Baker Hughes’ revenue of US$4 billion in 2Q 2015 marked a 33% drop year-over-year, and the company says it sees no relief in 2H 2015 as unfavorable market dynamics are expected to continue.
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On a GAAP basis, net loss attributable to the company for 2Q 2015 was $188 million, Baker Hughes added.
"Revenue of $4 billion for the second quarter declined 33% year-over-year, outperforming the 36% drop in the global rig count, despite incremental headwinds from deteriorating pricing and unfavorable currency changes. Even though the severity of the revenue decline has compressed our margins, we have minimized the impact by aggressively reducing costs and rightsizing our operational footprint. These actions have resulted in decremental margins of 35% compared to the prior year, a significant improvement from the prior industry downturn. Furthermore, earnings for the quarter were impacted by an unfavorable tax rate, which resulted primarily from a change in the geographic mix of earnings,” Martin Craighead, Baker Hughes chairman and CEO said.
Regionally, Baker Hughes' revenue took the biggest hit in North America at $1.5 billion, a 47% dip compared to 2Q 2014. Baker Hughes attributed the reduction to customer spending and an unfavorable pricing environment.
Adjusted EBITDA took at 60% dive compared to last year at $459 million in 2Q 2015, a decrease of $700 million in 2Q 2014.
The company’s adjusted net loss (a non-GAAP measure) for 2Q 2015 was $62 million.
Excluding merger-related costs of $40 million in the current quarter, corporate costs were $42 million, compared to $73 million 2Q 2014. The reduction in corporate costs is a result of workforce reductions and lower discretionary spend, Baker Hughes reported.
"Looking ahead to the second half of 2015, we expect these unfavorable market dynamics to persist,” Craighead said.
Its Latin America revenue came in at $439 million, a decrease of $105 million or 19% year-over-year.
In Europe, Africa, and Russian Caspian areas, revenue was $869 million, a 22% drop from 2Q 2014.
In the Middle East and Asia Pacific, Baker Hughes suffered a 22% year-over-year reduction with a reported $856 million.
Baker Hughes' pending merger partner Halliburton, also saw its 2Q 2015 numbers drop into the red zone this week, with its total revenue taking a 16% dip compared to last quarter.
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