UPDATE 3-Baker Hughes expects U.S. rig count to stabilize later in 2016

Wed Apr 27, 2016 11:10am EDT
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* Expects global rig count to drop steadily through end-2016

* N.America 2016 activity not expected to rise meaningfully

* Baker Hughes Q1 loss widens, revenue misses estimate

* Necessary deal-related costs hurting operating margins

* Shares up 3.4 pct in morning trading (Adds details, analysts' comments, graphic)

By Amrutha Gayathri

April 27 (Reuters) - Oilfield services provider Baker Hughes Inc said on Wednesday it expects U.S. rig count will begin to stabilize in the second half of 2016, while the rig count globally will drop steadily through the end of the year due to fewer new projects.

However, the company, which also reported a bigger first-quarter loss, said it does not expect drilling activity in the United States to increase meaningfully this year, even if the rig count steadies.

Baker Hughes, whose acquisition by bigger rival Halliburton Co is pending regulatory approval, said the terms of the merger agreement required it to retain certain expenses, which limited its ability to cut costs, and hurt operating margins.   Continued...