Baker Hughes posts profit driven by increase in revenues

Oilfield services provider Baker Hughes, a GE company, recorded a profit during the third quarter of 2018 driven by a 7% increase in revenues when compared to the prior-year period.

According to its financial report published on Tuesday, Baker Hughes’ revenue for the third quarter was $5.7 billion, up $118 million or 2% sequentially and up 7% year-over-year from revenues of $5.3 billion.

When compared to the last year’s quarter, Oilfield Services section of the business was up 12%, Digital Solutions was up 6%, and Oilfield Equipment was up 3%, partially offset by Turbomachinery & Process Solutions which was down 2%.

Baker Hughes’ GAAP operating income of $282 million for the quarter increased $204 million sequentially and increased $475 million year-over-year.

Adjusted operating income (a non-GAAP measure) of $377 million for the quarter was up 30% sequentially and up $207 million year-over-year driven by higher revenues and margin expansion in Oilfield Services, Oilfield Equipment and Digital Solutions, partially offset by Turbomachinery & Process Solutions.

Adjusted net income (non-GAAP) attributable to BHGE was $78 million compared to a loss of $7 million in the prior-year quarter.

The company’s orders for the quarter were $5.7 billion, down 5% sequentially and flat year-over-year.

This sequential decrease was driven by lower orders in Oilfield Equipment primarily driven by orders timing, partially offset with growth in Oilfield Services and Turbomachinery & Process Solutions. Equipment orders were down 11% and service orders were flat sequentially.

Year-over-year, orders in both Turbomachinery & Process Solutions and Oilfield Services grew. This was offset by lower Oilfield Equipment and Digital Solutions orders. Year-over-year equipment orders were down 8% and service orders were up 6%.

Lorenzo Simonelli, BHGE Chairman, President and Chief Executive Officer, said: “We are encouraged by the improved outlook for the macro environment. We expect both the North American and International markets to grow in 2019 as customers increase spending and overall rig and well counts grow.

“The offshore market is the strongest it has been in many years and the improving tender and order activity is an encouraging sign as we look out to 2019 and beyond. The LNG outlook is also improving, and we conservatively estimate a total of 65 million tons per annum of new capacity to be sanctioned by 2020. We remain well-positioned for the next build-cycle.”