By Sarfaraz A. Khan. Research Asst. Adnan Mushtaq
The drop in crude prices has shaken the energy markets and Civeo Corporation (NYSE:CVEO), which offers workforce accommodation and other related services to oil and gas companies in Canada and Australia, is no exception. About two weeks ago, the company gave a profit warning and suspended dividends.
For 2015, Civeo said that its first quarter revenues and EBITDA will come in at $160 to $175 million and $45 million to $55 million respectively. Analysts, on the other hand, were expecting EBITDA of $78.2 million from revenues of $228 million. For the full year, the company expects EBITDA of between $135 million and $160 million from revenues of $540 million to $600 million. This was also lower than Wall Street's consensus EBITDA estimate of $262.3 million from revenues of $817.2 million.
Civeo was spun-off from Oil States International (NYSE:OIS) in May-2014 following pressure from activist funds Jana Partners and Greenlight Capital. Jana Partners subsequently became the largest stakeholder of Civeo. Since then, Civeo's shares have fallen from more than $23 in last June to less than $3.50 at the time of this writing due in part to the 52% drop which occurred when the company gave the aforementioned update to investors.
To exacerbate, earlier this month, Jana Partners offloaded its entire 11.5% stake in Civeo, possibly at a loss, according to WSJ. This raised further concerns about Civeo's ability to continue operating as a stand-alone company in a down market.