Technology-focused seismic solutions company ION Geophysical’s (IO) robust pipeline of 3D program opportunities and rapid advancement in the Mid North Sea High program have positioned it well in its niche market. However, the recent dip in crude oil prices could affect its customers' offshore capital spending programs, thereby negatively impacting its growth. Also, investor concerns about rising COVID-19 cases, which could again threaten global demand, could cause the stock price to decline more. Let’s discuss.Asset light global technology company ION Geophysical Corporation (IO) offers data-driven decision-making, acquisition equipment, and processing services to offshore energy, and ports, and defense industries internationally. The Houston, Tex., company operates through E&P Technology & Services and Operations Optimization segments.
Closing yesterday’s session at $1.54, the stock is trading 71.2% below its $5.35 all-time high. Furthermore, the stock’s price has declined 36.6% so far this year and 24.1% over the past month. IO is currently trading below its $2 and $2.82 respective 50-day and 200-day moving averages, which indicates a downtrend.
IO recently announced its preliminary financial outlook for the second quarter of 2021. It expects its revenues to be approximately $20 million, which represents a 13% decline year-over-year. Although the company has been making solid progress in its new 3D program in the North Sea, significantly lower multi-client data sales and a significant drop in crude oil prices, on OPEC and its allies’ recent agreement to increase output, could maintain the stock’s volatility in the coming months.