By Tess Stynes 

Baker Hughes Inc. said its loss widened in the latest quarter as revenue slumped amid a downturn the oil-field services company's chief executive said is exceeding "even the most pessimistic predictions."

Shares fell 3.7% to $44.10 in recent premarket trading as the adjusted per-share loss was far wider than analysts had predicted and revenue missed expectations.

The latest results come ahead of Saturday's deadline for Halliburton Co. to complete its pending $35 billion deal to acquire Baker Hughes. The pending deal has faced opposition from competition authorities world-wide. Earlier this month, the U.S. Justice Department filed an antitrust suit challenging the deal, which would combine the world's second- and third-largest oil-field services firms, behind only Schlumberger Ltd.

Baker Hughes didn't comment on the pending deal in its news release Wednesday except to say it can't predict when, or if, the pending merger will be completed.

Low commodities prices have resulted in oil company customers reducing their spending for drilling and other well work, which in turn has pressured oil-field services companies to reduce their costs. Both Halliburton and Baker Hughes have cut thousands of jobs amid the commodities downturn.

Chief Executive Martin Craighead said in prepared remarks that during the latest quarter "the industry faced another precipitous decline in activity" as oil producers cut spending further.

Mr. Craighead said slumping revenue in the latest quarter reflected a 41% decline in the global rig count, lower pricing across most markets and Baker Hughes' decision to continue to limit its exposure to the unprofitable onshore pumping business in North America.

The company reported that revenue in its North America business fell 59% to $819 million in the latest quarter, reflecting a 58% rig count-decline from a year earlier and deteriorating pricing conditions.

Mr. Craighead stated that while Baker Hughes has taken significant steps to manage costs it is "retaining costs in our operating profit margins in compliance with the merger agreement."

He added that "the unique circumstances in which we are operating limit our ability to consider and action a broader range of measures required to align the company with the current and near-term market conditions."

Mr. Craighead said the company expects the North America rig count to decline 30% in the second quarter from the first quarter, with the U.S. rig count beginning to stabilize in the second half of the year, but doesn't anticipate any "meaningful increase" in activity in 2016.

Over all, Baker Hughes reported a loss of $981 million, or $2.22 a share, compared with a year-earlier loss of $589 million, or $1.35 a share, a year earlier. Excluding merger-related costs, restructuring-related charges and write-downs, the adjusted per-share loss was $1.58.

Revenue decreased 42% to $2.67 billion.

Analysts polled by Thomson Reuters expected per-share loss of 34 cents and revenue of $2.85 billion.

On Friday, Halliburton postponed its first-quarter earnings conference call until May 3, but also disclosed some 6,000 job cuts during the three-month period ended March 31, more than the 5,000 job losses it estimated in February. Halliburton also said its first-quarter revenue fell 40% to $4.2 billion.

Write to Tess Stynes at tess.stynes@wsj.com

 

(END) Dow Jones Newswires

April 27, 2016 09:30 ET (13:30 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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