Breaking News
0

GE's Baker Hughes beats estimates on international demand, LNG drilling

Stock MarketsJul 31, 2019 12:18PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Nishara Karuvalli Pathikkal

(Reuters) - General Electric (NYSE:GE) Co's oilfield services arm, Baker Hughes, beat quarterly profit estimates on Wednesday, driven by higher LNG drilling and demand for its oilfield services in international markets, sending its shares up nearly 6%.

Revenue in the oilfield services segment, which constitutes a majority of the company's operations, rose 14% to $3.26 billion in the second quarter, led by growth in the Middle East, North Sea and Europe.

Last week, bigger rivals Schlumberger NV (NYSE:SLB) and Halliburton (NYSE:HAL) Co also posted higher quarterly revenue from regions outside North America, benefiting from an uptick in demand from international markets that helped make up for lower sales to U.S. producers reluctant to spend.

On a post-earnings call with analysts, Chief Financial Officer Brian Worell said the company's outlook for 2019 was unchanged as a substantial number of equipment orders being booked in its turbomachinery and process solutions (TPS) business do not start taking revenue until the second half of 2019.

Orders in the TPS business surged 34% in the second quarter on increasing activity in the market for liquefied natural gas projects.

According to projections by the International Energy Agency, with global LNG demand expected to grow about 4% a year through 2024, developers could make final investment decisions (FID) later this year to add more export capacity.

On the call, Chief Executive Officer Lorenzo Simonelli brushed off concerns that issues around global economic growth and tariffs could slow FIDs over the next year.

"As you look at demand, Chinese LNG ports continue to grow. You got South Korea continuing to grow, India continue to grow," he said.

In a note titled "whether you prefer Timex or Rolex, BHGE reliability becoming like clockwork", analysts at Tudor, Pickering, Holt & Co called the Baker Hughes results "mighty fine" and said the quarter checks all the requisite boxes.

The company said it generated $355 million of free cash flow in the quarter, a reversal from the surprise outflow posted in the first quarter that sent shares tumbling 8.5%.

The company's shares were up 5.6% at $25.89 after Wednesday's call.

The company's adjusted net income more than doubled to $104 million, or 20 cents per share, in the second quarter, beating analysts' estimate by a cent.

Total revenue rose 8% to $5.99 billion, beating estimates of $5.81 billion.

GE's Baker Hughes beats estimates on international demand, LNG drilling
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email