May 4, 2009 / 9:55 PM / 8 years ago

UPDATE 1-Pason Systems Q1 profit drops 76 pct

* Q1 EPS C$0.06 vs C$0.26 a year-ago

* Q1 revenue C$54.2 mln vs C$73.3 mln a year ago

May 4 (Reuters) - Pason Systems Inc PSI.TO, a provider of specialized rental oilfield instrumentation systems, posted a 76 percent drop in first-quarter earnings, largely due to a rapid decline in drilling activity.

In the latest quarter, the company's net income dropped to C$4.9 ($4.16 million), or 6 Canadian cents a share, from C$20.9 million, or 26 Canadian cents a share, a year ago.

Revenue for the quarter fell 26 percent to C$54.2 million.

Analysts expected a profit of 15 Canadian cents a share, before items, on revenue of C$73.40 million, according to Reuters Estimates.

The company said lower drilling that led to fewer days and competitive price pressure, compounded by Pason's largely fixed cost structure, contributed to the huge drop in profit.

"Clearly the combined results of extremely low natural gas prices, relatively low oil prices and reduced bank credit for our customers will continue to negatively impact drilling activity in the near term," Pason said.

Shares of the Calgary-based company closed at C$10.93 Monday on the Toronto Stock Exchange. ($1=1.179 Canadian Dollar) (Reporting by Antonita Madonna Devotta in Bangalore; Editing by Anil D'Silva)

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