Oil field services firm Baker Hughes Inc. (NYSE: BHI) this morning announced that it is cutting its first quarter 2012 operating profit before tax margins in both its US and international operations. The company attributes the reduction to “rapidly changing market conditions in the Pressure Pumping product line in North America and seasonality in all international markets.”
The announcement is likely to affect share prices for Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL), and the other services companies. Baker Hughes’ Pressure Pumping division is suffering from a downturn in production of shale gas as producers focus more on extracting higher-priced liquids.
The company’s cuts are significant:
Overall, the company expects North America operating profit before tax margin(1) for the first quarter of 2012 to be between 13.2% and 14.2% compared to 18.7% in the fourth quarter of 2011.
The operating profit before tax margin(1) outlook for international operations for the first quarter of 2012 is expected to be between 12.2% and 13.2% compared to 15.6% in the fourth quarter of 2011 due to seasonality of product sales, weather, geographic mix, and project delays in Latin America.
The company did not provide an EPS estimate. Baker Hughes will report results for its first quarter on April 24th.
Paul Ausick
It’s Your Money, Your Future—Own It (sponsor)
Retirement can be daunting, but it doesn’t need to be.
Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!
Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.