Baker Hughes Shares Rise as Loss Not as Wide as Feared

Baker Hughes Inc. said its third-quarter loss widened on charges related to its cost-cutting efforts and other items as the oil-field services company's revenue was hurt by continued weak demand and pricing pressures.

However, the company's shares rose 5.9% to $55.25 in recent premarket trading as the per-share loss, excluding certain items, wasn't as wide as analysts had feared.

Baker Hughes Chief Executive Martin Craighead said the company expects modest activity growth in North America during the current quarter as its customers begin to step up exploration and production of oil and gas. Outside North America, Baker Hughes expects that weaker activity and pricing pressures will continue.

Baker Hughes also had been catching up on cost cuts after a planned merger with larger rival Halliburton Co., once valued at nearly $35 billion, was called off in early May on opposition from regulators. On Tuesday, Mr. Craighead said the company exceeded its initial cost-cutting estimate for year's end of $500 million and raised the target to $650 million.

Over all, Baker Hughes reported a loss of $429 million, or $1 a share, compared with a year-earlier loss of $159 million, or 36 cents a share. Excluding restructuring-related charges, write-downs and other items, the adjusted per-share loss was 15 cents, compared with a year-earlier adjusted per-share loss of 5 cents. Revenue slumped 38% to $2.35 billion.

Analysts expected an adjusted per-share loss of 44 cents and revenue of $2.41 billion, according to FactSet.

Last week Halliburton and Schlumberger Ltd. both noted some signs the sector may slowly be coming back. As oil prices recover, big oil-field services firms like Baker Hughes, Halliburton and Schlumberger are striving to convince oil-and gas producers that the rates they pay also must move back higher.

All three of the oil-services companies have shed thousands of jobs to offset weak demand and pricing concessions amid the commodities downturn.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

October 25, 2016 09:45 ET (13:45 GMT)

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