Baker Hughes posted its first profit this year during the third quarter as drilling activity and oil prices continued to rebound from the pandemic-driven oil bust.
The Houston oilfield services giant on Wednesday said it made $8 million during the three months ended Sept. 30, compared with losses of $68 million during the second quarter, $452 million during the first quarter and $170 million during the same quarter a year earlier. Revenue inched up to nearly $5.1 billion from $5.05 billion a year earlier.
The company was last in the black in the fourth quarter of 2020, when it reported a profit of $653 million after slashing more than $700 million from its budget last year because of the coronavirus pandemic.
Baker Hughes CEO Lorenzo Simonelli said he expects demand for crude and oilfield services to grow in the coming years as the global economy recovers from the global pandemic and as fossil fuels supply tightens after years of dwindling oil industry investment.
“As we look ahead to the rest of 2021 and into 2022, we see continued signs of global economic recovery that should drive further demand growth for oil and natural gas,” Simonelli said. “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.”
Oilfield services giants such as Halliburton, Schlumberger and Baker Hughes are benefiting from an upswing in drilling and well-completion in North America as business activity and especially travel — which still depends largely on petroleum derivatives — pick up. Crude prices have climbed steadily this year, recently topping $80 a barrel, up from less than $48 a barrel in January. U.S. benchmark West Texas Intermediate settled at just under $83 a barrel Tuesday afternoon.
Drillers, meanwhile, have added 261 rigs over the past year, bringing the U.S. rig count to 543, according to oilfield services company Baker Hughes. Employment in the oilfield services and equipment sector has increased for seven-straight months, recovering nearly 44,000 of the 109,000 jobs lost last year during the pandemic, according to data from the Bureau of Labor Statistics and analyzed by Houston trade group Energy Workforce & Technology Council.
Baker Hughes said customers orders were up 6 percent from the second quarter and 5 percent from the third quarter last year. Equipment orders during the third quarter were down 7 percent while service orders were up 18 percent compared to the same quarter last year.
The company during the third quarter inked several contracts globally, including in Australia, Brazil, China and Guyana. Baker Hughes’ oilfield services business was hampered by Hurricane Ida, cost inflation in its chemicals business and delivery issues stemming from supply chain disruptions.
Baker Hughes said it expects continued revenue growth both in North America and internationally during the fourth quarter, and double digit growth in 2022. Simonelli added that he expects the company to ink equipment contracts for hydrogen and carbon capture clients next year.
Baker Hughes authorized $2 billion in stock buybacks during the third quarter, reflecting the company’s optimistic view of the future and its stronger balance sheet. The company repurchased 4.4 million shares for $106 million during the third quarter.
Baker Hughes shares rose 1 cent to $26.87 in early Wednesday trading.
This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more from the Houston Chronicle click here.
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