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Baker Hughes Incorporated Message Board

  • bluecheese4u bluecheese4u Jul 19, 2013 8:29 AM Flag

    Baker Hughes 2Q profit drops 45 percent on Latin America declines

    Baker Hughes 2Q profit drops 45 percent on Latin America declines

    July 19, 2013 at 6:21 am by Harry R. Weber

    Houston-based oil field services firm Baker Hughes suffered a sharp decline in its Latin America operations as it reported Friday a 45 percent drop in second-quarter earnings despite a small increase in revenue.

    The company also cited charges for bad debt provisions in Latin America and an inventory charge related to its pressure pumping operations in North America. The company posted a profit of $240 million, or 54 cents a share, during the April-June quarter, compared to a profit of $439 million, or $1 a share, a year earlier.

    Revenue in the quarter rose 3 percent to $5.49 billion, compared to $5.33 billion a year earlier.

    “Our second quarter results reflect mixed performance across our international operating segments,” Chief Executive Officer Martin Craighead said in a statement.

    He said the company is trying to reduce costs in Latin America to improve its performance there.

    “This process should be substantially complete in the third quarter leading to increased profitability in the second half of the year,” he said.

    On the positive front, the company said it saw strong performance in the quarter in its Gulf of Mexico operations, boosting revenue in North America 3 percent sequentially, despite seasonal issues in Canada

    For the first half of the year, profit fell to $507 million, or $1.14 a share, compared to a profit of $818 million, or $1.86 a share, a year earlier. Six-month revenue edged up to $10.72 billion from $10.68 billion a year earlier.

    The news follows Baker Hughes’ announcement Thursday that it is adding a new quarterly well count to the data that it collects and releases to the industry. It has been issuing a rig count since 1944.


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    • MarketWatch - August

      “Brazilian economists and analysts reduced their forecasts for the country's economic expansion this year and also for the next year, as they see inflationary pressures hurting the recovery of Latin America's largest nation's economy.”

      “Argentina must fully repay its defaulted-bond creditors, a U.S. appeals court ruled Friday, according to new reports. Payment on the debt has become a lightning-rod issue in Argentina, where the government has vowed not to repay bondholders.”

      This is just the top of the iceberg for that region. Poor BHI specialty polymers chemicals – it really believes it can grow a non oil services business in places where U.S. and European chemical multinationals like Honeywell, Westlake, BASF and others have been operating for years with professional technical, sales, and marketing staffs not wannabes. Only solution to help upgrade BHI stock is to sell these non performing entities outright and let other parts of BHI focus on the real oil services business. If outright disposal of these assets is too painful due to goodwill then set up contract manufacturing and let the professionals market the products.

    • So what's next for BHI?

      Answer: The industrial specialty chemical group will maximize sales and market presence in the cosmetics, plastics, paint, adhesives, food additives and other industries that have nothing to do with oil field drillers. This is the group that convinced themselves that Latin America was the next Asia. Brazilians are ready to welcome them with open arms at the World Cup and Olympics.

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