Baker Hughes suffered a net loss of US$1 billion in Q4, in addition to a 36% dip in its revenue year-on-year that the company said is from global pricing pressures, and the steep decline in activity.
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Image from Baker Hughes. |
Full year revenue for Baker Hughes came in at $15.7 billion, down $8.8 billion compared to $24.6 billion for 2014. For Q4, the company posted revenue $3.4 billion, a decrease of $392 million or 10% sequentially, and down $3.2 billion or 49% compared to Q4 2014.
"Our 2015 results are reflective of an extremely difficult and increasingly challenging year for the industry," Martin Craighead, Baker Hughes chairman and CEO said. "Since the fourth quarter of 2014, the global rig count has declined 46% as our customers adjusted their spending to align with declining commodity prices.
On a GAAP basis, net loss for Q4 was $1 billion. Adjusted net loss for the period came in at $93 million, excluding $1.3 million before-tax or $938 million after-tax in adjustments, which include impairment and restructuring charges of $1.25 million before-tax or $871 million after-tax, in addition to merger and other costs of $91 million before-tax or $67 million after-tax.
“Looking ahead, we are forecasting rig activity worldwide to continue to decline throughout 2016,” Craighead said. “At current commodity prices, the global rig count could decline as much as 30% in 2016, as our customers' challenges of maximizing production, lowering their overall costs, and protecting cash flows are now more acute.”
In Q4, Baker Hughes experienced a decline in its revenue due to a sharp decrease in activity and ongoing pricing pressure as E&P companies further adjusted their spending to the continued drop in commodity prices. However, the company’s artificial lift product line did see a 4% growth in Q4.
As for the $34.6 billion Halliburton, Craigshead said he continues “to be extremely pleased with the efforts of our team supporting the regulatory review process and developing plans for a successful integration. We are fully dedicated to closing the merger as early as possible.”
Last month, efforts to complete the merger hit a snag as the timing agreement with the Antitrust Division of the US Department of Justice expired without reaching a settlement, which extended the time period to complete the transaction to 30 April.
Halliburton also took a hit in Q4, and posted a 43% loss compared to last year, resulting from the impact of reduced commodity prices creating widespread pricing pressure and activity reductions on a global basis.
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DOJ delays Halliburton, Baker Hughes merger
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