Crude prices held strong this…
The exit of British supermajor…
One of the largest oilfield services providers, Baker Hughes (NYSE: BKR), reported on Wednesday adjusted net income and revenues for Q3 below analyst expectations as supply chain constraints and cost inflation offset “relatively solid footing” of economies and oil demand growth.
Baker Hughes booked higher adjusted net income for the third quarter of this year compared to both the second quarter and the dismal third quarter of 2020. Yet, the earnings fell short of analyst expectations.
Adjusted earnings per share (EPS) came in at $0.16, up from $0.10 for Q2 and from $0.04 booked for the third quarter of 2020, but below the analyst consensus of $0.21 in The Wall Street Journal.
Third-quarter revenue of $5.093 billion also missed expectations of $5.321 billion.
The earnings miss sent Baker Hughes’ shares down by 3 percent in pre-market trade as of 8:52 a.m. EDT.
“We did experience some mixed results across our segments during the quarter,” Lorenzo Simonelli, Baker Hughes chairman and chief executive officer, said in a statement.
The oilfield services segment “was negatively impacted by Hurricane Ida, cost inflation in our chemicals business, and delivery issues stemming from supply chain constraints, while DS [Digital Solutions] also faced supply chain issues that impacted product deliveries,” Simonelli added.
Looking ahead, Baker Hughes expects higher demand for oil and gas as the global economic recovery continues.
“However, the pace of growth is being hampered by the COVID-19 Delta variant, global chip shortages, supply chain issues, and energy supply constraints. Despite these headwinds, global growth appears to be on relatively solid footing, underpinning a favorable outlook for the oil market, aided by continued spending discipline by the world’s largest producers,” Simonelli said on Wednesday.
On Tuesday, another oilfield services provider, Halliburton (NYSE: HAL), sounded more upbeat about customer demand next year, especially in the U.S., as it reported a third consecutive quarterly profit.
“In North America, we expect customer spending to increase in and around 20% next year, including solid net pricing gains,” chairman and CEO Jeff Miller said on the earnings call.
In the earnings release prior to the call, Miller said:
“I see a multi-year upcycle unfolding. Structural global commodity tightness drives increased demand for our services, both internationally and in North America.”
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Charles is a writer for Oilprice.com