Shares of Core Laboratories (CLB) - Get Core Laboratories N.V. Report dropped Tuesday after the oil-services provider lowered its fourth quarter guidance and cut its dividend payments amid a slowdown in the key U.S. drilling sector and a delay in booking big overseas deals.
Core Labs' stock at last check dropped 22% to $36.95.
The company's forecast pointed to an 11% decline in U.S. rig count and a 20% decline in "completion activity" affecting the company's production enhancement division.
The Amsterdam company also said discussions on major international and offshore projects were moving more slowly than expected.
In response to more challenging business conditions, Core Labs slashed its quarterly dividend to 25 cents a share from 55 cents.
The move, effective in the first quarter, will save Core Labs $53 million a year, the company said.
In explaining its decision, Core Labs cited "projected modest growth in the international markets for the near term" and "continued volatility in the U.S. land market."
Core Labs is now forecasting earnings of 37 to 38 cents a share for the fourth quarter on revenue of $154 million to $156 million.
In its third-quarter report, the company had projected Q4 earnings at 44 cents to 45 cents a share on revenue of $161 million to $163 million.
For its initial first-quarter estimate, Core Labs projects earnings of 39 cents to 41 cents a share on revenue ranging from $159 million to $164 million.
However, the company said it "remains constructive" on the mid-to-long-term outlook for crude-oil markets, citing offshore projects in South America, the Middle East and the Gulf of Mexico.