BJ Services' 1Q 2010 Revenue Up 6% from Previous Quarter
BJ Services reported that revenue in the first quarter of fiscal 2010, which ended December 31, 2009, was $931.5 million, representing a 6% increase from the $878.2 million reported in the previous quarter and a 34% decrease from the $1.4 billion reported in the first quarter of fiscal 2009. Operating loss for the quarter was $10.8 million, compared to an operating loss of $15.0 million for the previous quarter and operating income of $221.3 million in the first quarter of fiscal 2009. The Company reported a net loss from continuing operations of $8.4 million, or $(0.03) per diluted share, for the first quarter of fiscal 2010 compared to a net loss from continuing operations of $(0.01) per diluted share for the previous quarter and net income from continuing operations of $0.51 per diluted share for the first quarter of fiscal 2009.
Discontinued operations, consisting of the Company's pressure pumping business in Russia, accounted for a net loss of $(0.02) per diluted share in the first quarter of fiscal 2010, compared to a net loss of $(0.02) per diluted share for the previous quarter and a net loss of less than one cent per diluted share for the first quarter of fiscal 2009. The Company completed its last pressure pumping contract in Russia in July, so the Company reclassified its Russia pressure pumping business as a discontinued operation in the fourth quarter of fiscal 2009 and, accordingly, recast prior periods to conform to that presentation.
First quarter 2010 results included costs of $3.1 million related to the pending merger with Baker Hughes Incorporated, primarily representing legal fees associated with the transaction. Operating income (loss) as a percentage of revenue was (1.2) % in the first quarter of fiscal 2010, compared to (1.7) % in the previous quarter and 15.6% in the comparable quarter of the prior year.
Commenting on the results, Chairman and CEO Bill Stewart said, "Our first quarter results reflected the second consecutive quarter of sequential improvement in revenue, operating income and operating income margin. U.S. drilling activity, particularly with respect to oil exploration, as measured by average active drilling rigs, increased 14% sequentially, but declined 42% compared to the same period a year ago. Natural gas drilling was 7% higher sequentially, and North America natural gas prices have improved somewhat as supply and demand are beginning to get more in balance. Our Canadian operations improved significantly from the previous quarter, primarily reflecting increased activity in the Montney and Horn River gas plays and the Bakken and other emerging oil plays. International pressure pumping revenues and margins improved sequentially, as international drilling activity improved 6%. Our Oilfield Services Group results declined sequentially, primarily as a result of fewer international completion tool shipments and a seasonal decline in process and pipeline activity.
"We experienced increased service activity and a generally stable to slightly improved pressure pumping pricing environment in the U.S. and Canada markets during the quarter, as capacity utilization improved. Our international pressure pumping business remains strong, and we anticipate that a number of sizable completion tool sales during our fiscal second quarter will lead to improved results from our oilfield services group. We continue to focus on our customers and meeting their needs, as we draw closer to the completion of the merger with Baker Hughes, expected to occur in March."
During the quarter, cash and cash equivalents decreased $21.6 million to $261.1 million, as the Company continued to generate positive operating cash flow, but increased investment in working capital to support revenue growth during the quarter. The Company paid $14.7 million in dividends and incurred $39.7 million in capital expenditures during the current year quarter.
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