Earnings Miss: AKITA Drilling Ltd. Missed EPS By 40% And Analysts Are Revising Their Forecasts

As you might know, AKITA Drilling Ltd. (TSE:AKT.A) last week released its latest third-quarter, and things did not turn out so great for shareholders. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CA$46m missed by 18%, and statutory earnings per share of CA$0.03 fell short of forecasts by 40%. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

See our latest analysis for AKITA Drilling

Taking into account the latest results, the most recent consensus for AKITA Drilling from single analyst is for revenues of CA$259.0m in 2025. If met, it would imply a huge 46% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 566% to CA$0.35. Before this earnings report, the analyst had been forecasting revenues of CA$277.0m and earnings per share (EPS) of CA$0.45 in 2025. The analyst seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

It'll come as no surprise then, to learn that the analyst has cut their price target 21% to CA$2.75.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analyst is definitely expecting AKITA Drilling's growth to accelerate, with the forecast 35% annualised growth to the end of 2025 ranking favourably alongside historical growth of 9.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.0% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect AKITA Drilling to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for AKITA Drilling. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for AKITA Drilling that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.