Baker Hughes profit misses estimates on weak North America margins
(Reuters) - Baker Hughes Inc (BHI.N), the world's third-largest oilfield services provider, reported a lower-than-expected second-quarter profit due mainly to weak margins in North America.
However, Chief Executive Martin Craighead said he expected a strong rebound in North American operating margins in the current quarter as activity in Canada returns to normal.
North America-focused oilfield companies such as Baker Hughes, which derives almost half of its revenue from the region, have been hit by depressed natural gas prices that have hurt demand for drilling equipment.
Baker Hughes's pretax profit margin for North America declined to 8 percent from 13 percent, in part reflecting what Craighead described as "Canadian seasonality reaching its lowest level in four years".
The company's overall margins fell to 9 percent from 13 percent.
Net income attributable to Baker Hughes fell 45 percent to $240 million, or 54 cents per share, for the quarter ended June 30.
Excluding certain items, earnings were 61 cents per share, below analysts' expectation of 65 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 3 percent to $5.49 billion.
Sector leader Schlumberger Ltd (SLB.N), which is more active in international markets, reported a 49 percent rise in quarterly profit.
(Reporting by Thyagaraju Adinarayan in Bangalore and Braden Reddall in San Francisco; Editing by Saumyadeb Chakrabarty, Maju Samuel)