Baker Hughes announced net income for the third quarter 2010 of $255 million or $0.59 per share compared to net income of $55 million or $0.18 per share for the third quarter 2009 and net income of $93 million or $0.23 per share for the second quarter 2010. Third quarter 2010 results include a full three months of results from BJ Services compared to two months in the second quarter 2010.
Third quarter 2010 results include a $0.05 per share benefit relative to our guidance, resulting from a lower tax rate ($0.04 per share) and a reduction in our estimated quarterly amortization of intangibles associated with the BJ Services acquisition ($0.01 per share).
Revenue for the third quarter 2010 was $4.08 billion, up 83% compared to $2.23 billion for the third quarter 2009 and up 21% compared to $3.37 billion for the second quarter 2010.
Chad C. Deaton, Baker Hughes chairman and chief executive officer, said, "Our third quarter results in North America reflect the seasonal recovery in Canada and the strength of the US Land market. Drilling for unconventional oil and gas in key North American basins has driven demand for drilling, pressure pumping and completions products and services. In contrast, the deepwater moratorium and permitting delays on the shelf significantly reduced activity in the Gulf of Mexico, partially offsetting the increases in revenue and operating profit onshore.
"We have made good progress in integrating BJ Services and Baker Hughes. Management reporting lines are in place and sales, and operations teams are working together to successfully pull through products and services to traditional customers of both Baker Hughes and BJ Services. We are developing combined offerings for geological analysis, drilling, perforating, completions and hydraulic fracturing for our customers. Our expected cost synergies of $75 million in the first twelve months and an additional $75 million in the second twelve months remain on target.
"Our international results did not change meaningfully from the last quarter. Activity levels were as expected, except in Norway where the third quarter was impacted negatively by extended summer rig downtime. While international activity has continued to grow modestly, we have not yet seen sufficient growth in key markets to support incremental pricing.
"During the quarter we implemented the next phase of our plan to reduce costs and improve international margins. We consolidated several geomarkets in our Africa and Latin America regions and have reduced other support costs worldwide.
"Looking ahead, we expect global economic expansion to increase demand for oil and drive continued growth in our international markets. In North America we expect increases in drilling for oil and wet gas to offset weakness in dry gas activity. While we are encouraged that the Gulf of Mexico deepwater drilling moratorium has ended, the recovery of drilling in the Gulf, both in the deepwater and on the shelf, will depend on the pace of permit approval within the new regulatory framework."
Debt increased by $935 million to $3.85 billion and cash and short-term investments increased from $937 million to $1.86 billion compared to the second quarter 2010. The change in debt reflected the issuance of $1.5 billion in bonds, a portion of the proceeds of which were used to repay $511 million in commercial paper. The remainder will be used to repay the $250 million BJ Services bonds due in June 2011 and other corporate needs. Capital expenditures were $466 million, depreciation and amortization expense was $293 million and dividend payments were $64 million in the third quarter 2010.
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