By Tess Stynes
Nabors Industries Ltd. swung to a fourth-quarter loss as the
contract drilling company posted big asset write-downs and other
one-time charges that offset year-to-year revenue growth.
Chairman and Chief Executive Anthony G. Petrello said that
despite the initial effects of the weakening environment, Nabors'
drilling operations posted a quarter-to-quarter improvement in
operating income, primarily attributable to new rig deployments and
the seasonal ramp-up in Alaska, as well as in Canada. Nabors'
international drilling segment also benefited from new rig
deployments and recent contract renewals, Mr. Petrello said.
However its rig services and completion and production services
operations were hurt by lower activity and increased pricing
competitiveness compared with the previous quarter, he added.
In recent months major oil-field services companies including
Halliburton Co., Schlumberger Ltd., and Weatherford International
have announced plans for thousands of layoffs as they try to cope
with weakened demand resulting from a sharp downturn in energy
prices.
Bermuda-based Nabors, which drills oil and natural-gas wells for
clients, previously had streamlined its operations and cut costs,
to refocus on its drilling businesses.
On Monday, Mr. Petrello said Nabors is confident in its ability
to manage through the downturn and is taking numerous actions aimed
at lowering costs "in ways that do not inhibit our core
capabilities and flexibility. For example, we have significantly
scaled back our pace of new U.S. rig construction and will make
further adjustments based on the outcome of ongoing discussions
regarding additional rig awards."
Overall, Nabors reported a loss of $891.1 million, or $3.08 a
share, compared with a year-earlier profit of $150.6 million, or 50
cents a share. Excluding one-time charges and write-downs related
to the industry downturn and its pending deal with C&J Energy
Services Inc. totaling roughly $1.2 billion, earnings from
continuing operations were 33 cents. Revenue increased 11% to $1.78
billion.
Analysts polled by Thomson Reuters expected per-share profit of
39 cents and revenue of $1.83 billion.
Last month Nabors and C&J Energy Services Inc. reached an
agreement to reduce the price of C&J Energy's nearly $3 billion
cash-and-stock deal for one of Nabors' units by $250 million. As a
result, the cash portion paid to Nabors in the deal will decline by
about 27% to $688 million from $938 million, a move that is
expected to reduce the amount of debt used to finance the
transaction.
The transaction will combine C&J with Nabors'
completion-and-production businesses in the U.S. and Canada, which
help companies get their wells ready to pump oil and natural
gas.
Shares fell 3.1% to $12.15 in recent after-hours trading.
Write to Tess Stynes at tess.stynes@wsj.com
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