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Baker Hughes (NASDAQ: BKR) on Wednesday reported adjusted earnings per share for the first quarter, beating analyst estimates, reiterating a view in the oilfield services industry that the current oil and gas spending cycle could last for years.
Baker Hughes, the first of the top three oilfield services to report Q1 earnings, said today that its adjusted diluted earnings per share stood at $0.28, down by 25% on the quarter, but an increase of 85% compared to the first quarter of 2022. The past quarter’s EPS beat the analyst consensus estimate of $0.26 compiled by The Wall Street Journal.
After the results were released, Baker Hughes’ shares rose by nearly 2% in pre-market trade in New York on Wednesday.
The company’s North American revenues jumped by 20% year-over-year, while international revenues rose by 18% in the first quarter compared to the first quarter of 2022. Total revenue increased by 18% annually to $5.7 billion, while orders rose by 12% year-over-year to $7.6 billion for Q1 2023.
“We continue to believe that the current environment remains unique, with a spending cycle that is more durable and less sensitive to commodity price swings, relative to prior cycles,” Lorenzo Simonelli, Baker Hughes chairman and chief executive officer, said in a statement.
“Another notable characteristic of this cycle is the continued shift towards the development of natural gas and LNG. As the world increasingly recognizes the crucial role natural gas will play in the energy transition, serving as both a transition and destination fuel, the case for a multi-decade growth opportunity in gas is steadily improving as both a transition and destination fuel,” Simonelli added.
Despite fears of recessions and a potential hit to oil demand later this year, Baker Hughes continues to express optimistic views about oil demand and the oil cycle. The outlook from today reaffirmed the forecasts of the major oilfield companies from early this year that the upcycle could be a multi-year feature in the oilfield services sector, thanks to improving pricing and tight equipment and service capacity in certain markets.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.