Major Drilling Slumps After Cutting Sales Outlook: Toronto Mover
Major Drilling Group International Inc. (MDI), a provider of mineral-drilling services, fell the most in four years after saying fiscal fourth-quarter revenue will be lower than previously expected.
The shares dropped 12 percent to C$10.58 at 10:48 a.m. in Toronto. The Moncton, New Brunswick-based company earlier fell as much as 19 percent, the most intraday since December 2008.
Major Drilling said in November that activity in the quarter ended April 30 would be “consistent” with the fiscal second quarter. The outlook has worsened, it said yesterday after the close of regular trading.
“Subsequent to the holiday season, there have been increased delays in the decision making process on the part of many of the company’s senior customers in regards to their 2013 exploration drilling programs,” Major Drilling said in a statement.
Some of the world’s largest mining companies are reducing spending amid concern about rising production costs, while smaller exploration and development companies face difficulty raising capital.
Sam Crittenden, an analyst at RBC Capital Markets in Toronto, cut his rating on the stock to hold from buy “given near-term uncertainty over pricing and activity levels in the drilling market,” he said today in a note.
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