By Liz Hampton and Rithika Krishna
(Reuters) -U.S. oilfield services and equipment firm Baker Hughes Co on Wednesday reported a higher quarterly profit from a year earlier, but missed Wall Street estimates after facing a “volatile market” in early 2022 that prompted mixed results across its reporting units.
Oil benchmarks have undergone their most erratic period since mid-2020 with global crude prices up 38% in the first quarter after Russia’s invasion of Ukraine in late February stoked global energy supply concerns.
The invasion has driven higher demand for liquefied natural gas, a market for which Baker Hughes supplies equipment, and other energy sources. However, it also comes as the industry is grappling with supply chain issues and labor shortages
Shares of Baker Hughes were down 2.56% in pre-market trading to $35.60, while Brent oil futures were up about 1.4%.
Baker Hughes said its results reflected a “very volatile market environment during the first few months of 2022.” While orders in its Turbomachinery and Process Solutions business doubled from a year ago to $3 billion, it also faced pressures from global supply chain issues and geopolitical events, said Lorenzo Simonelli, the chief executive officer of Baker Hughes.
EBITDA margins in its oilfield services and oilfield equipment units both declined sequentially, while margins in its equipment segment were also down 2.2 basis points year-over-year.
“Baker Hughes opened 2022 with continued strong order intake but some slippage on profit margins. Profitability improvements seen in recent quarters took a step back in Q1 as seasonality and supply chain challenges weighed on the reported results,” said Peter McNally, vice president for the industrial materials and energy group at Third Bridge.
Adjusted net income rose to $145 million, or 15 cents per share, in the three months ended March 31, up from $91 million, or 12 cents per share. Wall Street analysts had anticipated earnings of 20 cents per share, according to Refinitiv IBES.
(Reporting by Rithika Krishna in Bengaluru; Editing by Shailesh Kuber and Chizu Nomiyama)
