Two shares are set to open on an opposite direction on Wednesday. While Mitcham Industries (Nasdaq: MIND) shares are likely to test 52-week high after the impressive fourth quarter earnings results, Williams Partners LP's (NYSE: WPZ) stock is likely to see downside pressure after announcing an underwritten public offering.
Mitcham industries reported that its fourth quarter net income jumped to $10.2 million or 77 cents a share from $1.8 million or 17 cents a share in the year-ago quarter. Similarly, net revenues climbed 88 percent to $37.0 million from $19.7 million in the previous quarter. Revenues were driven by an 87 percent jump in equipment leasing to $23.7 million from $12.7 million in the year earlier quarter.
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Both earnings and revenues were way ahead of Street analysts' estimations of 57 cents a share on revenues of $31.07 million. In the third quarter, the company's earnings were significantly higher than Street consensus. While Mitcham delivered 52 cents a share, analysts were expecting 22 cents a share.
More than the earnings, the company could realize major increases in price realization as evidenced by gross margins jumping eleven percentage points to 57 percent from 46 percent.
Interestingly, analysts' have raised their EPS estimate on Mitcham to 78 cents a share for the first quarter from 69 cents a share within two months. Also, no analyst recommends the stock as a Sell. All analysts have a Buy or Hold rating on the company's shares.
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For the three brokers covering MIND, the highest price target is $36.00, and lowest target is $25.00. Their mean and median price target is $29.67 and $28.00 respectively. For the 52-week period, the stock touched a high of $26.76 and a low of $9.52. The yearly high price is 10.9 percent lower than analysts' mean price target and 4.6 percent lower than median target.
Williams Partners, Wednesday could be a tough day. The trend was already visible when its stock witnessed $2.04 or 3.6 percent fall to finish the Tuesday's extended hours of trading at $54.26. This follows after the company announced a public offering of 9 million to fund its $2.5 billion acquisition of a Cairn Energy subsidiary.
Last month, the company disclosed that it was acquiring Cairn Energy's pipeline infrastructure to extend its coverage in the Marcellus Shale region. Williams Partners estimates that the facility could offer natural gas worth 300 trillion cubic feet within 35 mile radius of the gathering system.
Normally, whenever a company announces a public offering or secondary offering, shares of the company tend to fall for two primary reasons. One is that it could dilute existing share value and more stock will be available thereby reducing demand.
For the 52-week period, the stock reached a high of $65.39 and a low of $45.39.