NBR Nabors Industries Ltd

Nabors Industries Ltd. said it swung to a first-quarter loss amid slumping demand and a big write-down of its investment in C&J Energy Services.

The drilling company also warned it expects further weakening in global rig counts and margins despite a recent uptick in oil prices.

Shares fell 6.5% to $9.70 in recent after-hours trading as revenue missed expectations.

A deal that combined C&J Energy Services Inc. with the completion-and-production businesses of Nabors in the U.S. and Canada closed in March 2015. In an unusual deal structure, C&J was the nominal buyer, but Nabors owned 53% of C&J when the deal closed.

"The first quarter's drop in oil prices below $30 led to sharp reductions in customer spending plans on a worldwide basis and had a corresponding adverse impact on our results, "Chairman and Chief Executive Anthony Petrello said in prepared remarks.

"Despite a recent upturn in the price of oil, at its current level, we anticipate further near-term reductions in rig count both internationally and in the U.S.," Chief Financial Officer William Restrepo said. "We also expect margins to deteriorate, particularly in the Lower 48 market."

Like many other companies in the sector, Nabors has cut costs in response to the commodities downturn. Mr. Restrepo on Monday said Nabors continues to execute on its cost-cutting efforts.

Over all, Nabors reported a loss of $398.3 million, or $1.41 a share, compared with year-earlier earnings of $123.6 million, or 42 cents a share, a year earlier. Excluding write-downs related to Nabor's investment in C&J Energy and other items, adjusted per-share loss from continuing operations was 29 cents.

Revenue slumped 70% to $430.8 million. Operating revenue declined 14% to $597.6 million.

Analysts polled by Thomson Reuters expected per-share loss of 34 cents and revenue of $630 million.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

April 25, 2016 17:55 ET (21:55 GMT)

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