Baker Hughes Revenues Down 39% Since One Year Ago

Baker Hughes Expects Less Drilling in Fourth Quarter
Baker Hughes' revenues for 3Q 2015 are down 39 percent, compared to one year ago.

 

Oilfield services giant Baker Hughes saw revenues drop to $3.8 billion for 3Q 2015, down 39 percent compared to 3Q 2014, and a 5 percent decrease from last quarter.

“Compared to the third quarter of 2014, revenue in North America declined 57 percent on sharply lower activity and unfavorable pricing, while actions we have taken to right-size our operational structure resulted in decremental adjusted operation profit margins of 30 percent,” Baker Hughes CEO Martin Craighead said in a company release.

A reduction in customer spending is the cause for less drilling in the fourth quarter, Reuters reported.

An Evercore analyst report stated that Baker Hughes continues to see a shift in spending, which favors production optimization projects over exploration and development (E&P) work. This will result in further activity and pricing weakness in its well construction product lines. 

Baker Hughes, which is set to be acquired by Halliburton Company, has already laid off thousands of workers this year due to the challenging commodity price environment. In late September, Reuters reported that both companies planned to sell additional businesses in connection with the pending acquisition.  

Looking ahead to 4Q, Craighead said the company expects activity in North America to decline as customers “adjust activity for lower commodity prices, exacerbated by an extended holiday impact.”

Valerie is an experienced writer and editor dedicated to providing useful and relevant career news about the oil and gas industry. Email Valerie at valerie.jones@rigzone.com

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R. J. Spoley | Oct. 21, 2015
Lower drilling rates during 4th/4 2015. Hang on. The drilling going on now is the result of budget money for 2015 not yet spent. Watch what happens 1st/4 2016 when budgets will be a fraction of what they are now. This is all a failure to plan long term. Who do we see about that?


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