Major Drilling Group International (MDI) Inc., a Canadian drilling company, climbed the most in almost three years after reporting record revenue for the first quarter and raising its dividend.
Shares of Major Drilling rallied 11 percent to C$10.11 at 1:49 p.m. in Toronto, on track for the biggest percentage gain since October 2009.
Yesterday after the market closed, Major Drilling reported revenue of C$237.6 million for its fiscal first quarter ended July 31, up 45 percent compared with a year ago. Earnings per share of 40 Canadian cents came in ahead of consensus estimates of 39 Canadian cents, according to a survey of analysts by Bloomberg.
While overall drilling activities are expected to decline over the next six months, the company said, it anticipates demand for specialized drilling, which represents 76 percent of revenue, will continue through the year ahead. Major Drilling said it plans to reduce capital expenditures for the year because of the expected decrease in overall drilling.
“We continue to believe that Major Drilling Group remains one of the best drillers given its size and large senior client base,” Ryan Hanley, analyst with Mackie Research Capital Corp., said in a note to clients today. “However, we remain cautious on the drilling space as a whole until we have a better handle on 2013 budgets for exploration spending.”
Shares of Major Drilling have plunged 35 percent this year. They fell 14 percent, the biggest drop in more than two years, on Aug. 30 after larger U.S. competitor Boart Longyear Ltd. (BLY) cut its 2012 forecasts and outlook.
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