It hasn't been a top-notch earnings season for the oilfield services sector.
Halliburton
And now Baker Hughes
As you probably know, Baker Hughes is in the process of acquiring its fellow oilfield service company BJ Services
But let's return to Baker Hughes' most recent quarter. With the company in the midst of transforming its emphasis to a geographic orientation, rather than a product line concentration, it was forced to deal with extra costs to insure the smoothness of what really is a major change.
According to the company's CEO Chad Deaton, North America margins rebounded from second-quarter lows. And as he also noted, "Aggressive cost cutting in the first half of 2009 enabled us to absorb additional price decreases and improve profitability on modest activity increases."
And then there was the international picture, which, as Deaton observed, produced results that "were disappointing with revenue less than expected and price discounting greater than expected." In fact, of the four regions that the company now recognizes, all but our own continent saw revenue declines both year on year and sequentially. However, Deaton also said that "internationally, we believe that customer spending reached its low point this quarter," so things should be looking up from here.
But Baker Hughes isn't alone. Even the king of the deepwater drillers, Transocean
As to Baker Hughes, my advice to my Foolish friends is to give the company a wide berth until its BJ purchase is completed and oilfield services in general return to favor.
Baker Hughes has been rated a five-star company by Motley Fool's CAPS players. I suggest that you check out the company's CAPS page and add your opinion.