Record service sector results

Record third quarter results are reported from Baker Hughes, Core Laboratories, Halliburton and Schlumberger and CGG is returning to profit. But many service companies issue warnings on near to mid term activity levels.


Baker Hughes Inc. (BHI) has reported third quarter operating profit after tax, excluding non-recurring items, of $134.7 million, up 95% on the same period last year. Total revenues for the period were $1,436.0 million (6% up). BHI president Mike Wiley attributed the record results to “Strong North American activity, improved margin performance and improving international activity.” BHI has also reduced its debt by $1 billion from its peak level in year 2000.


CGG posted revenues of € 178.7 million, up 23 % on the same quarter in 2000. For the period, CGG’s operating result shows a € 8.6 million profit, a significant improvement compared to the 2000 third quarter operating loss of € 7.7 million. Processing-Reservoir activity saw sales of € 25.9 million, a rise of 6 % in what is described as ‘a slowly recovering market.’ Commenting the results, CGG chairman and CEO Robert Brunck said, “These results are in line with our projections. We confirm our objective of a profitable fiscal year 2001. It is clear that the recent tragic events and their consequences on the international situation constitute an element of uncertainty for the short to possibly medium term.”.

Core Lab

Core Laboratories third quarter 2001 was the most profitable in the company’s history. Net income for the period topped $9 million (57% up on the same period last year) on revenues of $ 97 million. Core Lab plans to restructure its underperforming seismic and engineering field study groups in Reservoir Management. From discussions with its clients, the company anticipates North American spending dropping by 20% to 30% in the fourth quarter and continuing at these lower levels into the first half of 2002. International spending should increase 5% to 10% over the same period.


Halliburton reported 2001 third quarter net income from continuing operations at $181 million, an increase of 39% over the prior year quarter, the highest earnings since the merger with Dresser in 1998. The Energy Services Group segment posted third quarter revenues of $2.3 billion, up 33% on the period last year. Halliburton’s Landmark Graphics unit also posted a ‘strong operating profit’ during the quarter.


Paradigm Geophysical Revenue, for the quarter was $17.8 million (24% up on same period last year). Chairman and CEO Eldad Weiss commented “The sudden change in the business climate this quarter resulted in some of our clients holding back on software purchase decisions [..] We are encouraged by the continuing growth in our services operations.”


Schlumberger’s third quarter operating revenue was $3.6 billion and net income of $195 million. Oilfield Services revenue increased 36% including WesternGeco over the third quarter of 2000. Chairman and CEO Euan Baird commented, “Following September 11, most observers have lowered their predictions of demand for 2002. We believe they are overly pessimistic and that markets will recover sooner rather than later. [..] any recovery in world economies will spark increased demand for oilfield services.”

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