Baker Hughes loses $1 billion in the fourth quarter

Oil field services company Baker Hughes posted a $1 billion loss during the fourth quarter of 2015, suffering from a global decline in active oil rigs and ongoing pricing pressure from its customers.

The loss reflected $1.25 billion in impairment and restructuring charges related to the adjustment of the carrying value of its onshore pressure pumping business in North America and other assets.

The Houston-based oil field services company, which is being acquired by its competitor Halliburton, reported a loss of $2.35 per share during the three-month period ending Dec. 31. That was a reversal from than the profit of $663 million, or $1.52 per share, posted by the company during the same time period in 2014.

Quarterly revenue fell by 49 percent due to a “sharp decrease in activity and ongoing pricing pressure as E&P companies further adjust their spending to the continued drop in commodity prices,” CEO Martin Craighead said in a statement.

Overall, Baker Hughes closed the year with a $2 billion net loss as the worst oil crash in years slashed more than one-third of its revenue in 2015 compared to the prior year.

“Our 2015 results are reflective of an extremely difficult and increasingly challenging year for the industry,” Craighead said.

The company forecasts additional tough times in 2016 as crude prices remain stuck around $30 a barrel, an anemic level which could spur another 30 percent decline in the global rig count, Craighead said.

Baker Hughes will try to ride out the tough market conditions by capitalizing on efforts by exploration and production companies to squeeze as much as possible from their existing investments while continuing to aggressively cut costs, Craighead said.

In the meantime, the company remains committed to closing its deal with Halliburton, despite the long regulatory delays that have raised questions about the merger’s ability to cross the finish line, Craighead said.

“I continue to be extremely pleased with the efforts of our team supporting the regulatory review process and developing plans for a successful integration,” he said. “We are fully dedicated to closing the merger as early as possible.”

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