HOUSTON (Reuters) - Nabors Industries Ltd. yesterday said fourth-quarter profit fell 56 percent, as the world's top land-based drilling contractor grappled with a lower domestic rig count and lower than expected drilling activity.

The Bermuda-registered company, headquartered in Houston, reported fourth-quarter net income of $27.2 million, or 18 cents a share, down from net income of $62.1 million, or 41 cents a share, in the year-ago quarter.

Excluding special items, the company posted earnings per share of 15 cents.

On that basis, analysts had forecast earnings of 9 cents to 18 cents a share, with a consensus estimate of 12 cents a share, according to research firm Thomson First Call.

Revenue for the quarter fell to $392.9 million from $475.3 million in the prior-year quarter.

The company said it expects a "much improved" first quarter and full year. It also said it sees "multiple signs" of an improving market environment in its US land drilling and well servicing units, though expectations are "modest" for the next two quarters.