Nabors Swings to 2Q Loss on Big Write-Down

Date : 07/24/2012 @ 5:20PM
Source : Dow Jones News
Stock : Nabors Industries Ltd. (NBR)
Quote : 7.88  -0.12 (-1.50%) @ 4:01PM

Nabors Swings to 2Q Loss on Big Write-Down

Nabors (NYSE:NBR)
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Nabors Industries Ltd.'s (NBR) swung to a second-quarter loss as the oil-field services company was hurt by a big write-down and other items.

The oil-field-services sector in North America is being squeezed both by high costs--the result of a migration of drillers from natural-gas-rich areas to more complex, oil-rich formations--and lower prices for their services.

Pressure pumping, a technique that is critical to extracting oil and natural gas from shale, is undergoing a particularly acute crunch.

Chairman and Chief Executive Tony Petrello said the latest period included disappointing results in the company's pressure pumping business, "where lower revenues and higher costs disproportionately affected margins. Similarly, our international unit also fell short of expectations with startup delays and significantly higher costs."

Nabors, the largest global driller of onshore oil and natural gas, reported a loss of $72 million, compared with year-earlier profit of $193.2 million. On a per-share basis, which includes preferred dividend impacts, the loss was 25 cents, compared with year-earlier earnings of 65 cents.

Excluding write-downs related to the reserve valuation in its NFR Energy joint venture and other items, adjusted earnings were up at 38 cents from 24 cents. Revenue increased 19% to $1.61 billion.

Analysts polled by Thomson Reuters most recently projected earnings of 38 cents a share on revenue of $1.74 billion.

Nabors' shares have been hurt by falling natural-gas prices as well as investor concerns about executive perks and severance packages.

Shares were down six cents at $13.96 in light after-hours trading. Through Tuesday's close, the stock is down by nearly half in the past year.

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

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