Baker Hughes sees higher profit in 2004 first quarter

Ray Tyson

Petroleum News Houston correspondent

Oilfield service giant Baker Hughes, which climbed out of the financial doldrums in the final quarter of 2003, said it expects operating profit for the first quarter of 2004 to exceed the year-ago period by about 50 percent.

“We expect 2004 will be a year of revenue and earnings growth,” Michael Wiley, Baker Hughes’ chief executive officer, said Feb. 12. That further confirms the general view of drillers and service companies that have reported 2003 fourth quarter earnings.

Houston-based Baker Hughes weighed in with a 2003 fourth-quarter profit of $106.6 million or 32 cents per share, compared to a roughly breakeven fourth quarter in 2002 and a loss of $59.5 million or 18 cents a share in the 2003 third quarter. Revenue for the 2003 fourth quarter was $1.44 billion, up 14 percent compared to $1.26 billion in the year ago-period and up 8 percent versus $1.34 billion in the third quarter of 2003.

Wiley said that while Baker Hughes had a “solid” 2003 fourth quarter, “both the North Sea and Gulf of Mexico activity levels were disappointing. Our sequential improvement is due in part to our cost reductions and resource redeployment from these regions to more active growth areas.”

Moreover, Baker Hughes’ positive outlook for 2004 does not include “a significant upturn” in activity in either the North Sea or Gulf of Mexico, Wiley said. “However, Russia, the Caspian, Latin America and the Middle East are all expected to be more active,” he added.