Baker Hughes said operating earnings before one-time charges forthe third calendar quarter will be roughly half of the 36cents/share Wall Street consensus. Baker Hughes, which merged withWestern Atlas last month , said continuing declines in activity inthe Western Hemisphere, emerging softness in several EasternHemisphere markets and modest price erosion due to activitydeclines are the reason.
Additionally, hurricane and tropical storm delays in the Gulf ofMexico and a one-quarter overlap of corporate expenses from theWestern Atlas merger will also hurt earnings. Earlier this month,Baker changed its fiscal year-end from Sept. 30 to Dec. 31.
Baker has said it will take a merger and activity related chargein the third quarter, and the company will cut more than 2,000jobs, about 6% of total headcount. The company cut 700 jobs in thesecond quarter. The company said it is sizing itself for a 1999upstream E&P spending level that could be down as much as 10%from 1998 levels.
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