Baker Hughes posts $417 million loss as it prepares for GE merger

The lobby of the Baker Hughes office in Houston. (Julio Cortez / Houston Chronicle)
The lobby of the Baker Hughes office in Houston. (Julio Cortez / Houston Chronicle)

Baker Hughes reported it lost $417 million during the final quarter of 2016 as it preps for its merger with General Electric this coming spring.

The Houston-based oilfield services giant’s quarter compares to a larger loss of more than $1 billion during the fourth quarter of 2015. However, Baker Hughes’ quarterly revenues fell nearly 30 percent down to $2.41 billion from $3.39 billion a year ago. However, the quarterly revenues did grow 2 percent from the third quarter of 2016, driven by the beginnings of a rebound in U.S. shale. Much of the quarterly loss was attributed to higher international tax rate exchanges.

For the full year, Baker’s $2.74 billion annual loss comes in bigger than a $1.97 billion loss in 2015. The company’s revenues fell 37 percent on the year as the two-year oil bust came to a seeming end.

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Baker Hughes reported another 1,000 job reductions in the fourth quarter. However, it wasn’t immediately clear if these were through terminations or attrition. The cuts do not appear related to the separation of the BJ Services pressure pumping business into a standalone company at the end of December.

Those 1,000 jobs cut globally bring its tally of workforce reductions to 29,000 positions in two years during the oil bust. That includes at least 25,000 terminations and about 4,000 job lost via attrition. Baker Hughes still employs about 33,000 people, down from a headcount of more than 62,000 employees before the oil bust began in late 2014.

The Tomball-based BJ Services is now operating independently after Baker Hughes sold stakes to Houston-based CSL Capital Management private equity firm and Goldman Sach’s merchant banking fund, called West Street Energy Partners. Baker Hughes kept a 46.7 percent ownership stake in BJ Services.

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The BJ deal comes less than a month after it was announced that Baker Hughes is combining with a unit of General Electric in a $32 billion merger that would create an expanded Baker Hughes. GE, based in Boston, would own 62.5 percent of the combined company, which will continue to trade under Baker Hughes’ BHI stock ticker.

“GE Oil & Gas and Baker Hughes are an exceptional fit, with highly talented teams, similar cultures of innovation, and industry-leading capabilities,” said Baker Chairman and Chief Executive Martin Craighead. “The integration planning teams are making good progress, the regulatory review process is proceeding as planned, and we continue to expect a mid-2017 close.”

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