Oilfield services provider Complete Production Services Inc. (CPX) on Monday reported a net loss for the third quarter compared to a profit in the year-ago period, hurt by revenues that more than halved from last year, and on charges related to fixed asset impairment.
The company's net loss for the third quarter was $52.03 million, or $0.69 per share, compared to net income of $52.32 million, or $0.70 per share, in the same period last year.
The latest quarter's results include pre-tax, non-cash charges of $41.0 million primarily related to fixed assets. The charges resulted from an ongoing evaluation and rationalization of operations and assets due to significant changes in market conditions that began in the fourth quarter of 2008.
The contract drilling business accounted for about $37.6 million of the total charges, of which $36.2 million related to an impairment analysis done in accordance with U.S. GAAP and $1.4 million resulted from asset disposals. The remaining $3.4 million of the charges occurred within the Completion and Production Services segment and was associated with asset disposals and inventory write-downs.
Excluding these charges, net loss for the quarter was $0.32 per share. On average, ten analysts polled by Thomson Reuters expected the company to report a loss of $0.32 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter dropped 53.49% to $229.91 million from $494.31 million in the prior-year quarter. Analysts had a consensus revenue estimate of $230.67 million for the quarter.
Services revenue for the quarter were $223.43 million, down from $481.07 million a year ago. Products revenue for the quarter declined to $6.48 million from $13.24 million in the same period last year.
Depreciation and amortization expenses for the quarter were $50.38 million, up from $47.72 million a year ago. Fixed asset impairment loss for the quarter was $36.16 million.
Loss from continuing operations for the quarter was $52.03 million, or $0.69 per share, compared to income from continuing operations of $52.47 million, or $0.70 per share, a year ago.
On a segmental basis, revenue for the Completion and Production Services segment during the third quarter fell 52.7% to $198.01 million from $418.87 million in the same period last year. Adjusted EBITDA for the quarter was $31.40 million, down from $133.46 million a year ago.
Drilling services revenues fell 59.1% to $25.42 million from $62.21 million a year ago. Adjusted EBITDA for the quarter was a loss of $3.76 million compared to positive EBITDA of $17.01 million in the prior-year period.
Products revenue for the quarter slipped 51.1% to $6.48 million from $13.24 million in the previous-year quarter. Adjusted EBITDA declined to $1.79 million from $3.39 million in the year-ago period.
For the nine months, the company's net loss was $78.19 million, or $1.04 per share, compared to net income of $125.71 million, or $1.69 per share, in the previous-year period.
Loss from continuing operations for the period was $78.19 million, or $1.04 per share, compared to income from continuing operations of $130.57 million, or $1.76 per share, in the prior-year period.
Revenue for the period dropped 40.7% to $0.80 million from $1.35 million a year ago.
The company said that it has significantly reduced its cost structure and capital expenditures during the quarter. The company reduced its debt by $197.3 million, completely paid down its revolving credit facility, and amended its undrawn credit facility that provides greater certainty it will have access to liquidity beyond the $76.1 million in cash it had as of September 30, 2009.
Looking ahead, Joe Winkler, Chairman and CEO of Complete Production Services said, "While we do not anticipate an improvement prior to year-end, we are seeing indications of future increases in activity. Our focus has now shifted to preparing for the recovery which we believe will be led by horizontal, multi-stage well completions in our core basins."
CPX closed Monday's regular trading session at $10.73, down $0.43 or 3.85% on a volume of 1.25 million.
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