Jan. 26 (UPI) -- Oilfield services company Baker Hughes reported mixed results with a small quarterly loss balancing against substantial cost reductions.
Baker Hughes, which provides support for the exploration and production side of the industry, said its revenue of $9.8 billion for 2016 was down 37 percent from the previous year.
"This reduction resulted from the steep decline in activity, as evident by the 32 percent drop in the average rig count, global pricing pressures, and sharply reduced revenue in onshore pressure pumping as we strived to maintain cash flow positive operations," the company said in its quarterly release.
Baker Hughes is one of the largest companies providing services to the exploration and production side of the energy sector. Energy companies during the market downturn that began in 2014 turned to joint-venture efforts in order to streamline capital and last year, GE Oil & Gas took a 62.5 percent stake in Baker Hughes for an entity with combined revenue of $32 billion.
The sector as a whole, meanwhile, started a rebound late last year as drilling efficiencies and crude oil prices improved. Rig counts provided by Baker Hughes show steady gains in North America in particular.
Revenue for the fourth quarter was $2.4 billion, up 2 percent from the previous term, but still off 29 percent year-on-year. Chairman and CEO Martin Craighead said annualized costs were cut by nearly $700 million, beating its own goals by about 40 percent.
"During 2016, against the back-drop of another difficult year for the industry, we achieved significant progress on our commitment to improve financial performance by reducing operational costs, optimizing our capital structure, and strengthening our commercial strategy," he said.
Rival CEOs at oilfield services companies Halliburton and Schlumberger expressed positive sentiment for the year ahead as crude oil prices stabilized in the wake of a decision by the Organization of Petroleum Exporting Countries to organize production declines to stabilize the market.
Looking ahead, Craighead said North America in particular should grow, though only "pockets" of expansion are expected internationally.