Amended: corrects to say that revenue figures for the quarter beat the estimates, not missed.
Oil field services company Baker Hughes Inc. (BHI) on Tuesday posted a sharp downswing in fourth-quarter profit, hampered by weak performance across all its business operations.
The Houston, Texas-based company's fourth-quarter net income was $84 million or $0.27 per share, compared to $432 million or $1.41 per share in the year-ago period.
On average, 26 analysts polled by Thomson Reuters expected the company to post earnings of $0.35 per share. Analysts' estimates typically exclude special items.
The company noted that the latest-quarter results encompassed expenses of $74 million before tax associated with reorganization, severance and acquisition-related costs, and an increase to its allowance for doubtful accounts.
Quarterly revenues dropped 24% to $2.43 billion from the previous year's revenue of $3.19 billion, and fell short of the $2.33 billion revenue consensus estimate of eighteen Street estimates.
On geographical basis, North American revenue fell to $890 million from $1.41 billion a year ago, reflecting the significant decrease in drilling in all North America geomarkets in 2009.
Quarterly revenues for Latin America dropped to $304 million from $341 million last year, hurt by significant decreases in activity in the Venezuela and Southern Cone geomarkets, offset partially by modest increases in revenue in the Brazil and Mexico/Central America geomarkets.
Europe Africa Russia Caspian region fetched quarterly revenue of $740 million, down from $844 million reported in the year-earlier quarter, largely dented by declines in revenue from the Russia, UK and Angola geomarkets offset partially by higher revenue in the Norway, Nigeria and Sub-Sahara geomarkets..
Revenue for Middle East Asia Pacific region dropped to $494 million from $590 million generated in the previous year. The company noted that the revenue growth in the Southeast Asia and North Asia geomarkets were more than offset by lower revenue driven by decreased activity and price deterioration throughout the region.
Chad Deaton, Baker Hughes chairman, president and chief executive officer, said, "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."
During the fourth quarter 2009, Baker Hughes' 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 totaled $292 million, depreciation and amortization expense was $179 million and dividend payments were $46 million in the fourth quarter 2009.
For the full year 2009, the company reported net income of $421 million or $1.36 per share, compared to $1.64 billion or $5.30 per share in the previous year. Analysts expected earnings of $1.82 per share for the full year.
Total revenues decreased 19% to $9.66 billion for the twelve months ended December 31, 2009 from $11.9 billion reported in 2008. Wall Street analysts had a consensus revenue estimate of $9.57 billion for fiscal 2009.
Looking ahead, the company expects 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.
Deaton added, "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."
Among Baker Hughes' rivals, Halliburton Co. (HAL) reported a sharp decline in fourth-quarter profit totaling $243 million or $0.27 per share, compared to $468 million or $0.52 per share in the year-earlier quarter, as weak global demand and volatility in the commodity markets negatively impacted the oil service industry. Revenues for the fourth quarter declined to $3.69 billion from $4.91 billion in the prior year period.
Another peer, Schlumberger Ltd. (SLB) reported fourth-quarter net income of $795 million or $0.65 per share, down from $1.15 billion or $0.95 per share, reflecting a downswing in the Oilfield Services and WesternGeco revenues. Quarterly revenues dropped to $5.74 billion from the previous year's revenue of $6.87 billion.
Baker Hughes shares, which have been trading between $25.69 and $48.19 in the past 52 weeks, closed Monday's trading session at $44.59.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.