Baker Hughes posts Q3 loss

Oilfield services giant Baker Hughes posted a Q3 loss on Tuesday that was significantly larger than that for Q3 of last year but much smaller than analysts expected.

The net loss for the three months ending September 30 was USD 429 million, according to the company filing – up almost 200% from last year’s USD 159-million loss, but less than half of last quarter’s net loss of USD 911 million. Revenue fell some 38% year-on-year, from USD 3.79 billion to USD 2.35 billion, resulting in an adjusted net loss of some USD 0.15 per share. In comparison, analysts polled by Thomson Reuters had predicted an adjusted net loss of USD 0.44 per share.

“Revenue for the third quarter declined 2% sequentially, primarily as a result of steep activity reductions and project delays in our Gulf of Mexico, West Africa, and Norwegian deepwater operations,” said CEO Martin Craighead in a press release.

“Despite these activity headwinds, the improvement in the quarter is evident through a USD 249 million, or 44%, sequential reduction in our operating losses. […] Furthermore, this quarter we exceeded our original cost reduction goal for year-end, setting a new annualised cost savings target of USD 650 million for 2016.”

Baker Hughes’ smaller-than-expected losses come days after rivals Halliburton and Schlumberger also posted Q3 results suggesting that the situation in the sector was tentatively improving, at least in North America.

“Looking ahead, in the fourth quarter of 2016 we expect activity in North America to modestly increase, as our customer community slowly begins to ramp up activity in what remains a tough pricing environment,” Craighead added. “Internationally, we are forecasting activity declines and pricing pressure to continue, with minimal year-end, seasonal product sales unlikely to offset those declines.”