Baker Hughes Q1 Revenue Up 8%

Baker Hughes Incorporated announced that net income for the first quarter 2008 was $395.0 million or $1.27 per diluted share compared to $374.7 million or $1.17 per diluted share for the first quarter 2007 and $400.5 million or $1.26 per diluted share for the fourth quarter 2007. Net income for the first quarter 2008 includes a pre-tax gain of $28.2 million (approximately $18.4 million after-tax or $0.06 per diluted share) from the sale of the Completion and Production segment's Surface Safety Systems ("SSS") product line.

Revenue for the first quarter 2008 was $2,670.4 million up 8% compared to $2,472.8 million for the first quarter 2007 and down 3% compared to $2,740.3 million for the fourth quarter 2007. North America revenue for the first quarter 2008 was up 8% compared to the first quarter 2007 and up 4% compared to the fourth quarter 2007. Outside of North America revenue for the first quarter 2008 was up 8% compared to the first quarter 2007 and down 7% compared to the fourth quarter 2007.

Chad C. Deaton, Baker Hughes chairman, president, and chief executive officer said, "Results from North America were better than expected. Improving fundamentals for natural gas reflected in lower storage levels, higher natural gas prices, increased oil-directed drilling, and announcements by E&P operators of spending increases support higher drilling activity and additional opportunities for Baker Hughes in North America in the second half of 2008.

"Outside North America our results reflected the expected seasonal declines in export shipments at Baker Oil Tools and Centrilift and typical weather driven seasonality in the North Sea and Russia. We continue to expect revenue outside of North America to increase in a percentage range from the low to mid-teens in 2008 compared to 2007.

"Sequentially, we maintained the operating margin in our Drilling and Evaluation segment while the Completion and Production segment operating margin declined as expected due to seasonal factors.

"We continue to execute our long-term strategy focusing on investment in infrastructure, people and technology. This quarter we opened several new facilities, including our Center for Technology Innovation in Houston and our Middle East Asia Pacific Region Headquarters and Training Center in Dubai, as well as new operations centers in Brazil, Malaysia, Ecuador, Texas and California.

"As we have said, our strategy also includes building our reservoir capabilities. Therefore, I am pleased that we have acquired two premier reservoir technology and consulting firms -- Gaffney, Cline and Associates and GeoMechanics International -- to enhance our ability to work with customers beyond the wellbore. This positions Baker Hughes to combine reservoir technology and consulting with our existing technologies and services for drilling, formation evaluation, completion and production. It will also enhance our competitive position with respect to integrated projects."

During the first quarter of 2008, debt increased $461.6 million to $1,546.4 million, and cash and short-term investments decreased $24.0 million to $1,030.4 million compared to the fourth quarter of 2007. In the first quarter 2008, the company's capital expenditures were $226.6 million, depreciation and amortization expense was $146.8 million and dividend payments were $40.6 million.

During the first quarter of 2008, the company repurchased 8.2 million shares of common stock at an average price of $68.97 per share for a total of $567.8 million. At the end of the first quarter of 2008, the company had authorization remaining to repurchase approximately $256.2 million in common stock.

Oilfield Operations revenue was up 8% in the first quarter 2008 compared to the first quarter 2007, and down 3% sequentially compared to the fourth quarter 2007. Operating profit before tax was flat compared to the first quarter of 2007 and down 7% sequentially compared to the fourth quarter of 2007. The pre-tax operating margin in the first quarter 2008 was 23% compared to 25% in the first quarter 2007 and 24% in the fourth quarter 2007.

Drilling and Evaluation revenue was up 8% in the first quarter 2008 compared to the first quarter 2007, and up 2% sequentially compared to the fourth quarter of 2007. Operating profit before tax in the first quarter 2008 was down 4% compared to the first quarter of 2007 and up 1% compared to the fourth quarter 2007. The pre-tax operating margin in the first quarter 2008 was 25% compared to 28% in the first quarter 2007 and 25% in the fourth quarter 2007.

Completion and Production revenue was up 8% in the first quarter 2008 compared to the first quarter 2007 and down 7% sequentially compared to the fourth quarter 2007 from the expected decline in export sales in the first quarter 2008. Operating profit before tax in the first quarter 2008 was up 7% compared to the first quarter 2007 and down 16% compared to the fourth quarter 2007. The pre-tax operating margin in the first quarter 2008 and 2007 was 21% compared to 23% in the fourth quarter 2007.

Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE


Most Popular Articles


From the Career Center
Jobs that may interest you
Global Business Development Manager
Expertise: Business Development
Location: Houston, TX
 
United States Canonsburg: Proposals Specialist
Expertise: Business Development|Marketing|Sales
Location: Canonsburg, PA
 
Financial Reporting Analyst
Expertise: Accounting
Location: Houston, TX
 
search for more jobs

Brent Crude Oil : $51.46/BBL 4.63%
Light Crude Oil : $48.9/BBL 4.78%
Natural Gas : $3.18/MMBtu 0.90%
Updated in last 24 hours