Baker Hughes, which is being acquired by larger rival Halliburton, said it expects unfavorable market conditions to persist for the rest of the year.
July 21 (Reuters) - Oilfield services provider Baker Hughes Inc's quarterly revenue fell less than expected as more and more North American shale oil producers returned to complete wells they had abandoned as crude oil prices slumped.
These producers had built up a heavy backlog of drilled but uncompleted wells, but with oil steadying at about $50 per barrel, some producers are now coming back to these wells.
Rising stage intensity - the practice of fracking more stages per well to increase production - also helped Baker Hughes stem revenue losses, said Societe Generale analyst Edward Muztafago.
Baker Hughes's second-quarter revenue from North America, which accounts for over a third of total revenue, decline 25 percent from the first quarter. UBS analyst Angeline Sedita was expecting a 40 percent decline.
Halliburton Inc, which is acquiring Baker Hughes, said on Monday that while its second-quarter revenue from North America fell 25 percent from the first, stage count declined less than 10 percent.
Baker Hughes shares rose 3 percent to $61.32 in morning trading, while Halliburton shares rose 4 percent to $42.46.
Industry leader Schlumberger Ltd and No.2 Halliburton have also reported better-than-expected revenue and said they expect an uptick in demand in North America this year.
Baker Hughes, however, said on Tuesday that it expects unfavorable market conditions to persist for the rest of the year.
"In North America, we don't anticipate activity to increase while commodity prices remain depressed," Chief Executive Martin Craighead said in a statement on Tuesday.
Baker Hughes' total revenue dropped 33 percent to $3.97 billion, but beat analysts' average estimate of $3.78 billion. This was its strongest revenue performance in at least eight quarters.
The company's adjusted loss of 14 cents per share was in line with estimates, according to Thomson Reuters I/B/E/S.
Baker Hughes' stock had risen nearly 6 percent this year through Monday. That is higher than Halliburton's 3.5 percent gain. Schlumberger had fallen 2.2 percent, while the broader oil equipment and services index had dropped 9 percent.
(Reporting by Anannya Pramanick and Swetha Gopinath in Bengaluru; Editing by Savio D'Souza)
Copyright 2016 Thomson Reuters. Click for Restrictions.
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