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Oilfield services provider BakerHughes Inc bumped up its savings target for 2016 after a tight leash on costs helped the company post a much smaller than expected quarterly loss.
The company’s stock gained 8% in early trading to $56.42 a share, hitting a one-year high.
BakerHughes, whose planned merger with closest rival Halliburton Co fell through in May due to opposition from regulators, said it aimed to cut costs by $650 million this year, higher than the $500 million it had previously projected.
“We’re extraordinarily impressed and these results should officially put to rest any/all nonsense market concerns about state/health of the organization,” analysts at Tudor Pickering wrote in a note.
BakerHughes also said on Tuesday it expected activity in North America to modestly increase in the fourth quarter, as customers slowly begin to ramp up.
Larger rival Schlumberger Ltd, the world’s No.1 oilfield services provider, said on Friday there were early signs of recovery in industry activity in most parts of the world.
Drillers added 11 oil rigs in the United States in the week to Oct. 21, bringing the total count up to 443, the most since February, according to a survey by Baker Hughes, as crude prices hold over $50 a barrel.
However, the company said it expected activity to decline in the international market, with continued pricing pressure.
Revenue fell 37.8 percent to $2.35 billion in the third quarter ended Sept. 30, while analysts’ on average had expected $2.41 billion, according to Thomson Reuters I/B/E/S.
Total costs and expenses fell 31.2 percent, helping the company report an adjusted loss of 15 cents per share, much smaller than the 44 cents analysts had expected.
Net loss attributable to Baker Hughes widened to $429 million, or $1 per share, due to charges.
BakerHughes said it recorded after-tax charges of $365 million related to asset and goodwill impairments, restructuring and litigation settlements in the quarter.
- Markets Insider
(Reuters reporting by Anet Josline Pinto and Vishaka George in Bengaluru; Editing by Sriraj Kalluvila)