* Q2 revenue drops 33 pct, but beats analysts estimates
* Strongest revenue beat in at least 8 quarters
* Producers returning to incomplete wells boosts demand
* N. America rev down 25 pct vs UBS estimates of 40 pct drop
* Baker Hughes shares up 3 pct, Halliburton up 4 pct
(Adds analyst comments, updates shares)
July 21 (Reuters) - Oilfield services provider Baker Hughes
Inc's BHI.N quarterly revenue fell less than expected as more
and more North American shale oil producers returned to complete
wells they had abandoned as crude oil prices slumped.
These producers had built up a heavy backlog of drilled but
uncompleted wells, but with oil steadying at about $50 per
barrel, some producers are now coming back to these wells.
Rising stage intensity - the practice of fracking more
stages per well to increase production - also helped Baker
Hughes stem revenue losses, said Societe Generale analyst Edward
Muztafago.
Baker Hughes's second-quarter revenue from North America,
which accounts for over a third of total revenue, decline 25
percent from the first quarter. UBS analyst Angeline Sedita was
expecting a 40 percent decline.
Halliburton Inc HAL.N , which is acquiring Baker Hughes,
said on Monday that while its second-quarter revenue from North
America fell 25 percent from the first, stage count declined
less than 10 percent.
Baker Hughes shares rose 3 percent to $61.32 in morning
trading, while Halliburton shares rose 4 percent to $42.46.
Industry leader Schlumberger Ltd SLB.N and No.2
Halliburton have also reported better-than-expected revenue and
said they expect an uptick in demand in North America this year.
ID:nL4N0XH3XN ID:nL4N0ZX4JG
Baker Hughes, however, said on Tuesday that it expects
unfavorable market conditions to persist for the rest of the
year.
"In North America, we don't anticipate activity to increase
while commodity prices remain depressed," Chief Executive Martin
Craighead said in a statement on Tuesday. ID:nPn393h7J
Baker Hughes' total revenue dropped 33 percent to $3.97
billion, but beat analysts' average estimate of $3.78 billion.
This was its strongest revenue performance in at least eight
quarters.
The company's adjusted loss of 14 cents per share was in
line with estimates, according to Thomson Reuters I/B/E/S.
Baker Hughes' stock had risen nearly 6 percent this year
through Monday. That is higher than Halliburton's 3.5 percent
gain. Schlumberger had fallen 2.2 percent, while the broader oil
equipment and services index .DJUSOI had dropped 9 percent.
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Graphic on Baker Hughes earnings http://graphics.thomsonreuters.com/14/oilfield-earns/index.html
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