HAL Halliburton Co

Baker Hughes Inc. swung to a fourth-quarter loss and reported a 49% decline in revenue as the oil-field services company continues to feel the impact from the downturn in energy prices.

The company, which is in agreement to be acquired by Halliburton Co., said Thursday that it sees current market conditions causing further declines this year in the number of rigs being operated.

In the fourth quarter, Baker was hurt by weakness in its North America business, where revenue slid by two-thirds to $1.1 billion. The company cited a steep drop in activity and the deterioration of industry pricing conditions since early 2015.

Chief Executive Martin Craigshead said in prepared remarks on Thursday that "since the fourth quarter of 2014, the global rig count has declined 46% as our customers adjusted their spending to align with declining commodity prices."

Mr. Craigshead said revenue in the December quarter dropped 10% from the third quarter on a "sharp decrease in activity and ongoing pricing pressure as [exploration and production] companies further adjust their spending to the continued drop in commodity prices."

Looking ahead, he said that "at current commodity prices, the global rig count could decline as much as 30% in 2016, as our customers' challenges of maximizing production, lowering their overall costs, and protecting cash flows are now more acute."

Overall, Baker Hughes reported a loss of $1.3 billion, or $2.35 a share, compared with a year-earlier profit of $663 million, or $1.52 a share. Excluding one-time items—which included a write-down of its pressure-pumping product line in North America, restructuring charges and expenses related to the Halliburton deal—the adjusted per-share loss was 21 cents, compared with year-earlier adjusted per-share earnings of $1.44.

Revenue slumped to $3.39 billion from $6.64 billion.

Analysts polled by Thomson Reuters expected a per-share loss of 10 cents and revenue of $3.47 billion.

The pending $35 billion acquisition of Baker Hughes by Halliburton is facing more regulatory hurdles since European Union regulators opened a full-blown antitrust investigation into the deal earlier this month, warning it raised "serious potential competition concerns."

The pending merger, which would unite the second- and third-largest oil-field services suppliers, already has been facing a growing list of antitrust concerns in the U.S., even as the slump in oil prices complicates the firms' efforts to find buyers for any assets that might need to be sold to ease regulators' concerns.

Oil-field services company have been cutting costs as customers slash their spending plans to cope with a prolonged downturn in energy prices. On Monday, Halliburton laid off an additional 4,000 workers at the end of last year as it lost money in the fourth quarter on its oil-field drilling and services businesses.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

January 28, 2016 09:15 ET (14:15 GMT)

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