Baker Hughes Reported Strong Third Quarter Results
Baker Hughes (NYSE: BHI; EBS) says that net income for the third quarter 2007 was $389.1 million or $1.22 per diluted share compared to $358.6 million or $1.09 per diluted share for the third quarter 2006 and $349.6 million or $1.09 per diluted share for the second quarter 2007.
Revenue for the third quarter 2007 was $2,677.6 million, up 16% compared to $2,309.4 million for the third quarter 2006 and up 6% compared to $2,537.5 million for the second quarter 2007.
Chad C. Deaton, Baker Hughes chairman and chief executive officer said, "Third quarter results were driven by strong international activity, a seasonal recovery in Canadian drilling, increased levels of U.S. land activity and increased revenue from the U.S. Gulf of Mexico. As expected, our Drilling and Evaluation and Completion and Production segments both posted improved results.
"The outlook for our international business remains strong as our customers continue to be challenged in their efforts to increase reserves and production volumes for oil and natural gas. Today's high oil price is a clear signal that the industry must increase its activity in order to satisfy growth expectations for worldwide demand. As a result, we believe customer spending in our international markets will continue to increase.
"The near-term outlook for North America activity remains uncertain as the rate of growth in drilling activity has slowed and natural gas inventories continue to build. The North America market will continue to be volatile as weather-driven demand, economic growth, LNG imports and natural gas storage levels will continue to play a significant role. In the event that natural gas prices weaken, we continue to believe that any significant reduction in drilling activity would be short-lived.
"As we enter the next year, we will continue to execute our strategy for growth through our investment in people, technology and infrastructure - with a focus on opportunities outside of North America. We will also remain focused on cost control and productivity gains, especially in North America where improvement in price above current levels has become more challenging. In all markets we will differentiate ourselves through technology, reliability and execution."
During the third quarter 2007, debt increased $1.1 million to $1,074.9 million, and cash and short-term investments increased $68.2 million to $908.0 million. In the third quarter 2007, the company's capital expenditures were $272.7 million, depreciation and amortization was $134.4 million and dividend payments were $41.4 million.
During the third quarter 2007, the company repurchased 2.3 million shares of common stock at an average price of $80.05 per share for a total of $181.3 million. As of September 30, 2007, the company had authorization remaining to repurchase approximately $1.065 billion of common stock.
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