Baker Hughes orders rise 28% as global oil demand soars By Bloomberg
© Reuters. Baker Hughes orders rise 28% as global oil demand climbs
(Bloomberg) — Request for hugue baker Co.’s power generation equipment soared 28% as the rebound in the global economy drives up crude consumption.
“We believe the broader macroeconomic recovery should translate into higher energy demand for 2022 and relatively tight oil and petroleum supplies,” chief executive Lorenzo Simonelli said in the earnings report on Thursday. fourth quarter of the Houston-based company. The world’s No. 2 oil contractor beat analysts’ expectations with orders of $6.7 billion in the fourth quarter, up from $5.2 billion a year earlier, the statement said.
Oil sector mercenaries are staging a comeback after the coronavirus pandemic triggered a historic blow to demand for crude. Baker Hughes (NYSE:), along with Schlumberger (NYSE:) and Halliburton (NYSE:) Co., have endured years of painful cost cuts and made efforts to move away from the booming shale play. But with the global economy rebounding, the world’s three largest oilfield repairers are expected to deliver strong results for the final three months of 2021.
“The economic recovery coupled with several years of oilfield underutilization has given rise to a new energy cycle,” wrote Charles Minervino, an analyst at Susquehanna International Group, in a note to investors last week. “Diversified service companies should emerge from 2021 on a high.”
Baker Hughes was the first of the Big Three oil service companies to report financial results for the last three months of the year on Thursday, posting sales of $5.5 billion that also beat analysts’ expectations. Fourth-quarter earnings, excluding certain items, were 25 cents a share, missing analysts’ estimates by 2 cents.
The latest batch of orders for Baker Hughes, which was led by its turbomachinery business, was more than $1 billion above analysts’ expectations, according to data compiled by Bloomberg.
Global oil drilling is soaring after rig counts fell to record lows at the end of 2020. Explorers around the world are expected to nearly triple the pace of spending increases this year compared to 2021, according to Evercore ISI. International regions are expected to be responsible for a record 81% of global explorer spending this year, Evercore analyst James West said by phone.
It’s a promising sign for the big three service companies, which now make most of their sales outside of the United States and Canada.
“Companies are all very well positioned heading into 2022,” Barclays Plc analyst J. David Anderson wrote in an email ahead of the earnings release. “The question is where the growth is first and fastest.”
Schlumberger, the world’s largest oil services provider, is expected to report results on Friday, and Halliburton, the leading fracking works provider, will release results Jan. 24.
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