Sector Snap: Shares Of Oilfield-service Firms Fall

DENVER (AP) — Shares of oilfield-services companies fell Friday after an analyst predicted a drop in activity due to the recession will hurt first-quarter performances.

Many companies have already lowered their earnings forecasts, but those adjustments failed to account for a sharp drop in activity and pricing during the first quarter, Citi Investment Research analyst Robin Shoemaker wrote in a research note.

The analyst also expects some companies to announce that first-quarter and full-year earnings will miss Wall Street expectations.

"While the companies are aggressively cutting costs, they will not see the benefits until later this year," Shoemaker wrote. "The profit margin squeeze in the first half of 2009 is severe."

Volatile crude prices, frozen credit markets and an expected decline in energy consumption have forced oil and gas producers to cut spending. That means less work for companies such as Halliburton, Schlumberger and Baker Hughes, which assist producers with drilling and reservoir management among other tasks.

In afternoon trading, shares of Halliburton Co. fell 93 cents, or 5.4 percent, to $16.85; Schlumberger Ltd., the world's largest oilfield-services company, fell $2.73, or 6.2 percent, to $41.58 and Baker Hughes Inc. fell $2.01, or 6 percent, to $31.25.

Shares of Smith International Inc. dropped $2.54, or 10 percent, to $22.84; and Weatherford International Ltd. slid 49 cents, or 3.9 percent, to $12.