Oilfield services provider BJ Services said Tuesday its fiscal second-quarter earnings fell 66 percent due to lower drilling activity as the global economic recession hurt demand for energy.
Quarterly earnings slid to $43 million, or 15 cents per share, from $127.3 million, or 43 cents per share, during the same period last year.
The company's chief executive Bill Stewart said that North American drilling activity declined 27 percent year over year and at the current level of 975 active rigs, the U.S. drilling count has reached its lowest level in six years.
"This decline in activity and intensive competition led to severe price reductions for our services and products," Stewart said.
Revenue dropped 18 percent to $1.05 billion from $1.28 billion.
According to a survey by Thomson Reuters, analysts expected profit of 22 cents per share on revenue of $1.13 billion for the period ended March 31.
In response to the battered energy market, BJ Services has cut its global work force by 11 percent, which resulted in a one-time severance cost of $6.2 million in the quarter, Stewart said.
Stewart added that he expects drilling activity in the U.S. to decline further over the next several quarters. Internationally, he foresees a modest decline in activity, but not as severe as the drop in the second quarter.