Baker Hughes Boosts Income from 3Q 2009
Baker Hughes announced that net income for the fourth quarter 2009 was $84 million or $0.27 per diluted share compared to $432 million or $1.41 per diluted share for the fourth quarter 2008 and $55 million or $0.18 per diluted share for the third quarter 2009. Net income for the fourth quarter 2009 includes expenses of $74 million before tax ($0.16 per diluted share) associated with reorganization, severance and acquisition-related costs, and an increase to our allowance for doubtful accounts. Net income for the year 2009 was $421 million or $1.36 per diluted share, compared to $1.64 billion or $5.30 per diluted share for the year 2008. Net income for the year 2009 includes expenses of $250 million before tax ($0.55 per diluted share) associated with reorganization, severance and acquisition-related costs, and an increase to our allowance for doubtful accounts.
As previously reported, net income for the third quarter 2009 included expenses of $38 million before tax ($0.08 per diluted share) associated with reorganization, severance and acquisition costs, and an increase to our allowance for doubtful accounts.
Revenue for the fourth quarter 2009 was $2.43 billion, down 24% compared to $3.19 billion for the fourth quarter 2008 and up 9% compared to $2.23 billion for the third quarter 2009. Revenue for the year 2009 was $9.66 billion, down 19% compared to $11.86 billion for the year 2008.
Chad C. Deaton, Baker Hughes chairman, president and chief executive officer, said, "The sequential improvement in our fourth quarter earnings was the result of increased revenue in every region, as well as the aggressive cost cutting measures we took throughout the year. Incremental margins were particularly strong in North America driven by increased horizontal drilling in the US Land geomarket and improved rig mix in the Gulf of Mexico geomarket. In the fourth quarter, international revenue benefitted from customer requests to accelerate delivery of some large product orders and improved geographic and customer mix.
"We expect international activity to improve in 2010 driven by the global economy's increasing demand for oil and natural gas. However, margins will remain under pressure as the impact of price discounts negotiated in 2009 are reflected in 2010 results. In North America the oil-directed rig count has improved substantially and the gas-directed rig count has begun a steady increase. We expect both trends to continue.
"The implementation of our geographic-centered organization structure announced last May continues to progress and we anticipate further improvements in our competitive position during 2010. Our plans for integrating BJ Services into Baker Hughes are on schedule and we expect to close the transaction by the end of the first quarter. We look forward to welcoming the BJ Services employees to Baker Hughes, and we remain excited about the growth potential of the combined companies."
During the fourth quarter 2009, debt decreased $6 million to $1.80 billion and cash and cash equivalents increased $108 million to $1.59 billion as compared to the third quarter 2009. Capital expenditures were $292 million, depreciation and amortization expense was $179 million and dividend payments were $46 million in the fourth quarter 2009. For the year 2009, capital expenditures were $1.09 billion and depreciation and amortization expense was $711 million compared to $1.30 billion and $637 million in 2008, respectively.
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