Baker Hughes back in black after three quarters

Oilfield services major Baker Hughes has booked $653 million profit in the fourth quarter of 2020, against $48 million same time last year.

This result also marks the company’s return to profit after posting third loss in a row at the end of Q3 last year.

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Nevertheless, Baker Huges reported adjusted net loss attributable to the company of $50 million, compared with a profit of $179 million in Q4 2020.

Revenue for the quarter was approximately $5.5 billion, down 13 per cent from Q3 2019, but up 9 per cent sequentially.

Year-over-year revenue revenue drop was driven by lower volume across the Oilfield Services, Oilfield Equipment, and Digital Solutions segments, partially offset by Turbomachinery & Process Solutions.

Full-year revenue was down some 13 per cent, against 2020 at $20.7 billion.

Baker Hughes booked orders of $5.2 billion for the quarter, up 2 per cent sequentially and down 25 per cent year-over-year.

The sequential increase was a result of higher order intake in Oilfield Equipment, and Digital Solutions, partially offset by lower orders in Oilfield Services, and Turbomachinery & Process Solutions. Equipment orders were down 10 per cent sequentially and service orders were up 13 per cent.

Year-over-year, the decline in orders was a result of lower order intake across all segments.

On a GAAP basis, operating income for the fourth quarter of 2020 was $182 million. Operating income increased $230 million sequentially and decreased $149 million year-over-year. Total segment operating income was $573 million for the fourth quarter of 2020, up 64 per cent sequentially and down 14 per cent year-over-year.

Lorenzo Simonelli, Baker Hughes chairman and chief executive officer, said:

“Despite an incredibly challenging year for the industry in 2020, we generated over $500 million in free cash flow, booked $6.4 billion in TPS orders, and executed on our substantial cost-out and restructuring program. We also took several important steps to accelerate our strategy and invest in energy transition technologies, helping to position the company for the future.

“As we look ahead to 2021, we are cautiously optimistic that the global economy and oil demand will begin to recover from the impact of the global pandemic.

“We believe this macro environment likely translates into a tepid investment environment for oil and gas during the first half of 2021. However, we expect spending and activity levels to gain momentum through the year as the macro environment improves, likely setting up the industry for stronger growth in 2022.”

The company has recognised net loss in 2020 of close to $10 billion, against $128 million profit in 2019.