Poseidon Plunges After Profit Falls: Houston Mover
Poseidon fell to C$5 at the close in Toronto, the lowest since the Calgary-based company began trading in November 2011.
Net income in the third quarter fell 45 percent to C$7.8 million ($7.8 million), or 10 cents a share, Poseidon said yesterday in a statement. That’s 38 cents lower than the average of seven analysts’ estimates compiled by Bloomberg. The company said it suffered from a slowdown in oil and natural gas wells being completed in the U.S.
Poseidon was previously known for underpromising and overdelivering, Geoff Ready, an analyst at Haywood Securities in Calgary, said in a telephone interview. He rates the shares at outperform, which means investors should buy the stock, and owns none. “They just blew that all up with yesterday’s release.”
The company reduced guidance for earnings before interest, taxes, depreciation and amortization this year to a range of C$140 million to C$150 million. That’s lower than the C$165 million average of nine analysts’ estimates compiled by Bloomberg. Poseidon also cut capital spending 42 percent to C$35 million.
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