June 7, 2011 / 10:03 PM / 7 years ago

UPDATE 1-Xtreme Coil's Q1 profit misses on higher costs

* Q1 shr C$0.01 vs est C$0.02

* Q1 rev fell 9.5 pct to C$23.2 mln

* Sees 2011 capex at about C$115 mln (Follows alerts)

June 7 (Reuters) - Canadian drill rig operator Xtreme Coil Drilling Corp’s quarterly profit missed analysts’ estimates, hurt by a sharp fall in gross margin as labor costs rose and revenue fell.

The company said it expects full-year capital expenditure to be about C$115 million ($117.8 million).

First-quarter net income was C$590,000, or 1 Canadian cent per share, down from C$3.4 million, or 6 Canadian cents per share, a year ago.

Revenue fell 9.5 percent to C$23.2 million.

Analysts on average had expected the company to earn 2 Canadian cents per share on revenue of C$24.2 million, according to Thomson Reuters I/B/E/S.

The company said the higher labor costs were mainly caused by the shifting of rigs from Mexico to the United States and Saudi Arabia. The rigs were moved after its customer in Mexico ran out of money last year and canceled the contracts for the 10 rigs that were deployed at the time.

Shares of the Calgary, Alberta-based company closed at C$4.64 on Tuesday on the Toronto Stock Exchange. ($1 = 0.981 Canadian Dollars) (Reporting by Abhiram Nandakumar in Bangalore; Editing by Sriraj Kalluvila)

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