(Reuters) - Shares of oilfield services provider Halliburton Co fell 5 percent on Wednesday after its chief executive officer warned that third-quarter earnings could be hurt by 8 cents to 10 cents per share from moderating activity in the Permian Basin and a slower-than-expected ramp-up of new Middle East contracts.
Analysts estimated earnings of 59 cents per share in the quarter, up from 42 cents in the same quarter last year, according to consensus estimates from Thomson Reuters I/B/E/S.
Pipeline bottlenecks, a tight labor market and inflation are slowing activity in the largest U.S. shale basin, CEO Jeff Miller said at a Barclays conference in New York. The slowdown threatens to undermine a recovery in the oilfield services sector, which was hit hard by the 2014 downturn in oil prices.
“We have more white space on our calendar than expected. This creates pricing pressure,” Miller said.
Halliburton also is experiencing a slower-than-anticipated ramp-up of new contracts in the Middle East, which will affect its third-quarter earnings, Miller said.
Shares fell $2.02 at $37.46 in morning trading.
Halliburton is a leading supplier of hydraulic fracturing services in the United States, which had put it in a good position to capitalize on a recovery in benchmark oil prices to near $70 a barrel.
However, more oil and gas producers are opting to hold off completing wells as local prices in the Permian fall to near four-year lows, diminishing demand for those services.
On Tuesday, oilfield rival Schlumberger NV warned that the hydraulic fracturing market had softened more than expected.
Reporting by Liz Hampton in Houston; Editing by Chizu Nomiyama and Jeffrey Benkoe