Cost Cuts Pay off for Baker Hughes

Oilfield services provider Baker Hughes Inc reported a much smaller-than-expected quarterly loss as the company's aggressive cost-cutting measures paid off.

 

Baker Hughes, which in May abandoned a merger with closest rival Halliburton Co due to opposition from antitrust regulators, said total costs and expenses fell 31.2 percent in the third quarter ended Sept. 30.

 

The company said in July it expected to save an annualized $500 million in costs by the end of 2016.

 

Baker Hughes said on Tuesday it expected activity in North America to modestly increase as customers slowly begins to ramp up activity.

 

Larger rival Schlumberger Ltd, the world's No.1 oilfield services provider, said on Friday there were early signs of recovery in industry activity in most parts of the world.

 

The number of rigs drilling for oil in the United States this week rose by 11 in the week to Oct.21, the most in two months.

 

However, Baker Hughes said it expected activity declines in the international community, with continued pricing pressure.

 

Net loss attributable to Baker Hughes widened to $429 million, or $1 per share, in the third quarter ended Sept. 30 from $159 million, or 36 cents per share, a year earlier.

 

The company said it recorded after-tax charges of $365 million related to asset and goodwill impairments, restructuring and litigation settlements.

 

Excluding items, the company reported a loss of 15 cents per share, smaller than the 44 cents analysts had expected, according to Thomson Reuters I/B/E/S.

 

Revenue fell 37.8 percent to $2.35 billion.


(Reporting by Anet Josline Pinto and Vishaka George; Editing by Sriraj Kalluvila)