Baker Hughes Co. reported a third straight quarterly loss on Oct. 21, as a coronavirus-induced slump in commodity prices continued to hurt demand for equipment and services.
Producers have been drilling fewer wells following a collapse in crude oil prices this year as demand for oil products has sunk. The downturn has hit rivals Schlumberger NV and Halliburton Co. as well, with both reporting quarterly losses.
Global oil prices were trading around $42.46 per barrel Oct. 21, down about 1.62%, as rising coronavirus cases in places like Europe and the United States threaten to stall any recovery in demand.
“After significant turmoil during the first half of the year, oil markets have somewhat stabilized. However, demand recovery is beginning to level off and significant excess capacity remains, which could create volatility in the future,” said Lorenzo Simonelli, Baker Hughes chairman and CEO.
Baker Hughes in July vowed to further cut costs to prepare for a longer period of oil price volatility.
The company was on track to “right-sizing its business” and to achieve $700 million in cost savings by the year-end, Simonelli said Oct. 21.
Revenue from Baker Hughes’ oilfield services unit, which accounts for nearly 46% of its total sales, fell 31% to $2.31 billion in the third quarter.
Orders in Baker Hughes' oilfield equipment business were down 58% year-over-year for the third quarter.
Shares were up about 2.13% to $13.92 in premarket trading.
Net loss attributable to the company was $170 million, or 25 cents per share, in the three months ended Sept. 30, compared with a profit of $57 million, or 11 cents per share, a year earlier.
On an adjusted basis, the company earned 4 cents per share, in line with Wall Street expectations, according to data from Refinitiv.
Revenue fell 14% to $5.05 billion, but beat analysts’ estimate of $4.78 billion.
Recommended Reading
Hess Corp. Boosts Bakken Output, Drilling Ahead of Chevron Merger
2024-01-31 - Hess Corp. increased its drilling activity and output from the Bakken play of North Dakota during the fourth quarter, the E&P reported in its latest earnings.
Petrie Partners: A Small Wonder
2024-02-01 - Petrie Partners may not be the biggest or flashiest investment bank on the block, but after over two decades, its executives have been around the block more than most.
CEO: Coterra ‘Deeply Curious’ on M&A Amid E&P Consolidation Wave
2024-02-26 - Coterra Energy has yet to get in on the large-scale M&A wave sweeping across the Lower 48—but CEO Tom Jorden said Coterra is keeping an eye on acquisition opportunities.
CEO: Magnolia Hunting Giddings Bolt-ons that ‘Pack a Punch’ in ‘24
2024-02-16 - Magnolia Oil & Gas plans to boost production volumes in the single digits this year, with the majority of the growth coming from the Giddings Field.
Endeavor Integration Brings Capital Efficiency, Durability to Diamondback
2024-02-22 - The combined Diamondback-Endeavor deal is expected to realize $3 billion in synergies and have 12 years of sub-$40/bbl breakeven inventory.