HOUSTON (AP) -- Baker Hughes Inc. said Wednesday its third-quarter profit fell 87 percent on continuing price decreases, discounting and extra costs in a company reorganization.

Net income of $55 million, or 18 cents per share, compared with $429 million, or $1.39 per share, in the same quarter last year.

The latest quarter's results included pretax expenses of $38 million, or 8 cents per share, related to reorganization, severance and acquisition costs and an increase to the Houston company's allowance for bad debts.

Revenue slid 26 percent to $2.23 billion from $3.01 billion.

Analysts surveyed by Thomson Reuters expected earnings of 35 cents per share on revenue of $2.26 billion.

The price of crude oil has fallen from its 2009 high of $82 a barrel last month on investor doubts about the strength of the U.S. economy. Some analysts say the oil price could fall further if a monthly U.S. unemployment report on Friday confirms the number of jobless continues to swell.

Chad C. Deaton, chairman, president and CEO of Baker Hughes, said operating margins increased from the second quarter. Additionally, cost-cutting in the first half of the year made it possible for Baker Hughes to absorb additional price decreases and improve profitability.

"International results were disappointing with revenue less than expected and price discounting greater than expected," he said.

Deaton said the results also were affected by extra costs to assure a smooth transition in a reorganization announced earlier this year. Baker Hughes has said it is organizing its global operations by geography.

"Given the progress we are making on this company transformation these additional costs should largely be behind us as we enter 2010," he said.

Shares of Baker Hughes fell $1.87, or 4.3 percent, to $41.56 in midday trading. The stock has ranged from $24.40 to $48.19 over the past year.