Baker Hughes CEO and chairman Martin Craighead. Image courtesey of Vanderbilt Owen Graduate School of Management/Youtube.

Baker Hughes swung to a $159 million third quarter loss on Wednesday as low oil prices drag down demand for drilling services.

Revenue for the quarter was $3.8 billion, down 39 percent from the third quarter of 2014 and down 5 percent from the previous quarter.

On a GAAP basis, net loss attributable to Baker Hughes for the third quarter was $159 million or $0.36 per diluted share.

Adjusted EBITDA for the third quarter jumped 14 percent sequentially to $522 million, but still $666 million less than the company booked in the third quarter of 2014.

Adjusted net loss for the third quarter of 2015 was $22 million or $0.05 per diluted share, excluding $137 million in after-tax adjustments.

The adjustments include after-tax restructuring charges of $70 million and charges of $67 million after-tax for merger and other related costs.

Free cash flow for the quarter was $348 million following $56 million in restructuring payments.

For the quarter, capital expenditures dropped by $81 million from the previous quarter to $178 million, a 58 percent decline from the same quarter last year.

Depreciation and amortization expense for the third quarter was $432 million, relatively flat sequentially and down 5 percent compared to the prior year quarter.

Excluding merger-related costs, corporate costs were $26 million, down from $42 million in the prior quarter and $57 million in the third quarter of 2014.

The reduction in corporate costs is mainly a result of workforce reductions and lower discretionary spend, the company said.

North America revenue for the third quarter dropped 9 percent sequentially to $1.4 billion while Latin America revenues held steady from last quarter at $439 million.

“Compared to the third quarter of 2014, revenue in North America declined 57 percent on sharply lower activity and unfavorable pricing,” the company said.

Revenue in Europe/Africa/Russia Caspian also fell 9 percent sequentially to $791 million for the third quarter, primarily due to reduced activity in Africa and Continental Europe.

Revenue for the Middle East/Asia Pacific region ticked down by 1 percent from last quarter to $849 million.

The company’s Industrial Services unit booked $339 million in revenue, an 11 percent jump over the previous quarter.

“In the fourth quarter, we expect activity in North America to decline as our customers adjust activity for lower commodity prices, exacerbated by an extended holiday impact. Internationally, seasonal year-end product sales are not expected to offset the anticipated decline in activity,” Craighead added.

Baker Hughes is still waiting for regulators to clear its $34.6 billion merger with Halliburton.

The companies put more assets on the sale block last September as part of the merger.

The companies also amended their timing agreement with the Antitrust Division of the U.S. Department of Justice (DOJ) to extend the earliest closing date by three weeks to December 15, 2015, or or 30 days following the date that both companies have certified final, substantial compliance with the DOJ second request.


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