Baker Hughes Adjusted Profit Rises On Strong Demand
(Reuters) — Baker Hughes Inc. reported a 46 per cent jump in quarterly adjusted profit on Wednesday on stronger performances in both oilfield services and turbomachinery, sending its shares higher in early New York trading.
Results were lifted by sales of liquefied natural gas plant equipment and by oilfield operations outside the United States, contrasting with steep falls in revenue at some rivals hurt by declining shale spending in North America.
Adjusted net income rose to $114 million, or 21 cents per share from $78 million, or 19 cents per share, a year ago. Revenue rose four per cent to $5.88 billion.
“Our view is that natural gas demand will grow at more than twice the pace of oil, and LNG demand growth will be higher still at an annual rate of four per cent to five per cent,” chief executive officer Lorenzo Simonelli said on Wednesday.
Still, executives for the company warned investors that business would continue to slow in North America, forecasting high single-digit to low double-digit falls in drilling and completion spending by customers in the fourth quarter and next year.
The company said about 80 million tons per annum of new LNG plant capacity received financial approvals since the fourth quarter of 2018, and said the industry was on track to reach approvals for 100 MTPA by year-end.
Baker Hughes anticipates more LNG projects will reach final investment decisions in 2020, Simonelli told investors on Wednesday, adding that the company could continue to benefit from growing natural gas demand.
Analysts said the results were positive, and shares of Baker Hughes were up 3.7 per cent in early trading at $22.69.
Baker Hughes reported a 35 per cent rise in orders to $7.8 billion.
Oilfield services, its largest unit, reported profit up 19 per cent over a year ago, to $274 million, boosted by strong growth in Asia Pacific, the Middle East and Europe.
Operating income rose 22 per cent in its turbomachinery and process solutions unit, which includes gas turbines and compressors used in LNG processes. Revenue in that business fell 14 per cent, partly due to the sale of a business.
Net income attributable to the company rose to $57 million in the three months to Sept. 30 from $13 million a year earlier.
General Electric Co. has reduced its stake in Baker Hughes to roughly 37 per cent, from just over 50 per cent. Baker Hughes this month changed its name, rebranded and started trading independently under a new stock symbol.
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