C&J Energy Services (NYSE: CJES) reported Q1 EPS of ($0.61), $0.08 better than the analyst estimate of ($0.69). Revenue for the quarter came in at $269.62 million versus the consensus estimate of $312.61 million.

"During the first quarter, as oil prices declined and the rig count continued to fall, our customers responded by delaying or cancelling previously scheduled work, resulting in decreased utilization levels across our operations. In our Completion Services segment, we experienced declining utilization levels and more intense pricing pressure as certain competitors took advantage of the downturn to try to grow market share by working below breakeven pricing. We experienced an unprecedented level of customer pullback in our Well Support Services segment as even key customers in core basins cancelled or delayed work due to their cautious stance on potentially higher commodity prices in the near future. In response to these persistently difficult market conditions, we focused on aligning our operations with current activity levels and rightsizing the business, primarily by stacking additional equipment, closing unprofitable facilities, reducing headcount, and implementing additional cost control measures to lower our operational cost structure. Immediately on assuming the Chief Executive Officer role, I emphasized my commitment to strict capital discipline and made certain decisions regarding additional cost control and SG&A reductions that should benefit our future results.

"As we moved into the second quarter, market conditions have remained extremely challenging. With respect to some service lines, activity levels seem to have stabilized, and in some instances slightly improved off of February lows, as customers finalized 2016 capital budgets and began spending to maintain production profiles. The additional cost control and rightsizing measures that we implemented throughout the first quarter are expected to benefit our financial performance in the second quarter, but we continue to manage against an overall lack of visibility, a highly reactive customer base and significant pricing pressure from aggressive competitors. With that said, and in spite of our disappointing first quarter results, we have increased overall market share and solidified our position as one of the top service providers in each of our core service lines. Additionally, we have maintained the integrity of our organization, including a solid asset base and experienced management team, which is essential to the future growth of our Company.

"Finally, as a result of our first quarter performance we were unable to satisfy one of the financial covenants in respect to our credit facilities. We are pleased to have obtained a temporary waiver with respect to this covenant violation and we are in ongoing discussions with our lending group regarding alternatives to our current capital structure to better fund our future capital needs. We are confident that we will find a beneficial solution that will substantially de-lever our balance sheet, strengthen our ability to weather the downturn and position us to capitalize on the eventual market recovery. We look forward to updating the market in due course."

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