UPDATE 1-Stifel cuts Oceaneering International target by $40

(Recasts, adds details, share movement)

Oct 31 (Reuters) - Stifel Nicolaus slashed its price target on Oceaneering International Inc (OII.N) on Friday, a day after the oilfield services company narrowed its 2008 earnings outlook and forecast a slightly weak profit for the next year.

Oceaneering shares fell as much as 10 percent in early trade.

The brokerage, which cut its price target by $40 to $43, said the company provided a "potentially disappointing outlook" due to uncertainty in the global economy, volatile commodity prices and opaque customer spending intentions.

On Thursday, Oceaneering narrowed its 2008 earnings view to a range of $3.53 to $3.61 a share. It had earlier projected full-year earnings of $3.45 to $3.65 a share.

Stifel said to achieve the midpoint of the revised outlook, the company would have to post fourth-quarter earnings of 91 cents a share, below consensus view of 97 cents a share.

The company said it could achieve 2009 earnings of $4 a share or more, if oil prices averaged above $70 a barrel.

For 2009, analysts on average expect the company to earn $4.24 a share, before items, according to Reuters Estimates.

The brokerage, which has a "buy" rating on the stock, said the company's decision to limit 2009 capital spending to about $175 million was prudent, adding that Oceaneering had a solid balance sheet and adequate liquidity and resources.

Shares of the company were down $2.50 at $26.61 in morning trade on the New York Stock Exchange. They touched a low of $26.14 earlier in the session. (Reporting by Adveith Nair in Bangalore; Editing by Himani Sarkar)