• 4 minutes Get First Access To The Oilprice App!
  • 7 minutes Blame Oil Price or EVs for Car Market Crash? Auto Recession Has Started
  • 11 minutes Japanese Refiners Load First Iran Oil Cargo Since U.S. Sanctions
  • 13 minutes Oil prices forecast
  • 8 hours *Happy Dance* ... U.S. Shale Oil Slowdown
  • 7 hours Emissions from wear of brakes and tyres likely to be higher in supposedly clean vehicles, experts warn
  • 7 hours Is Natural Gas Renewable? I say yes it is.
  • 2 hours Oceans "Under Fire" Of Plastic Trash
  • 1 hour Chinese FDI in U.S. Drops 90%: America's Clueless Tech Entrepreneurs
  • 31 mins Renewables in US Set for Fast Growth
  • 8 hours Making Fun of EV Owners: ICE-ing Trend?
  • 17 hours Algorithms Taking Over Oil Fields
  • 7 hours Socialists want to exorcise the O&G demon by 2030
  • 20 hours Europe Slipping into Recession?
  • 1 day How Is Greenland Dealing With Climate Change?
  • 1 day Nuclear Power Can Be Green – But At A Price
  • 22 hours UK, Stay in EU, Says Tusk

Baker Hughes Still Struggling In North America

Eagle Ford drilling rig

Oilfield services group Baker Hughes (NYSE:BHI) reported on Tuesday a lower-than-expected adjusted net loss for the third quarter, but said that its North American business will only slightly grow in the fourth quarter in a persisting tough pricing environment.

The world’s third-largest oilfield services provider Baker Hughes was more bearish on its immediate-term North American business compared to competitors Schlumberger (NYSE:SLB) and Halliburton Company (NYSE:HAL), both of which signaled increased North American activity when they reported third-quarter figures last week.

Baker Hughes today reported an adjusted loss attributable to the company of US$0.15 per share, up from the US$0.05 loss per share for the third quarter of 2015, but down from the US$0.90 per-share loss for the second quarter this year. This quarter’s loss compares to an average analyst estimate for a loss of US$0.44 per share.

Including after-tax charges of US$365 million related to asset impairments, restructuring, litigation settlements, and goodwill impairment, Baker Hughes booked a net loss of US$429 million, versus a US$911-million loss for the second quarter.

The group’s revenue of US$2.353 billion – which fell slightly short of the US$2.41-billion analyst estimate – dropped by 2 percent on the quarter and by 38 percent on the year. Baker Hughes attributed the sequential drop to lower activity, mostly in the Gulf of Mexico, Norway, and West Africa deepwater operations, coupled with higher pricing pressure. In the third quarter, activity in some areas increased compared with the second quarter, mostly in the U.S. onshore business, and in Canada, Saudi Arabia, and Kuwait.

The group’s North America revenue came in at US$674 million, and despite the fact that it increased by 1 percent over the second quarter, the “competitive landscape remains challenging across the entire segment,” Baker Hughes said in its earnings release. The uptick was due to the onshore activity in the U.S. and a seasonal increase in Canada, but they were almost completely offset by a “steep decline” in the Gulf of Mexico.

Elsewhere, the Latin American business was dogged by reduced activity in Venezuela and Mexico. Lower Norway activity and unfavorable exchange rates in West Africa plagued the Europe/African/Russian/Caspian business. Middle East/Asia Pacific revenues were flat, with activity declines and price erosion offsetting pick-ups in activity in Saudi Arabia and Kuwait.

Baker Hughes, which called off a planned merger with Halliburton in the second quarter due to regulatory hurdles and depressed industry conditions – said that it expects its North American business to “modestly increase” in the last quarter of the year, with customers slowly going back to work, but warned that the pricing environment remains “tough”.

Internationally, Baker Hughes sees activity decline and pricing pressure to persist.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News