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TGS Jumps Most in Eight Months After Sales Guidance: Oslo Mover

TGS Nopec Geophysical ASA, Norway’s second-largest seismic surveyor, climbed the most in more than eight months in Oslo after stronger-than-expected fourth-quarter earnings and guidance boosted its earnings outlook.

TGS rose as much as 7.2 percent, the most since May 3, and traded 6.8 percent higher at 192.7 kroner by 10:30 a.m. in the Norwegian capital. That made the surveyor the third-biggest gainer on the Bloomberg World Energy Index.

The company, based in Asker near Oslo, said preliminary figures show it’s likely to report fourth-quarter revenue of about $280 million, beating the $242 million average of 18 analyst estimates compiled by Bloomberg. It also expects annual revenue to rise to $970 million to $1.1 billion this year, from about $931 million in 2012, TGS said in a statement.

“We conclude from this strong continued sale momentum by TGS that the underlying market drivers are strong,” RS Platou Markets AS analyst Goeran Andreassen said by e-mail. The mid-range guidance implies 2013 earnings before interest and tax of about $465 million, he said. That compares with the $424 million average of 20 analyst estimates compiled by Bloomberg.

Oil and gas producers operating in the waters off Africa, Norway and South America are boosting spending on exploration amid growing energy demand. With established fields maturing and new resources harder to find and develop, demand is growing for the underwater maps collated by companies including TGS, Petroleum Geo-Services ASA and Polarcus Ltd.

‘Higher Valuation’

The “fantastic” guidance shows the TGS model is “very much in favour,” Nordea Securities said today in an e-mailed statement Nordea and Platou have buy recommendations.

TGS has gained 39 percent in the past 12 months, giving it a market value of 19.9 billion kroner ($3.6 billion). That makes it Norway’s largest seismic surveyor after Lysaker-based PGS, valued at 21.8 billion kroner. PGS climbed 2 percent to 100.3 kroner, extending its advance in the last year to 48 percent.

Dolphin Group ASA, another Norwegian seismic surveyor, rose as much as 5.8 percent. The company, which operates a fleet of seven seismic vessels, expects revenue to increase by as much as 50 percent this year, it said today.

“We believe Dolphin is close to fully booked for the year and believe the stock deserves a higher valuation,” Danske Bank AS said in an e-mail. The investment bank has a buy recommendation on Dolphin.

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