Nabors Industries ( NBR) slashed fourth-quarter earnings guidance, citing slower activity in North American gas markets.

The Hamilton, Bermuda-based driller said it expects to make 95 cents to $1 a share for the quarter, below the $1.11 Thomson Financial target.

"A lower level of activity in our North American directed gas markets is the primary factor leading us to reduce our expectations for the fourth quarter and full year," said CEO Gene Isenberg. "The shortfall in operating rigs was equally split between our U.S. lower 48 and Canadian operations with each operating 13 fewer rigs.

"A portion of the shortfall in the U.S. lower 48 is because of slippage in delivery and delayed start-ups of new rigs," Nabors said. "Margins in both operations should be up slightly, compared to the third quarter. However, the actual margins will be in line with expectations for the lower 48, but below margin expectations in Canada.

"The lower rig count in Canada is about equally attributable to the general weakness in the shallow drilling market in Canada and protracted weather induced start-up delays for our mid-depth and deeper drilling rigs," the company said. "We also retired some Canadian assets in the fourth quarter, adding to the quarter's lowered expectations. Meanwhile, our international, Alaskan and U.S. land well servicing operations are growing in line with our previous expectations as is our U.S. offshore business albeit modestly slower."

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