Major Drilling shares fall on revenue warning

Thu Jan 24, 2013 11:47am EST
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Jan 24 (Reuters) - Shares of Major Drilling Group International Inc fell 19 percent on Thursday after the company said it expected project delays and pricing pressure to significantly hurt its fourth-quarter revenue.

The mine driller on Wednesday said that after the holiday season there have been increased delays by customers on their exploration programs for 2013.

Major Drilling said in November it expected activity levels for the fourth quarter ending April 30 to be consistent with the second quarter. It had posted revenue of C$199.6 million in the second quarter.

"The month of November saw little activity as several customers elected to shut down early, we now expect these shut downs to last well into February," Mackie Research analyst Ryan Hanley wrote in a note. Hanley downgraded the stock to "hold" and cut his price target on it to C$11 from C$12.

RBC Capital Markets also downgraded the stock, while Salman Partners cut its price target.

Shares of Major Drilling, which has a market value of about C$957 million ($958 million), were down 13 percent at C$10.34 in late-morning trading. The stock was one of the top percentage losers on the Toronto Stock Exchange. ($1 = 0.9987 Canadian dollars) (Reporting by Ankur Banerjee in Bangalore; Editing by Maju Samuel)