Baker Hughes 4Q earnings fell 6.3% but revenue rose 22%

January 24, 2012 | Earnings Reports

Baker_Hughes_stimulation_vessel

Baker Hughes Inc.’s net income dropped 7 percent in the fourth quarter, dragged down by a large impairment charge.

The oil field services provider reported Tuesday that it earned $314 million, or 72 cents per share, for the three months ended Dec. 31. That compares with earnings of $335 million, or 77 cents per share, a year earlier.

The charge, amounting to 50 cents per share, comes from Baker Hughes’ decision to make less use of the BJ Services trade name. BJ Services was acquired last April. Excluding the charge, earnings were $1.22 per share. That’s below analysts’ predictions for earnings of $1.32 per share.

Revenue increased 22 percent to $5.39 billion from $4.42 billion, but fell short of Wall Street’s $5.47 billion forecast.

Like larger rivals Schlumberger Limited and Halliburton Co., Baker Hughes has found its services more in demand in North America, where drillers are using advanced technologies to tap large reservoirs of natural gas and oil trapped in shale rock formations. North American revenue rose 27 percent.

“Our business continues to improve and we benefited from increased activity, a favourable product mix as well as typical seasonal product sales,” President and CEO Martin Craighead said in a statement.

One sore spot in the quarter was the company’s division that supplies pressure pumping services. Baker Hughes said the division had issues with “the availability, cost and transportation of materials, such as sand and gel.” Also, the company boosted headcount but wasn’t able to put all the new resources to work.

Baker Hughes’ stock slipped 53 cents to $47.20 in premarket trading.

For the full year, the Houston Company earned $1.74 billion, or $3.97 per share, compared with $812 million, or $2.06 per share, in the prior year.

Adjusted earnings were $4.20 per share.

Annual revenue climbed 38 percent to $19.83 billion from $14.41 billion.

Craighead said the company anticipates more international growth ahead, specifically in Latin America, theMiddle Eastand deep water markets.