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Baker Hughes 3Q profit rises on record revenue

November 1, 2011

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HOUSTON—Oilfield-services provider Baker Hughes Inc. said Tuesday that third-quarter earnings nearly tripled and revenue hit a record as the company added rigs in Canada and drilling continued to recover in the Gulf of Mexico from last year's oil spill.

The earnings fell slightly below the forecast of analysts. Revenue matched expectations. The company's shares fell $3.14, or 5.4 percent, to $57.99 in premarket trading.

Baker Hughes said it was upbeat about the long term despite recent ups and downs in oil prices. It said most projects by its oil company customers would be profitable even at lower energy prices, and the companies have enough cash keep the work going.

Specialists such as Baker Hughes also hope to benefit as production focuses on harder-to-find reserves. That trend is already playing out with natural gas in the United States, and the company predicted it will happen elsewhere around the world over time.

Third-quarter net income climbed to $706 million, or $1.61 per share, compared with $255 million, or 59 cents per share, a year earlier. It was more than double the profit of the second quarter.

Excluding items such as a tax benefit from reorganizing foreign subsidiaries, the company said it would have earned $1.18 per share in the latest quarter.

Revenue rose 27 percent, to $5.18 billion.

Analysts surveyed by FactSet expected adjusted income of $1.21 per share on $5.18 billion revenue.

During the third quarter, Baker Hughes' debt rose by $292 million, to $3.9 billion, and cash and short-term investments fell by $134 million, to $803 million. The company issued $750 million in new notes and redeemed $500 million worth.