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Major Drilling Soars on Record Quarterly Revenue: Toronto Mover

Major Drilling Group International Inc., the Canadian drilling company with operations on six continents, climbed the most in three years after reporting record revenue for the first quarter and raising its dividend.

Major Drilling climbed 12 percent to C$10.20 as of 4 p.m. in Toronto, the biggest gain since May 2009. The stock has plunged 34 percent this year, compared with a 6.7 percent decline among raw-material producers in the Standard & Poor’s/TSX Composite Index.

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. The company posted earnings per share of 40 Canadian cents, exceeding the average estimate of 39 Canadian cents, according to a survey of analysts by Bloomberg.

“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.”

Major Drilling, which is based in Moncton, New Brunswick, boosted its semi-annual payout to shareholders by 11 percent to 10 Canadian cents a share, payable Nov. 1.

Overall drilling activities are forecast to decline over the next six months, the company said. It plans to reduce capital expenditures for the year because of the expected drop, according to a statement. Demand for specialized drilling, which represents 76 percent of revenue, will continue through the year ahead, it said.

Major Drilling fell 14 percent, the biggest drop in more than two years, on Aug. 30 after larger U.S. competitor Boart Longyear Ltd. cut its 2012 forecasts and outlook.

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