McCoy Corp. (MCB.TO), energy equipment and services provider, reported Tuesday a decrease in first-quarter profit, reflecting lower conventional oil and gas activity in western Canada, amid economic recession.
For the first quarter, net earnings declined to C$0.3 million or C$0.01 per share from C$1.8 million or C$0.06 per share in the previous year.
Revenue for the quarter declined to C$31.0 million from C$35.9 million, reflecting the continued impact of reduced conventional oil and gas activity in western Canada on the Trailer Manufacturing and Truck & Trailer Products & Services segments.
Energy Products & Services segment generated revenue of C$22.2 million compared to C$22.1 million in the prior-year period, and was impacted by weakening of global drilling equipment sales, offset by the inclusion of one month of sales from newly acquired Texas Breakout II, L.P., which operates as RP Manufacturing & Calibration, or RP.
Jim Rakievich, McCoy's chief executive, said, "The North American drilling industry has been hit particularly hard and this has resulted in the capital equipment expenditures of these customers being cut back significantly. In the United States, the number of active rigs has been reduced by 50% in the last 12 months. Until we begin to see a recovery in these numbers, our sales in the North American market will be weak."
McCoy expects reduced demand for its manufactured products in 2009 due to the global slump and low oil and gas commodity prices.
The company also said that it implemented major work force reductions with the elimination of nonessential expenses in order to cut salaries and commissions, operations expense and corporate services expense.
MCB.TO is currently trading at C$1.36, up $0.01 or 0.74%, on the Toronto Stock Exchange.
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