June 20, 2012
/PRNewswire/ -- Key Energy Services, Inc. (NYSE: KEG) expects results for its second quarter 2012 to be below prior expectations with consolidated revenue from continuing operations now forecasted to increase 5% to 7% compared to the first quarter 2012. Key also expects second quarter 2012 earnings from continuing operations to be
$0.18 to $0.20
per diluted share. Key's prior second quarter guidance anticipated sequential consolidated revenue growth of 10% to 15% and earnings from continuing operations of
$0.31 to $0.33
per diluted share.
Second quarter revenue in Key's U.S. operations is expected to increase 2% to 4% sequentially, with approximately 45% of the growth coming from our rig service business. Outside of the U.S., Key's second quarter revenue is expected to increase approximately 35% sequentially, largely on growth in
and consistent with prior expectations.
Key's Chairman, President and Chief Executive Officer,
, elaborated, "Our outlook for the remainder of 2012 is for international results to be in line with earlier expectations, with full year international revenue up approximately 75% from 2011. However, we now expect full year U.S. revenue to increase in the range of 15% compared to 2011, down from our earlier expectations of a 25% increase. We now project our 2012 U.S. operating income margins to decline by approximately 200 basis points from 2011, and we reduced our 2012 capital spending budget by
$100 million to $350 million
"Our revised forecast assumes lower activity growth than we previously estimated in the liquid shale markets throughout 2012 and further activity and pricing declines in the natural gas markets, which are impacting our fluid management, coiled tubing, and rental service businesses. That said, we continue to project that our U.S. rig service business will produce results in line with our previous estimates."