Oil services group Hunting (LON:HTG) warned on annual profits amid falling oil prices and said the outlook was unclear.
Hunting said year-on-year profit from operations was likely to decline in the range of 50% to 75% from its record 2014 levels, but it depended on improved activity levels.
The group has been hit by falling industry investment as oil prices dropped.
Hunting said the oil and gas market continued to decline in the second quarter with an extra 34% drop in wells completed in the US and 33% worldwide compared to the first quarter of 2015.
"This severe decline has resulted in a 76% decrease in profit from operations in the first five months of the year compared to the same period in 2014," Hunting said in a trading update.
The company's Canadian, drilling tool and trenchless operations made trading losses during the period and slashed staff by nearly 50%. It has cut about a quarter of jobs across the group since the start of the year, saving about $41mln a year.
Oil & gas companies have reduced rig numbers by 56% in North America and by 12% internationally since the start of the year, causing Hunting's customers to reduce stock and cannibalise existing equipment.
Hunting said the outlook remained unclear, although weekly rig count declines have slowed, some divisions have had improved enquiries and orders.
Customer sentiment was improving due to better oil prices and lower operating costs.
"Our optimism for the long-term is steadfast as new facility investment continues toward completion and numerous innovative products are being developed," the group said. "The geopolitical nature of the downturn remains, yet the oil supply/demand imbalance is receding."
Shares dropped 35p to 565p.
Deutsche Bank, which has a 'buy' on Hunting with a 570p target price, said the trading update showed a challenging period reflective of the sharp contraction in global, and in particular US, drilling activity.
It said any share weakness should be seen as an opportunity, but added: "Overall we anticipate further risk to current year consensus could drive a ‘reality check’ given recent strength in the shares."