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Civeo tanks more than 50% on guidance, suspended dividend

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

Civeo shares plunged in premarket trading Tuesday after the firm handed in weak guidance, citing continued weakness in the global commodities markets as major oil companies in reduce 2015 capital spending budgets.

Its shares were down around 52 percent in early trading. (Get the latest quote here.)

Civeo, which provides lodging accommodations for oil and gas workers, paid a quarterly dividend of 13 cents a share earlier this month, but said it would suspend future payments in an effort to maintain financial flexibility.

The grim outlook of oil prices has caused major oil companies to reduce their 2015 capital budgets, Civeo said in a statement. "This has had the effect of reducing the near-term allocation of capital to development or expansion projects in the oil sands, which is a major driver of demand for the company's services in Canada."

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It has also increased the difficulty of reliably estimating 2015 occupancy levels for the company's facilities, the statement said.

The provider of energy-related services forecast first-quarter revenue of between $160 million and $175 million, well below Wall Street's current estimates of $228 million, according to Thomson Reuters.

The company said it sees 2015 full-year revenue falling in the range of $540 million and $600 million, versus analysts projections of $931 million, according to Thomson Reuters.

However, the company reaffirmed its fourth-quarter revenue guidance of $200 million and $210 million. In addition, The company said it trimmed its Canadian and U.S. headcounts by 30 percent and 45 percent, receptively, from early 2014 levels.

As of the latest SEC reporting period, activist hedge funds Jana Partners and Greenlight Capital were among the company's largest shareholders.