Following earnings renditions by the other big oilfield services performers during the past 10 days, Baker Hughes
The company's profit slid to $195 million, or $0.63 per share, from exactly $200 million more on the net income line and $1.27 a share in the first quarter of 2008. Revenues were precisely flat in the period at $2.67 billion. Analysts who follow the company had anticipated $0.76, excluding $0.19 in special charges that crept into the results.
As was the case with Halliburton, and the other two big oilfield services companies, Schlumberger
Chad Deaton, CEO of Baker Hughes, probably put it well when he noted that "Our first-quarter results for North America reflect the severe contraction in customer spending activity." Mr. Deaton also noted that, nevertheless, outside the U.S., declines in Saudi Arabia, Russia, and the Caspian and U.K. markets were at least partially offset by increases in South America, Norway, and Africa.
But in looking ahead, which in investing is far more important than peering into the rearview mirror, Deaton also was not optimistic. As he noted, "the fundamentals that drive our outlook are essentially unchanged. We expect customer activity in North America to continue to decline."
My strong inclination for those Fools without an extra-long investment horizon is to avoid the oilfield services sector -- certainly including Baker Hughes. It's apparent that the group will continue to be affected by slowing activity and declining prices, especially in the U.S. and Canada. Indeed, thus far only the deepwater drillers -- primarily Transocean
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