* Q4 EPS $1.41 tops consensus forecast
* Says Q1, 2009 estimates too high
* Stock up 9 pct; rivals Schlumberger, Halliburton also up (Adds ConocoPhillips outlook, Tidewater results and comment)
By Steve James and Braden Reddall
NEW YORK/SAN FRANCISCO, Jan 28 (Reuters) - Oilfield services company Baker Hughes Inc BHI.N posted higher profit on Wednesday, but said 2009 earnings forecasts were too high as it braces for a sharp drop in North American rig activity.
The company, which just announced job cuts, indicated there could be more as the industry awaits a recovery in global economic growth and oil and gas prices.
Baker Hughes was positive about new projects in Brazil and Mexico and said that spending $350 million to $400 million to build its infrastructure was a top priority.
The company’s shares, which had been underperforming rivals so far in 2009, rose more than 9 percent to $35.86 in midday trading on the New York Stock Exchange.
“Yesterday we announced 1,500 layoffs and we hope that’s the end of it,” Chief Executive Chad Deaton told analysts on a conference call. “But if (rig) activity continues to go down, we will take another look.”
The company expects the number of rigs drilling for oil and gas in North America to drop by 25 percent to 30 percent this year, from an average of 1,879 in 2008, he said. Internationally, he sees the rig count dropping by 10 percent.
The company’s North American rig forecast was changing daily. “Originally, we thought it would drop to 1,500, and now we’re predicting it will be further than that,” he said.
“We will probably see it down to 1,200 rigs, but how long will it stay there? The difference with this cycle is that we are dealing with a global recession.”
ConocoPhillips (COP.N), the third-largest U.S. oil company, said on Wednesday it was slashing it 2009 budget and cutting 4 percent of its workforce. [ID:nN28348458]
But Tidewater Inc TDW.N, the world’s largest provider of offshore supply vessels to the energy industry, reported a quarterly profit that comfortably beat Wall Street estimates. Despite the industry’s mounting challenges, Chief Executive Dean Taylor was broadly confident about its long-term outlook.
“We know that the world consumes a lot of oil and gas every day. And we know that the challenge of finding and producing those hydrocarbons is not becoming any easier,” Taylor said on a conference call. “In fact, in a low oil and gas price environment, this challenge becomes that much greater.”
Baker Hughes said fourth-quarter net profit rose to $432 million, or $1.41 per share, from $400.5 million, or $1.26 per share, a year ago. Revenue rose 16 percent to $3.19 billion.
Analysts had expected $1.25 per share on revenue of $2.99 billion, according the averages on Reuters Estimates.
Echoing the views of larger rivals Schlumberger Ltd (SLB.N) and Halliburton Co (HAL.N), Baker Hughes said its 2009 outlook has continued to deteriorate as clients -- who face recession, lower oil prices and a credit crunch -- trim exploration plans, giving priority to spending on production and development.
“Given this outlook, current consensus earning estimates for (the first quarter) and the full 2009 are too high,” Deaton said on the call.
He gave no figures, but analysts’ average forecasts are 98 cents per share for this quarter and $3.62 per share for 2009.
Deaton sees weakness in Russia, the Caspian region and Britain, but was bullish on new projects in Brazil and Mexico.
Baker Hughes said on Tuesday it was cutting 4 percent of its workforce, joining rivals in responding to weaker oilfield activity due to a collapse in energy prices since last July.
Shares of Halliburton and Schlumberger were both up about 3 percent on Wednesday. Halliburton reported better-than-expected fourth-quarter profit on Monday, alongside plans for a $559 million settlement of a bribery probe. [ID:nN24541808] (Reporting by Steve James in New York and Braden Reddall in San Francisco; Additional reporting by Ajay Kamalakaran in Bangalore; Editing by Gopakumar Warrier, John Wallace and Gunna Dickson)