By Tess Stynes
Nabors Industries Ltd. (NBR) swung to a fourth-quarter profit as
the oil-and-gas drilling contractor reported fewer losses from
discontinued operations, though the company's performance also was
hit by a slowdown in North American onshore activity.
Shares were down 1.6% at $17.71 in recent after-hours trading as
the company also predicted a marked decline in first-quarter income
given low rig counts and depressed spot market rates. Through
Tuesday's close, the stock is up 25% this year.
Oilfield-services companies saw their margins in North America
squeezed last year as a shift toward working in higher-cost
oil-rich areas and declining demand for natural-gas drilling kept
prices for their work low. Many of their customers--exploration and
production companies--pulled back on activity during the fourth
quarter so as not to exhaust their budgets for the year.
Last month, rivals Halliburton Co. (HAL) , Schlumberger Ltd.
(SLB) and Baker Hughes Inc. (BHI) reported that their
fourth-quarter earnings fell amid a slowdown in North American
onshore activity.
"As we anticipated, the fourth quarter reflected weaker market
conditions, including a near suspension of pressure pumping work in
late December that continued into early January," said Chairman and
Chief Executive Tony Petrello on Tuesday.
Mr. Petrello also noted that Nabors moved ahead on strategic
goals including a streamlining of its business and improving its
financial flexibility. "The consolidation of our U.S. well
servicing and pressure pumping operations continues and is
beginning to show meaningful cost and performance improvements,
although obscured by the weaker market environment," he said.
Nabors reported a profit of $27.8 million, compared with a
year-earlier loss of $105.1 million. On a per-share basis, which
excludes preferred dividends impacts, earnings were nine cents,
compared with a year-earlier loss of 36 cents. The latest period
included 35 cents in losses from discontinued operations related to
further write-downs and reserves related to operations in British
Columbia. Excluding net gains on asset dispositions and other
impacts, adjusted earnings from continuing operations were at 44
cents.
Revenue decreased 7.8% to $1.6 billion.
Analysts polled by Thomson Reuters most recently projected
earnings of 29 cents on revenue of $1.66 billion.
In the latest quarter, Nabors's U.S. lower 48 land-drilling
business, its largest segment, reported adjusted operating earnings
were down 27%, while its completion and production services segment
saw adjusted operating profit drop 50% amid weakness in the
domestic pressure-pumping business.
Write to Tess Stynes at tess.stynes@dowjones.com
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