By Victoria Stilwell
Baker Hughes Inc.'s (BHI) second-quarter profit climbed 30% as
the company's onshore U.S. operations helped to offset a seasonal
slowdown in Canada, contributing to better-than-expected
revenue.
Chief Executive Martin Craighead said the company is "cautiously
optimistic" about the market outlook for the rest of the year. He
said the company sees continuing improvement in the Gulf of Mexico
and internationally as those markets expand.
Baker Hughes has had difficulties adjusting to low natural gas
prices that have some energy customers pulling back on drilling for
the commodity. As natural gas prices languish near 10-year lows,
oil and gas companies have been shifting their production to
oil-rich shale.
For the second quarter, Baker Hughes reported a profit of $439
million, or $1 a share, up from a year-earlier profit of $338
million, or 77 cents a share. The year-ago period included 16 cents
in expenses related to the company's operations in Libya.
Revenue rose 12% to $5.33 billion.
Analysts surveyed by Thomson Reuters recently expected earnings
of 77 cents a share on $5.26 billion in revenue.
Operating margin narrowed to 12% from 13% as total costs and
expenses rose 14% to $4.69 billion. Baker Hughes said the impact
from a seasonal slowdown in Canada was mostly offset by improved
results in onshore U.S. operations.
At its North American oil-field operations--its largest
geographic business by revenue-- revenue grew 13%, although the
segment's pretax profit fell 18%. Baker Hughes earlier warned its
North America margins for the second quarter would decline, mostly
due to seasonality in Canada.
Shares of Baker Hughes closed Thursday at $41.75 and were
unchanged in premarket trade. The stock is off 47% in the last 12
months.
Write to Victoria Stilwell at Victoria.Stilwell@dowjones.com
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