HOUSTON: 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.
