Baker Hughes Revenue Falls 39% on Depressed Oil Prices
October 21 2015 - 9:02AM
Dow Jones News
By Chelsey Dulaney
Baker Hughes Inc. on Wednesday reported a 39% drop in revenue
for its third quarter, as the oil-field services company forecast
difficult conditions for its current quarter while depressed oil
prices continue to pressure spending from its customers.
Baker Hughes, which is being acquired by larger rival
Halliburton Co., has cut thousands of jobs and closed facilities as
plunging oil prices have prompted many of its clients to curtail or
cancel projects. Baker Hughes and its peers are particularly
struggling in the U.S., where shale producers have dialed back
operations.
Chief Executive Martin Craighead said Baker Hughes is seeing
greater interest in its production offerings, as customers focus on
optimizing production from existing wells over exploration and
production. Mr. Craighead said he expects the company to face
further reductions in activity and pricing pressures throughout the
remainder of the year.
For the quarter ended Sept. 30, Baker Hughes reported a loss of
$159 million, or 36 cents a share, compared with a prior-year
profit of $375 million, or 86 cents a share.
Excluding restructuring charges and merger costs, among other
items, the company's adjusted per-share loss was 5 cents a
share.
Revenue fell to $3.79 billion from $6.25 billion a year
earlier.
Analysts polled by Thomson Reuters were expecting an adjusted
loss of 14 cents a share on revenue of $3.79 billion.
Revenue fell across all of Baker Hughes's geographic segments in
the quarter compared with a year ago, with the biggest drop in
North America. The division saw a 57% decline in revenue to $1.4
billion, as average rig counts fell 54% and customers cut
spending.
Latin America posted a 23% decline in revenue, while revenue
fell 21% in the Middle East and Asia Pacific division.
Meanwhile, Baker Hughes is moving forward with its deal to be
bought by Halliburton. The deal, struck last November and valued at
almost $35 billion at the time, underscored the new realities for
energy companies in a world suddenly awash with oil. As a result,
oil-field services companies, which are hired to drill and pump
wells, are facing less demand for their services and pressure to
cut prices.
Halliburton on Monday reported a third-quarter loss on asset
write-downs and acquisition-related expenses, as its business in
North America continued to be hit hard by slumping demand.
Rival oil-field services firm Schlumberger Ltd. recently
reported 49% drop in earnings for its third quarter.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 21, 2015 08:47 ET (12:47 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
Halliburton (NYSE:HAL.WD)
Historical Stock Chart
From Jul 2024 to Jul 2024
Halliburton (NYSE:HAL.WD)
Historical Stock Chart
From Jul 2023 to Jul 2024