Third loss in a row for Baker Hughes
Oilfield services major Baker Hughes has booked $170 million loss in the third quarter of 2020, against $57 million profit same time last year.
The bottom line took a hit due to revenue drop, asset impairments, restructuring and separation related charges.
This was also the company’s third straight loss.
Revenue for the quarter was approximately $5 billion, down 14 per cent from Q3 2019.
This was due to lower volume across the Oilfield Services and Digital Solutions segments.
Sequentially, revenue vas up some 7 per cent.
Operating loss for the third quarter of 2020 was $49 million. Operating loss decreased $3 million sequentially and increased $346 million year-over-year. Total segment operating income was $349 million for Q3 2020, down 34 per cent year-over-year.
Adjusted operating income for the third quarter was up 124 per cent sequentially. However, adjusted operating income was down 45 per cent year-over-year driven by lower margins in the Oilfield Services, and Digital Solutions segments, partially offset by volume in Turbomachinery & Process Solutions, and margin expansion in Oilfield Equipment.
Baker Hughes recognised adjustments totaling $283 million before tax, mainly related to asset impairments, restructuring and separation related charges.
Depreciation and amortization for the third quarter of 2020 was $315 million.
Corporate costs were $115 million in the third quarter of 2020, down 2% sequentially and up 5% year-over-year.
Orders for the quarter were $5.1 billion, up 4 per cent sequentially and down 34 per cent year-over-year.
Year-over-year, the decline in orders was a result of lower order intake across all segments. Year-over-year equipment orders were down 40 per cent and service orders were down 28 per cent.
Lorenzo Simonelli, BH chairman and CEO, said:
“Despite the uncertain macro environment, we are executing on the framework we laid out earlier this year. We are on track to hit our goals of right-sizing the business, generating free cash flow, and achieving $700 million in annualized cost savings by year end.
“As we move forward, we are intensely focused on improving the margin and return profile of Baker Hughes despite the near-term macro volatility, while at the same time executing on our long-term strategy to evolve our portfolio along with the energy landscape. Baker Hughes remains committed to leading the energy transition and becoming a key enabler to decarbonizing oil and gas and other industries.”