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Baker Hughes remains upbeat despite Q1 profit fall

Industry

Baker Hughes first quarter profit for 2012 has fallen to US$379 million from $381mn for the same period in 2011

The oilfield services company has blamed increasing costs in the US for the fall, but said that its international performance was more encouraging.

Its revenue climbed 18 per cent to $5.36 billion for corresponding Q1 periods for 2011 and 2012, but its operating margin declined to 11.7 per cent from 14.1 per cent for the same periods.

International revenue for Q1 was $2.2 billion, up by $291mn compared to 2011 figures, while the company’s operating profit was $295mn for the quarter – an increase of $66mn on the same period last year.

Baker Hughes president and CEO, Martin Craighead, said, “It is clear that the overall market is experiencing pricing pressure that is likely to extend throughout 2012.

“Our performance in the international markets was strong,” he added.

The company has been working on reducing costs and improving utilisation in its hydraulic-fracturing business in North America after its customers started to shift away from natural-gas basins and towards oil fields.

Baker Hughes senior vice president and chief financial officer Peter Ragauss added, “Our final results are better than expected due to strong activity in Africa and the Middle East.”

During the first quarter of 2012 the firm started work on its first integrated operations contract in Iraq, which Craighead said he expected to see further growth from throughout the rest of the year.

Its operations in Saudi Arabia posted strong results following the delivery of complex completion systems for its Hasba and Arabiyah projects.

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