Baker Hughes Q4 Profit Down, Misses Estimates; Orders Climb

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Oilfield services provider Baker Hughes Co. reported Monday weak profit in its fourth quarter, below market estimates, despite higher revenues driven by strong volume in both segments. Orders climbed significantly, and the company said it maintains a positive outlook for the energy sector in fiscal 2023.

In pre-market activity on Nasdaq, Baker Hughes shares were gaining around 2 percent.

Lorenzo Simonelli, Baker Hughes chairman and chief executive officer, said, "In 2023, the global economy is expected to experience some challenges under the weight of inflationary pressures and tightening monetary conditions. Despite recessionary pressures in some of the world's largest economies, we maintain a positive outlook for the energy sector, given supply shortages appear likely to persist."

The company said it will continue to focus on various initiatives and generate strong free cash flow and return 60 percent to 80 percent of this free cash flow to shareholders through a combination of dividends and opportunistic share buybacks.

In the fourth quarter, net income attributable to Baker Hughes fell 38 percent to $182 million from $294 million in last year's fourth quarter. Earnings per share were $0.18, down 44 percent from $0.33 a year ago.

Adjusted earnings were $381 million or $0.38 per share for the period, compared to prior year's $224 million or $0.25 per share.

On average, 19 analysts had expected the company to earn $0.40 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Sequentially, earnings improved from a loss of $17 million or $0.02 per share recorded in the third quarter.

Operating income for the fourth quarter of $663 million was up 15 percent year-over-year. Adjusted operating income of $692 million grew 21 percent from last year.

Adjusted EBITDA was $947 million for the quarter, up 12 percent year-over-year and up 25 percent sequentially.

The company's revenue for the quarter rose 7.7 percent to $5.91 billion from $5.49 billion last year, driven by higher volume in both segments. Analysts estimated revenues of $6.06 billion for the quarter.

Oilfield Services & Equipment revenues of $3.58 billion grew 12 percent from last year, and Industrial & Energy Technology revenues edged up 1 percent to $2.33 billion.

Orders for the quarter were $8.01 billion, up 20 percent from $6.66 billion last year.

Sequentially, revenue went up 10 percent and orders climbed 32 percent.

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