Newpark Resources Inc., which treats and disposes of oilfield waste, said Tuesday it expects to post a loss in the first quarter, citing a sharp slowdown in U.S. oil production and intense competition.
It predicts a net loss of between 8 and 12 cents per share for the period, with revenue of $120 million to $130 million. Analysts polled by Thomson Reuters expect a profit of 9 cents per share on revenue of $198 million, though analysts generally exclude one-time items in their forecasts.
"The first three months of 2009 are proving to be an extremely difficult market for oil service companies in North America," President and Chief Executive Paul Howes said. He noted the U.S. rig count was down 47 percent last week compared to its peak last September.
"This significant decline in rig activity combined with aggressive bidding from our competitors on new and existing work is causing a correlating drop in revenue and compression of margins," he added.
The company has slashed staff numbers, implemented salary and wage freezes and cut overall spending in hopes of balancing out lower demand. Newpark estimates it saved $40 million last year from the changes.
This year, the company said it will work to cut transportation and materials costs.
Newpark said its international business -- including the Mediterranean, Middle East and Brazil -- is robust.
Shares of Newpark ended Tuesday down 44 cents, or 15 percent, at $2.55.
source: yahoo
It predicts a net loss of between 8 and 12 cents per share for the period, with revenue of $120 million to $130 million. Analysts polled by Thomson Reuters expect a profit of 9 cents per share on revenue of $198 million, though analysts generally exclude one-time items in their forecasts.
"The first three months of 2009 are proving to be an extremely difficult market for oil service companies in North America," President and Chief Executive Paul Howes said. He noted the U.S. rig count was down 47 percent last week compared to its peak last September.
"This significant decline in rig activity combined with aggressive bidding from our competitors on new and existing work is causing a correlating drop in revenue and compression of margins," he added.
The company has slashed staff numbers, implemented salary and wage freezes and cut overall spending in hopes of balancing out lower demand. Newpark estimates it saved $40 million last year from the changes.
This year, the company said it will work to cut transportation and materials costs.
Newpark said its international business -- including the Mediterranean, Middle East and Brazil -- is robust.
Shares of Newpark ended Tuesday down 44 cents, or 15 percent, at $2.55.
source: yahoo
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