Baker Hughes Q2 Profit Climbs, Sees Strong Earnings Growth Ahead

(RTTNews) - Oilfield services provider Baker Hughes Inc. (BHI) reported Thursday higher profit in its second quarter, despite charges related to litigation and Venezuela currency devaluation. Excluding charges, adjusted earnings surged from last year with strong revenue growth in all regions, except Latin America. Looking ahead for the remainder of the year, the company projects strong earnings growth with anticipated increase in activity.

Chairman and Chief Executive Officer Martin Craighead said, "Our results reflect improved execution and the rapid deployment of innovative new products and services around the world."

For the second quarter, net income attributable to the company was $353 million or $0.80 per share, compared to last year's $240 million or $0.54 per share.

The latest results included $39 million or $0.09 per share in charges relating to litigation settlements for labor claims and $12 million or $0.03 per share costs associated with a foreign exchange loss regarding the Venezuela currency devaluation.

Adjusted net income for the recent quarter, which excluded items, totaled $404 million or $0.92 per share. On average, 29 analysts polled by Thomson Reuters expected earnings per share of $0.90 for the quarter. Analysts' estimates typically exclude one-time items.

Adjusted earnings before interest, tax, depreciation and amortization or EBITDA, a key earnings metric, was $1.159 billion, an increase of $299 million compared to the second quarter of 2013.

Quarterly revenue of $5.935 billion was up 8 percent from the previous year's $5.49 billion, whereas 23 analysts estimated $5.87 billion in revenues.

On a geographical basis, revenues from North America increased to $2.84 billion from last year's 2.68 billion. According to the firm, revenue growth in the region reflects the unprecedented demand for newly introduced well construction and production technologies, such as the Kymera hybrid drill bit and ProductionWave production solution. The rising sales of these products, along with an increase in onshore and offshore activity in the United States, more than offset the seasonal decline in Canadian business.

Revenues from Europe/Africa/Russia Caspian region and from Middle East/Asia Pacific region also improved. Latin American revenues, meanwhile, dropped from last year.

Craighead added, "We anticipate increased activity for the remainder of the year in the form of higher international rig counts, and increased North American well counts. As a result, we project strong earnings growth as we fulfill the industry's growing need for innovative new technologies."

Further, Baker Hughes said its share buybacks totaled $200 million or 2.9 million shares for the second quarter, resulting in a remaining amount of $1.25 billion under the current authorization.

In pre-market activity, Baker Hughes shares are gaining $1.40 or 1.88 percent, and trading at $75.79.