June 20, 2011 / 1:18 PM / in 7 years

UPDATE 2-Bad weather, MEast civil unrest to hit Nabors profit

* Sees Q2 oper profit $165-$170 mln

* Sees FY oper profit $900 million vs $926.4 mln - I/B/E/S

* Says bad weather in U.S. hurt ops (Adds background, analysts comments)

By Thyagaraju Adinarayan

BANGALORE, June 20 (Reuters) - Nabors Industries Ltd , the world’s largest land-drilling contractor, forecast market-trailing quarterly operating profit, hurt by bad weather at home and civil unrest in some countries.

The cut comes despite a lot of oil and gas companies raising budgets to hunt for more oil amid rising prices.

Chief Executive Gene Isenberg attributed the outlook cut mainly to Nabors’ pressure pumping and international segments.

“While much of the issues Nabors highlighted are not new or unknown, they do represent continued execution issues that the company ran into in Q1,” Bernstein Research wrote in a note.

Weather-related issues and cost issues at Hamilton, Bermuda-based Nabors’ pressure pumping and well-servicing businesses had also hurt its first-quarter results.

Nabors expects Superior Well Services, which it bought last August to boost its pressure pumping operations, to be back on track with its expectations only by the year-end.

Superior has been hurt by bad weather in the Bakken and Marcellus shales, as well as by startup inefficiencies related to late deliveries of new equipment, Nabors said.

Earlier this month, Bakken-focused oil and gas producer Brigham Exploration slashed its second-quarter production outlook because of bad weather.

Internationally, delays in contract awards and interruptions from unrest in some areas weighed mainly on its operations in Saudi Arabia and Iraq.

A 2012 STORY

“Clearly, the earnings ramp planned in 2H11 is getting pushed back, and Nabors now looks like more of a 2012 story,” Raymond James wrote in a note.

While the number of permits issued in the Gulf of Mexico has been improving, Nabors still said delays in permit issuances in U.S. offshore continues to plague its operations.

Nabors expects its April-June operating income to be in the range of $165-$170 million. Analysts, on average, were expecting $188.1 million, according to Thomson Reuters I/B/E/S.

For the full-year, Nabors expects operating income of about $900 million, below market view of $926.4 million.

Nabors shares were down about 3 percent at $23.42 on Monday on the New York Stock Exchange. They have climbed more than 2 percent this year, slightly underperforming a 3 percent increase in the CBOE index of oil companies . (Reporting by Thyagaraju Adinarayan; Editing by Joyjeet Das)

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