Baker Hughes Delivers Increase in Q1 Profit
Baker Hughes Incorporated released results for the first quarter of 2014. Revenue of $5.7 billion for the quarter are up 10% year over year.
Adjusted net income for the first quarter of 2014 excludes after-tax severance charges of $21 million ($0.05 per diluted share) in North America and after-tax costs associated with a technology royalty agreement of $20 million ($0.05 per diluted share).
“This quarter we delivered an increase in profit margins and earnings,” said Martin Craighead, Baker Hughes Chairman and Chief Executive Officer. “Our performance is the result of actions to optimize operational efficiency, along with increasing demand for several innovative new product offerings.”
“The benefit of these actions can be seen in our North America operations this quarter. On an adjusted basis, this segment delivered 200 basis points of margin improvement, despite a drop in well count caused by poor weather in the Rockies and northeast United States. Outside of North America, our operations experienced the typical seasonal decline in product sales to start the year, along with severe weather conditions in the North Sea and Russia, leading to a 5% sequential drop in revenue for our international business. However, resumption of our activity in Iraq, along with increased demand for high technology services in Africa, the Middle East, and Asia Pacific, led to a 6% sequential increase in international adjusted operating profit.
Compared to the same quarter last year, our adjusted earnings per share have increased 29%. Based on this positive performance, and our favorable outlook for our industry, we repurchased $200 million of our shares during the first quarter.
The demand for both innovative and integrated products and services has never been greater. We are continuing to redefine the technical limits for our customers in drilling efficiencies, production optimization, and ultimate recovery. These factors, along with our continued focus on operating efficiency, are driving profitable growth in the company, leading to an increase in our shareholders’ returns.”
Share repurchases amounted to $200 million or 3.4 million shares for the first quarter of 2014, which results in a remaining amount of $1.45 billion under the current authorization.
Capital expenditures were $439 million, depreciation and amortization expense was $437 million, and dividend payments were $66 million in the first quarter of 2014.
Cash decreased by $199 million to $1.20 billion as of March 31, 2014, compared to $1.40 billion at December 31, 2013. Debt increased by $122 million to $4.50 billion as of March 31, 2014, compared to $4.38 billion at December 31, 2013.
Adjusted EBITDA in the first quarter of 2014 was $1,047 million, an increase of $92 million, compared to the fourth quarter of 2013 and an increase of $154 million compared to the first quarter of 2013.
