UPDATE 2-RPC Inc Q1 profit falls on higher costs, shares plunge

(Recasts; adds analyst's comments, details, share movement)

By Shradhha Sharma

BANGALORE, April 23 (Reuters) - Oilfield services company RPC Inc (RES.N: Quote, Profile, Research) reported first-quarter earnings below market expectations, hurt by higher costs and competition, sending its shares down as much as 20 percent.

Morgan Keegan analyst Michael Drickamer, who called the results disappointing, said the cost increases seemed to be more on the materials and supply side, specifically related to the procurement of proppants, which the company has to buy.

Proppants are chemical particles used to keep fractures open to allow oil or gas to flow to the surface while drilling.

"There was a disruption in their proppant supplies and they have had to pay more for it and also buy it from sources further away, so the transportation costs increased," he said.

Net income at the company, which supplies oil field services and equipment including pressure pumping services, nearly halved to $14.8 million, or 15 cents a share.

Analysts on average expected a profit 21 cents a share, according to Reuters Estimates.

Revenue rose 15 percent to $197.3 million, above analysts' average estimate of $193.1 million, driven by higher capacity of revenue-producing equipment placed in service during the last 12 months.