French seismic engineering company CGG Veritas (CGV) Thursday said net income fell 26%, weighed down by financial charges, and said it is cutting costs and adjusting capacity after market conditions worsened.

"Since visibility remains particularly low for the rest of the year, we are implementing cost savings and adjusting capacity to strengthen our ability to deliver optimal performance and focus on our priority of a healthy net free cash flow in 2009," Chief Executive Robert Brunck said.

Net income for the three months ended March 31 fell to $71 million, from $95 million a year earlier.

The company noted financial charges of $34 million that weighed on net profit, but didn't provide details.

First-quarter revenue came to $851 million, down from $873 million a year earlier.

Reduced market demand and clients postponing spending decisions weighed on the company's backlog, which now stands at $1.4 billion, CGG Veritas said.

-By Adam Mitchell, Dow Jones Newswires, +33 1 40171740; adam.mitchell@dowjones.com