UPDATE 1-Pritchard cuts Key Energy to neutral
July 21 (Reuters) - Pritchard Capital Partners cut Key Energy Services Inc (KEG.N) to "neutral" from "buy," saying it was concerned with the June operational results and their implications for potential downward revisions.
For the month of June, Key Energy's rig hour per working day declined 6.1 percent compared to last month, while trucking hours declined by almost 2 percent, the company said on Monday. It also added that average pricing per rig hour was off 10 percent sequentially for the second quarter.
The brokerage also raised concerns about "potential turbulence going into Q2," and widened their second-quarter loss estimates to 13 cents from 6 cents per share.
Full-year loss estimates were also widened to 22 cents per share from 9 cents. The consensus for Key Energy is to post losses of 11 cents in second quarter and 22 cents for 2009, according to Reuters Estimates.
"Channel checks suggest that one cause of the decline ( in monthly production figures) was a large customer pulling back across various markets due to budgetary constraints," said the brokerage, which also cut its price target to $6.25 from $8.00.
Pritchard also said the company's decision not to cut prices for some of their repair and maintenance services might have been unattractive for customers.
Shares of Key Energy fell more than 2 percent to $6.11 in morning trade on the New York Stock Exchange. (Reporting by Arup Roychoudhury in Bangalore; Editing by Anil D'Silva)
(arup.roychoudhury@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: arup.roychoudhury.reuters.com@reuters.net))
