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World oilfield services giant Baker Hughes suffers huge losses in Q2

Xinhua, July 22, 2015 Adjust font size:

Baker Hughes, one of the world's largest oilfield services companies, Tuesday reported a net income loss of 188 million U.S. dollars in the second quarter of this year.

According to a statement issued by the company, whose second-quarter profit stood at 353 million dollars a year earlier, the Houston-based company mainly attributed the decline to the lower prices for tools and services demanded by oil-producing customers in the April-June period this year.

The company said its revenue in the second quarter of this year dropped to 3.97 billion dollars from 5.94 billion dollars of the corresponding period last year, beating, however, analysts' average estimate of 3.78 billion dollars, as cited by Thomson Reuters.

Its biggest revenue fall was reported in North America with sales declining 26 percent in comparison with those of the first quarter of this year, the company said, adding that Latin America saw an 11-percent drop in revenue while Europe/Africa and the Middle East experienced a 3-percent and 7-percent fall respectively.

Martin Craighead, chief executive officer of Baker Hughes, said in a statement that the company had aggressively cut costs, a move that made it possible for the company to have decremental margins of 35 percent compared to the previous year.

He showed pessimism over the future of the market, saying that his company expects the unfavorable market to persist in the second half of the year.

The company did not believe that the drilling activity in North America will increase as long as oil prices are low.

Currently, Baker Hughes operates in over 90 countries and regions, providing the oil and gas industry with products and services for drilling, formation evaluation, completion, production and reservoir consulting.

Later last year, the company entered talks with Halliburton over a merger deal valued at 34.6 billion dollars. If carried out, this would be the largest merger in the history of the industry. Enditem