Australian drilling services firm Boart Longyear slashed its 2012 earnings forecast on Monday for the second time in three months, expecting earnings to fall 10-13 percent as savings from job cuts have yet to flow through.
Hit by a slowdown in the mining industry worldwide, it also warned it expects to take a $50 million charge on inventory and asset values.
The Denver-based, Australian-listed company said it now expects calendar 2012 earnings before interest, tax, depreciation and amortisation (EBITDA) to fall to between $310 million and $320 million, from $356 million last year.
It flagged in August it expected earnings to be flat to 10 percent higher. It still expects revenue to hold around $2 billion.
Revenues are broadly consistent with expectations, but margins in Drilling Services have been impacted due to timing of cost take-outs associated with headcount reductions, Chairman and acting chief executive David McLemore said in a statement.
McLemore aims to cut more than 20 percent of the company's overhead costs, or about $70 million.
Boart expects to book a charge of about $50 million on inventory and asset values in light of weaker demand globally for drilling, but said the market appears to have hit bottom.
Early indications from 2013 contract negotiations currently underway are that market demand has stabilised and revenue run-rate in 2013 should approximate second-half 2012 levels, it said.
Shares in Boart slumped to a three-year low in September and are down 53 percent so far this year.