Oilfield service giant Baker Hughes said today operating profits for the first quarter of 2012 were likely to be worse than expected.
The warning comes as North American explorers shift to liquids from natural gas, leading to higher costs and demand for services provided by the company.
Houston-based Baker, which has a large presence in the north-east, forecast first-quarter North America pre-tax operating profit margins of 13.2-14.2%, compared with 18.7% in the fourth quarter of 2011.
For international operations, the company expects margins in the first quarter of 2012 to be 12.2-13.2%, down from 15.6% in the final quarter of last year.
Industry-wide costs are going up and most oilfield service companies are struggling to swiftly move their rigs to oil and natural gas liquid fields, where activities are increasing.
Baker Hughes and bigger rival Halliburton have more exposure to the US than industry leader Schlumberger.