Baker Hughes warns of drop in profit margins

Profit warning: Baker Hughes expects fall in pre-tax operating margins

Baker Hughes

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Bill Lehane

 18 December 2012 12:40 GMT

US services giant Baker Hughes has warned its operating profit margins in North America may fall by as much as 2.2 percentage points for the fourth quarter compared to three months earlier due to an onshore slump and challenging pricing in pressure pumping.

The Houston-based, New York-listed outfit said that pre-tax operating profit margins for the fourth quarter results, due on 23 January, would be between 8.5% and 9.5%, compared to the third quarter’s 11.7%.

While Baker Hughes did not put a monetary figure on the squeeze, it admitted that both “revenue and profit margins” in North America would be “lower than previous expectations”.

The oilfield services player cited “weaker than anticipated onshore activity and further price erosion within pressure pumping operations” for the drop.

Baker Hughes is already under pressure over margins after seeing revenues increase 3% but profits fall…

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