News wire — Baker Hughes Co on Wednesday posted an adjusted third-quarter profit that topped Wall Street estimates, sending shares higher but warned of more market volatility as demand softens under high inflation and rising interest rates.
Baker is the first oilfield services firm to report quarterly results, and its beat bodes well for rivals Schlumberger and Halliburton, both of which report in coming days.
Brent crude averaged $98.96 a barrel during the third quarter, up about 33% from a year ago. It has cooled on concerns of a global recession and currently trades around $90.75 a barrel.
On an adjusted basis, Baker Hughes posted a profit of $264 million, or 26 cents a share, up from $141 million a year earlier. The profit topped analysts’ forecasts for around 24 cents per share, according to Refinitiv data.
The company anticipates double-digit revenue growth in its international oilfield services business in 2023 and modest growth in its North America business, driven largely by public firms.
“Positive update as margins outpace expectations,” wrote analysts at Tudor, Pickering, Holt & Co, pointing to third-quarter margins of 9.4% that topped their expectations of 8%.
Baker’s finance chief Brian Worrell will step down and exit the firm by the second quarter of 2023, the company said. Former Newmont Corp mining executive Nancy Buese will replace him effective Nov. 2.
Restructuring and impairment charges that totaled $230 million drove a net loss of $17 million, or 2 cents per share, for the three months ended Sept. 30, compared with a profit of $8 million, or 1 cent per share, a year earlier.
The company recently revamped its organizational structure into two business units from four, one focused on oilfield equipment and services and the other devoted to industrial energy and technology.
Its oilfield business segments accounted for about 63% of its revenue during the quarter through September.
Revenue from its oilfield equipment unit dipped 7% year-over-year, driven in part by lower volumes in its Subsea Production Systems business, while its TPS revenue declined 8% over that period amid lower equipment and project volumes.
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