CGG (Hold, TP: EUR1.60) - Mixed report, EBITDA below
CGG did not meet the high expectations with Q1 segment EBITDA at USD53m, below consensus of USD75m and our estimate at USD79m. The main deviation reflected lower multi-client revenues and higher contract cost. The company’s market comments were somewhat mixed as it expects improved volumes in multi-client, processing and equipment, while contract market remains challenging with deteriorated pricing conditions. Given that the shares have been strong ahead of the results, we expect the share price to underperform peers today.CGG is a global participant in the geophysical seismic industry. Co. manufactures geophysical equipment and provides marine, land, and airborne data acquisition services. Co. also provides geosciences services, including data imaging, seismic data characterization, geosciences and petroleum engineering consulting services, and collecting, developing and licensing geological data. Co.'s clients are in oil and gas exploration and production industies. Co. divides its activities into four segments: Equipment, Contractual Data Acquisition, Geology, Geophysics and Reservoir (GGR), and Non-Operated Resources, including eight business lines, six Corporate functions, and four Group Departments.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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