September 6, 2011 / 8:29 PM / 7 years ago

UPDATE 2-Major Drilling profit jumps as metal prices surge

* Fiscal Q1 EPS C$0.25 vs C$0.07 a year earlier

* Revenue jumps 50 pct to C$164.2 mln (Adds details on results, CEO comment)

TORONTO, Sept 6 (Reuters) - Major Drilling (MDI.TO) said on Tuesday its quarterly earnings more than tripled as demand for its drilling services soared along with a surge in both precious-metal and base-metal prices.

The company, which is one of the world’s largest providers of contract drilling services to mining companies, said it is seeing strong activity levels in all regions and in all segments.

“Looking at the balance of fiscal 2012, assuming that customers continue with their stated plans, we expect to see continuing growth,” Chief Executive Francis McGuire said in a statement.

“Despite the recent events in the global economy, we have not seen our customers modify their activity patterns. Demand for drilling services continues to grow,” he said, adding that most major and junior mining companies are in much better financial positions now than they were in before the last downturn.

Net income for the company’s fiscal first quarter, ended July 31, rose to C$17.9 million ($18 million), or 25 Canadian cents a share, from a year-earlier profit of C$5.1 million, or 7 Canadian cents a share.

Quarterly gross margins, which disappointed investors in the last quarter, jumped this time around to 31.4 percent from 24.2 percent a year earlier. The gross margin in the previous quarter was 25.4 percent. [ID:nL3E7H82S0]

Revenue rose 50 percent to C$164.2 million.

$1=$0.99 Canadian Reporting by Euan Rocha; editing by Peter Galloway

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