For Houston-based oilfield services company Baker Hughes (NYSE: BHI ) , it was a confirmation of a trend already set by larger brethren Schlumberger (NYSE: SLB ) and Halliburton (NYSE: HAL ) . Deployment of rigs and other equipment on land in North America more than compensated for a virtual halt to deepwater drilling in the Gulf of Mexico, providing a surprisingly solid quarter for the company.
The results included earnings that shot up to $335 million, or $0.77 per share, for the quarter. Those figures were hardly in the same league as the $84 million in earnings, or $0.27 per share, for the comparable quarter a year ago. But backing out one-time items, including an acquisition charge and gains on investments, the numbers for the quarter moved to $366 million in net income, or $0.84 a share.
Revenues for the fourth quarter of 2010 reached $4.42 billion, a whopping 82% over the $2.43 billion a year earlier. As you'd likely expect, those results made short work of analysts' estimates of per-share earnings of $0.64 on revenues of $4.26 billion. The most recent quarter includes the contribution from the acquisition of BJ Services, for which Baker Hughes paid $5.5 billion in cash and stock in April.
Geographically, the company noted that "the service intensity of land-based drilling North America continues to escalate as we advance our capability to leverage pressure pumping and Baker Hughes' legacy product lines." It continues to gain business in Canada, including a new contract for EnCana (NYSE: ECA ) in the Entice coal bed methane project. In Brazil, Baker Hughes has drilled more than 2 million feet, "mostly at water depths greater than 1,000 feet, where our customer's challenges ... are greatest."
As CEO Chad Deaton said, "In North America, margins increased almost 500 basis points sequentially, reflecting the ongoing strength of customer spending in unconventional oil and gas plays." He also said the company's international operating margins improved by 375 basis points sequentially.
However, he also cautioned: "We remain concerned about the pace of permit approval for both deepwater and shelf drilling, which continues to weigh on the outlook for the Gulf of Mexico."
Weatherford International (NYSE: WFT ) also reported sound operating results Tuesday. On Wednesday, ConocoPhillips will be the first member of Big Oil to report. While the services companies have uniformly performed well, those of us with a bent for energy can only hope that the operators maintain the trends initiated by Schlumberger, Baker Hughes et al.
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