Baker Hughes Predicts Oil Market Growth, Misses on Profit

Tuesday, October 30, 2018

Baker Hughes, General Electric Co's oilfield services arm, fell just short of estimates for profit in the third quarter while forecasting a rise in North American and foreign markets in 2019 that ran contrary to signals from its peers.

The results follow those for bigger rivals Schlumberger and Halliburton Co, which barely beat quarterly profit estimates and warned of slowing North America growth in the ongoing quarter.

U.S. rig count, an early indicator of future output, has risen from a year ago thanks to a ramp up in production by companies seeking to benefit from a surge in global oil prices .

But oil services firms have seen demand for their services soften as U.S. producers cut down on spending, and transportation bottlenecks in the Permian Basin of West Texas and New Mexico pushed the price of regional crude lower.

Baker Hughes said revenue in oilfield services, which accounts for more than half of total sales, rose 12.5 percent to about $3 billion from a year earlier.

Revenue from its oilfield equipment business, which includes deepwater drilling, rose 3 percent to $631 million.

"The offshore market is the strongest it has been in many years and the improving tender and order activity is an encouraging sign as we look out to 2019 and beyond," said Chief Executive Lorenzo Simonelli in a statement.

The company reported adjusted net income of $78 million, or 19 cents per share, in the third quarter ended Sept. 30, compared with an adjusted loss of $7 million, or 2 cents per share, a year earlier.

Excluding one-time items, the company earned 19 cents per share, missing analysts' average estimate of 20 cents per share, according to Refinitiv estimates.

Total revenue rose to $5.67 billion from $5.30 billion.


(Reporting by John Benny; Editing by Sriraj Kalluvila)

Categories: Technology Finance Shale Oil & Gas Deepwater Industry News North America Hardware

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