Baker Hughes Quarterly Loss Narrows; Expects Slower Activity In 2H

Reuters

July 28 (Reuters) - Oilfield services provider Baker Hughes, now part of General Electric Co, expects growth in North American onshore activity to decelerate in the second half of this year, the company said on Friday in a filing.

The tempered outlook comes as oil prices fell from highs seen earlier in the year during the second quarter. This week, several major producers lowered capital spending plans for the remainder of the year.

GE's Baker Hughes said it expects international onshore activity to remain stable, with some areas of "modest growth," and global offshore drilling activity to remain muted due to lack of customer confidence in the direction of commodity prices.

Baker Hughes reported a smaller quarterly loss compared with a year earlier, when it incurred some restructuring charges.

Industrial conglomerate GE earlier this month closed the merger of its oil and gas business with Baker Hughes, leaping over rival Halliburton to create the No. 2 oilfield services provider. Baker Hughes' merger with Halliburton Co collapsed last May.

Net loss attributable to Baker Hughes narrowed to $179 million, or 42 cents per share in the second quarter ended June 30, from $911 million, or $2.08 per share, a year earlier.

Baker Hughes took restructuring charges of $1.13 billion and a goodwill impairment charge of $1.84 billion in the year-ago quarter.

Its second-quarter numbers do not include results from GE's oil and gas operations.

The company's revenue fell slightly to $2.40 billion in the second quarter, from $2.41 billion a year earlier. However, revenue climbed 6.3 percent from the preceding quarter due to increased drilling activity in the United States.

Higher oil prices have prompted an uptick in drilling activity, with companies adding 488 rigs in the past year, nearly double those in operation a year ago, according to the latest data from Baker Hughes.

Baker's shares were up slightly in pre-market trading at $36.16.

Halliburton and bigger rival Schlumberger Ltd have also benefited from a boom in North American drilling even though oil prices have stayed below $50 a barrel.

Baker Hughes reported a slight 3-percent increase in Latin America revenue sequentially, but said gains from shallow water activity in Mexico and increased sales in Argentina were offset by lower utilization of some services in Mexico and a decrease in artificial lift sales in Venezuela.

Both Halliburton and Schlumberger took a hit on bills owed by Venezuela in the second quarter.

(Reporting by Yashaswini Swamynathan and Sruthi Shankar in Bengaluru; Editing by Sai Sachin Ravikumar and Nick Zieminski)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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