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Posted on 01/20/2015 5:37:26 AM PST by thackney
Baker Hughes said Tuesday it will lay off 7,000 mostly in the first quarter of 2015, amid a crude oil price slump and drilling slowdown it expects to worsen in the next quarter.
The announcement came shortly after the oil service company reported that its net income for the three months ending December 30 rose to an adjusted $629 million, or an adjusted earnings per share of $1.44 in 2014. In the same period of 2013, Baker Hughes reported $248 million in profit.
The company said it expects to book a one-time charge in the next period in the range of $160 million to $185 million for severance, and said it is reviewing its facilities for possible closures.
“While market demand ended up being more resilient in the fourth quarter than many had predicted, the recent declines seen in rig counts will clearly affect results in 2015,” said Martin Craighead, Baker Hughes Chairman and CEO, in a written statement.
“We are taking proactive steps to manage the business through these challenges, and we are well positioned financially for the months ahead.”
Tuesday its fourth-quarter profit rose in 2014 compared to the same period last year, despite falling crude prices and the beginning of a drilling slowdown that has hurt others in the industry.
Across 2014, the company said it saw $1.71 billion in net income, compared to $1.1 billion in 2013.
The company’s final quarter was led by its North America division, which posted a record revenue of $3.3 billion. Baker Hughes said that drilling activity rose onshore in Canada, West Texas and across the South until about the holidays, when the rig count began to decline.
Baker Hughes did not record any severance charges in the fourth quarter of 2014, but said that it had seen a $29 million charge in North America in the first quarter.
In November, rival oil service firm Halliburton said it would buy Baker Hughes for $34.6 billion in one of the biggest oil field service mergers recorded.
But, Why? Obama says the economy is shaking and in great condition. And things have probably never been better. And apple pie is going to start falling from the sky. And the seas are going to recede. Yada Yada Yada
The Oil Industry is being devastated with prices that are far too low to make a decent profit and many hard working folks Houston who have just been able to recover from the oil crash in 1986 will again be out of work.
The irony is that the majority of the people in Houston voted for Obama in 2008 and 2012 when oil prices were at $140.00 and $97.00 and now with Obama, the price of oil is below $50.00.
People across America should take a moment to look at the Oil Industry and the Houston economy and feel compassion for those losing their jobs or simply losing job security. These next few months or maybe even years will be challenging for Houston and all of Texas, challenging until oil goes above $100.00 and The Lone Star State will rise again.
Most of the folks that work in the oil/gas industry in the greater Houston area do not live within the city limits, but the far more conservative suburbs. Some years I don't even see a democrat even run on my local elections just outside of Houston.
Why?????????
Josh Earnest is on FoxNews right now proclaiming the greatest economic recovery, the largest employment growth in over a decade.
Lollipops and star dust for everyone.
This economy barely survived Obama the past six years because the oil and gas industry kept it going. That prop is gone. What is going to take its place, part-time jobs at fast food joints? Obozo better try hiking the minimum wage to $50/hr. to make up for the great wages people earned in the energy industry and that are now disappearing by the thousands. It doesn’t matter how cheap gas is if you don’t have the money to pay for it.
Ooh, ooh, ooh. What did Earnest say when the host aksed him/her about the labor participation rate being at an all-time low and food stamps participation being at all-time highs?
“$3.50-$4.00 a gallon fuel prices have been rough on many people and businesses for the last five years. There is no Schadenfreude in the problems of the oil industries...”
I think you are being insensitive to the plight of the American oil industry and the hard working oil field professionals.
Life in west Houston and the Woodlands is going to get very rough and there will be a trickle down effect that will negatively impact the local BMW dealerships, endless pool designers and First Class flights to Tahiti.
Where are the people going to shop if the Neiman Marcus closes?
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