BJ Services Company (BJS) reported its fiscal first quarter (ended December 31, 2009) loss of 3 cents per share, compared to the Zacks Consensus Estimate of a profit of 5 cents and year-earlier quarter earnings of 56 cents. Revenue for the quarter decreased 34% year-over-year and increased 6% sequentially to $931.5 million.

BJ Services missed the quarter badly despite an increased service activity and a stable to slightly improved pressure pumping pricing environment in North American markets. However, sector leaders such as Schlumberger Ltd. (SLB), Halliburton Company (HAL) and Baker Hughes Inc. (BHI) have all posted profits that beat the Zacks Consensus Estimates. BJ Services is in the process of being taken over by Baker Hughes, which is expected to be closed in this quarter.

The company’s earnings surprise for the preceding four quarters varies between a negative 400% and a positive 21.7%, with the average being a negative 137.9%.

Segmental Performance

In the U.S./Mexico Pressure Pumping segment, revenue increased roughly 12% sequentially, with average active drilling rigs for the period going up 14%. The increase in revenue was driven by the contribution from the Permian Basin, South Texas, East Texas and Mid-Continent regions. Compared to the year-earlier quarter, revenue decreased 47% to $384.9 million on the back of a 42% decrease in average active drilling rigs.

The revenue decreases were mainly due to lower fracturing and cementing activity in the U.S., coupled with a significant reduction in pricing for its products and services. The segment’s operating loss was $16.9 million, with an operating margin of negative 4%.

In the Canadian Pressure Pumping segment, revenue increased 40% sequentially and decreased 38% year-over-year to $82.3 million. Operating profit for this segment was $4.5 million, a significant increase sequentially but down considerably year-over-year. The segment recorded an operating margin of 5%, compared to negative 3% in the prior quarter and 22% in the year-ago quarter. Lower drilling activity and weak pricing were the main reasons behind the depressing year-over-year margin comparison.

The International Pressure Pumping segment revenue was $283.9 million, which increased 10% sequentially but was down by the same percentage year-over-year. All the regions in this segment except Asia-Pacific witnessed a sequential increase in revenue during the quarter. The segment operating margin was 9%, compared to 8% in the previous quarter and 15% in the year-earlier quarter.

In the Oilfield Services Group segment, revenue decreased approximately 18% sequentially and 28% year-over-year to $180.5 million. The segment recorded an operating margin of 2%, compared to 14% in the previous quarter and 17% in the year-earlier quarter.

Capital spending totaled $39.7 million for the quarter. Cash at the end of the quarter was $261.1 million, while debt slightly increased to $509.7 million.

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