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Shares of Baker Hughes jump on smaller-than-expected loss

Traders gather at the post that handles Baker Hughes on the floor of the New York Stock Exchange.
Richard Drew | AP
Traders gather at the post that handles Baker Hughes on the floor of the New York Stock Exchange.

Shares of Baker Hughes surged to a one-year high on Tuesday after the oilfield services firm reported a smaller quarterly loss than expected as it reduced its expenses.

The stock gained about 4 percent closing at $54.39 a share, after striking an intraday peak of $57.37, the highest level since October 2015.

For the day, the stock was one of the top performers in the CNBC IQ 100 index of large-cap innovation leaders.

Baker Hughes and other firms that provide services to big integrated oil and gas companies and smaller independent drillers have seen their stock prices fall amid a profit slump brought on by a two-year oil price rout. The firms have been forced to offer deep discounts to their customers as crude prices fell from above $100 a barrel in 2014 to $26 last winter. Crude has since stabilized near $50 a barrel.

On Tuesday Baker Hughes reported a loss of 15 cents per share, compared with expectations for a 44-cent loss. Revenues came in at $2.35 billion, missing consensus estimates of $2.41 billion.

Capital One called the report a "huge positive," saying Baker Hughes crossed off two items the bank wanted to see: a healthy beat on earnings before certain expenses and incremental cost savings.

"Cost savings are well ahead of schedule, and '16 annualized cost savings are now expected to be $650MM vs the previous target of $500MM," Capital One said in a research note.

Investment bank Jefferies also viewed the report as positive. "Cost savings drove beats in every region and the implication is estimates have to be reset higher," it remarked in a note.

Last week, Baker Hughes' larger rival Halliburton reported a surprise profit of 1 cent per share, also due largely to cost-cutting measures. Schlumberger, the world's top oilfield services firm, came in 3 cents per share above estimates last week, though earnings fell 82 percent from a year earlier, reflecting a still challenging environment and costs associated with its acquisition of Cameron International.

CNBC's Peter Schacknow and Gina Francolla contributed reporting to this story.