PGS: Warns of an earnings beat

Seismic and reservoir services provider Petroleum Geo-Services (OSE: PGS) foretold second quarter financial numbers as results are what it called ”significantly better than current market expectations”. The marine geophysical company had compared its preliminary consolidated numbers into analyst estimates and says excellent performance of all units means that Revenues, EBITDA, EBIT and Pre-tax profit are all expected to be clearly better than those.

The company awaits revenues above 395 million USD, EBITDA greater than 230 million, EBIT above 75 million and Pre-tax profit of over 55 million $. Full-year EBITDA guidance was raised from approximately 700 million to over 750 million at the same time. This jumpstarted the stock and it closed up by almost 10% on heavy volume on Tuesday.

Petroleum Geo-Services reports

Petroleum Geo-Services (OSE: PGS) highlighted record MultiClient sales driven by GeoStreamer in the second quarter. PGS expects GeoStreamer price premium to increase with the new Geostreamer GS. Revenues were up more than 50% to 326.6 million USD, of which Multiclient’s portion was nearly 160 million. EBITDA for Q2 was 163 million and PGS says it is well on track to reach full year EBITDA guidance of 500 million USD. Order book of 579 million provides half a year visibility on earnings.

Marine Contract business area had a low EBIT margin of 7%, which the company attributes to seasonal factors. There is continued increase in activity and higher prices but also higher fuel costs. Marine Contract full-year EBIT margin is predicted at 10-15%.

PGS says there are significant bid opportunities in West Africa and Brazil. MultiClient has ‘some’ upside for the year. CAPEX will be between 260 and 270 million. PGS is down pretty much in line with the wider market for the day.

Private investor buys heavily into REC

Dagens Naeringsliv writes that Jens Ulltveit-Moe, a famous Norwegian investor and former Chairman of Petroleum Geo-Services (OSE: PGS) has become the largest private shareholder in Renewable Energy Corporation (OSE: REC). Ulltveit-Moe told DN that he has bought further 100 million worth of shares in REC this week on top of his previously acquired 1.42% ownership to reach 2% of total shares.

Renewable Energy Corporation was up 35% for the rest of the week after releasing its interim report this Tuesday. Some of that advance should be as a result of short covering. Norway's Trade Minister Trond Giske is to hold an emergency meeting with local municipalities in connection with REC’s plans of shutdowns in Norway. Ulltveit-Moe tends to agree with the opinion that REC’s production has no future in Norway.

PGS says it will best consolidated market expectations

Oilfield service company Petroleum Geo-Services’ (OSE: PGS) stock gained nearly 9% on Friday. PGS compared its Q2 results due on July 28th to current markets expectations and said they will be significantly above those due to strong MultiClient salesby PGS GeoStreamer.

PGS says total quarterly numbers will be as follows:
Revenue> 310 million $
EBITDA> 150 million $
EBIT> 40 million $

There will be 8 million fair value charge on convertible bond investment in Seabird Exploration Ltd (OSE: SBX) due to share price decline. PGS and Seabird entered strategic cooperation for ocean bottom node solutions for deep water early this year. In connection with it, SeaBird issued a convertible loan toward PGS, which can be converted to ordinary shares in SeaBird.

These numbers are subject to a review. The numbers alone are propably not strong enough to warrant near 10% advance. The full year 2011 EBITDA guidance remains unchanged.