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Energy services company Baker Hughes, a GE Co. reported second quarter earnings on Friday before the market opened. $BHGE showed a slight miss on weaker revenue but gave a robust outlook on the macro oil structure. Parent General Electric $GE also reported earnings this morning.


bakerhughes ge

Earnings:

Adjusted earnings of 13 cents per share, missing estimates by 1 cent, according to Thomson Reuters I/B/E/S. Overall revenue rose 2.4 percent to $5.55 billion, slightly below expectations of $5.57 billion.

Baker Hughes A GE Co NYSE: $BHGE

Market Reaction > $32.00 +0.22 (+0.69%) July 20, 2018

Highlights

  • Revenue from its oilfield equipment business (includes deepwater drilling) fell 9.4 percent to $617 million missing analysts' estimate of $648.2 million.
  • Revenue from its oilfield services business, which accounts for more than one-half of overall sales, gained 14 percent year over year to approximately $2.9 billion, driven by stronger activity in North America.
  • Orders of $6.0 billion for the quarter, up 15% sequentially and up 9% year-over-year on a combined business basis* Cash flows generated from operating activities were $139 million for the quarter.
  • Free cash flow (a non-GAAP measure) for the quarter was $(22) million. Included in free cash flow is a cash usage of $110 million relating to restructuring and merger-related payments.

Competitor Schlumberger also reported today and announced similar activity in North America, the EIA announced this week that U.S. oil production hit an all time high of 11 million bpd.

Outlook

Baker Hughes expects longer-cycle projects to drive growth in its oilfield equipment and turbomachinery businesses in the second half of 2018 and 2019. The company forecast that demand in LNG markets would double to about 500 million tons per year by 2030.

"North American production is increasing as operators grow rig and well counts, and we are seeing signs of increasing international activity in some geomarkets," Chief Executive Officer Lorenzo Simonelli said.

via: RonH tableau public

General Electric Demerger

On June 26, $GE announced it will divest its 62.5 percent stake in Baker Hughes in the next two or three years in a bid to simplify its structure and boost shareholder returns. GE acquired the Baker Hughes in July 2017, creating the second largest oilfield services provider by revenue.

Baker Hughes today announced will keep technology, capabilities and infrastructure obtained through the merger despite its breakup with GE.

"There are agreements in place to ensure there is a seamless separation. We'll work with GE as they evaluate the timing and structure," Simonelli said..

Source: BHGE

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