 million, compared to $29.5 million for the Comparable Quarter. Gross profit for the Current Quarter decreased by $5.9 million to $9.2 million, representing a 40% gross margin, compared to $15.1 million, representing a 51% gross margin, for the Comparable Quarter. The decrease in revenue and gross margins in our Systems segment was primarily due to lower volumes of sales for towed streamer positioning equipment. Our Current Quarter’s sales of repair and replacement towed streamer positioning equipment increased compared with those for the Comparable Quarter, but this increase was more than offset by a decrease in new equipment sales as a result of a lack of new vessel introductions during the second quarter of this year. In addition, we delivered a large ocean bottom cable system in the Current Quarter. The revenues from this system will be recognized over an extended period under a multi-year arrangement.

Software — Net revenues for the Current Quarter slightly increased by $0.3 million, or 3%, to $10.4 million, compared to $10.1 million for the Comparable Quarter. Excluding the effects of foreign currency translation, revenues increased 6% during the Current Quarter. This increase was principally due to continued demand for the Orca and GATOR software platforms. Gross profit of $7.8 million for the Current Quarter increased $0.5 million over the Comparable Quarter, and gross margins increased to 75% up from 73% in the Comparable Quarter. This increase was due to changes in product mix (there was a relative increase in software sales during the Current Quarter compared to the Comparable Quarter, which have higher margins than the associated hardware sales for this segment).

Solutions — Net revenues for the Current Period increased by $31.2 million, or 29%, to $138.1 million, compared to $106.9 million for the Comparable Period. This increase was predominantly driven by (i) improved data processing revenues due to post-Macondo recovery of exploration and production activities in the Gulf of Mexico and continued international expansion and (ii) higher GeoVentures revenues related to projects in areas such as North American and Poland shale plays, as well as offshore Africa, Latin America, Australia and the Arctic. Gross profit for the Current Period increased by $23.4 million to $47.9 million compared to $24.5 million gross profit for the Comparable Period and gross margins increased to 35% up from 23% in the Comparable Period as a result of (i) a higher volume of revenues in data processing, and (ii) higher volumes of revenues and more favorable sales mix relating to higher-margin data library sales and GeoVentures new venture projects.

Systems — Net revenues for the Current Period increased by $6.1 million, or 11%, to $59.5 million, compared to $53.4 million for the Comparable Period. This increase was primarily due to higher sales of sensor geophone strings, as well as improved ocean bottom cable sales, and was offset by lower volumes of towed streamer positioning equipment. We also had one large ocean bottom cable transaction in the Current Period that is accounted for as a lease where revenue will be recognized over the period from the Current Quarter to the end of 2014. Gross profit for the Current Period decreased by $2.3 million to $25.0 million, representing a 42% gross margin, compared to $27.4 million for the Comparable Period, representing a 51% gross margin. The decrease in gross margins in our Systems segment was primarily due to reduced sales of towed streamer positioning equipment, which carry a higher margin, increased sales of certain types of ocean bottom cables that carry a lower margin, and increased sales of lower-margin sensor geophone strings.

Read the The complete Report



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