Baker Hughes (BHI) Posts Smaller-than-Expected Q3 Loss
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Baker Hughes (NYSE: BHI) reported Q3 EPS of ($0.15), $0.30 better than the analyst estimate of ($0.45). Revenue for the quarter came in at $2.4 billion versus the consensus estimate of $2.41 billion.
“Our third quarter results demonstrate the progress we have made on our commitment to improve financial performance by reducing operational costs, optimizing our capital structure, and strengthening our full-service model while building broader sales channels for our products and technology,” said Martin Craighead, Baker Hughes Chairman and Chief Executive Officer.
“Revenue for the third quarter declined 2% sequentially, primarily as a result of steep activity reductions and project delays in our Gulf of Mexico, West Africa, and Norwegian deepwater operations. Despite these activity headwinds, the improvement in the quarter is evident through a $249 million, or 44%, sequential reduction in our operating losses, driven mainly by the decisive actions we took to right-size our operating structure. Furthermore, this quarter we exceeded our original cost reduction goal for year-end, setting a new annualized cost savings target of $650 million for 2016.
“Looking ahead, in the fourth quarter of 2016 we expect activity in North America to modestly increase, as our customer community slowly begins to ramp up activity in what remains a tough pricing environment. Internationally, we are forecasting activity declines and pricing pressure to continue, with minimal year-end, seasonal product sales unlikely to offset those declines.
“While we expect the market conditions to remain challenging near term, the structural changes we implemented in the past six months have created a stronger foundation for delivering on our objectives and positioning the company for growth. I am pleased with our progress and, while we have more work ahead of us, I am confident that we have the right people, technology, and strategy to grow profitably and maximize return on invested capital.”
For earnings history and earnings-related data on Baker Hughes (BHI) click here.
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