NOV, a provider of oilfield services, says Middle East disruptions will impact the first quarter.

NOV announced on Wednesday that its first-quarter revenues?and earnings would be below its previous outlook due to delays in equipment deliveries and higher logistical?costs? linked to the Middle East war.

The shares of the oilfield services and equipment provider dropped nearly 3% during premarket trading.

The company estimated that the conflict had reduced revenues by approximately $54 million, and adjusted earnings before taxes, depreciation and amortization (EBITDA), by approximately $32 million.

These challenges affected the quarter-end deliveries in the region of capital equipment and products including spare parts. Our more service-oriented offerings, however, were less affected, said CEO Jose Bayardo.

The margins were further impacted by increased shipping and freight costs, and decreased absorption of our manufacturing facilities.

Drilling and oilfield activity in the Middle East has been reduced due to increased security concerns and damage caused to the energy infrastructure. This has led to a sharp drop in demand for oilfield equipment and services.

SLB, a leading industry player, said last month that the conflict will reduce its first-quarter earnings of 6 to 9 cents per share and cause revenue to fall below expectations.

Other major energy companies have also taken precautionary measures. ExxonMobil evacuated non-essential staff from certain Middle East operations following the outbreak of war between Iran and U.S. Israel.

NOV forecasted that its first-quarter EBITDA would be in the $200 million to $225million range and that it's revenue would decline by 1% to 3 percent from the year before.

The company now expects revenue to be around $2.05 billion, with an operating profit of $47 million. Adjusted EBITDA is expected to be $177?million.

The company stated that none of its facilities in the area were damaged, and is working to reduce delays and rising costs.

(source: Reuters)