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Baker Hughes Company reported a net income of $518 million for the third quarter, compared to a net loss of $17 million in the prior-year period, and up 26 percent compared to the previous quarter.
Revenue was measured at $6.64 billion for the quarter, up 24 percent compared to $5.3 billion in the same period a year ago. The company attributed the increase to higher volume in both the Industrial & Energy Technology (IET) and Oilfield Services & Equipment (OFSE) divisions.
The company’s adjusted EBITDA for the quarter ended September 30 was $983 million, up 30 percent compared to adjusted EBITDA of $758 million in the prior-year quarter. Baker Hughes’ adjusted EPS was $0.42 per share, which beat the Zacks Consensus Estimate of $0.39 per share.
Baker Hughes reported total orders from all business segments of $8.5 billion for the third quarter, up 40 percent year-over-year, and cash flows generated from operating activities were $811 million for the quarter, according to an earnings release Wednesday.
“We were pleased with our third quarter results and remain optimistic on the outlook”, Baker Hughes Chairman and CEO Lorenzo Simonelli said. “We maintained strong orders performance in both Industrial & Energy Technology (IET) and Oilfield Services & Equipment (OFSE), with large awards coming from Venture Global in Liquefied Natural Gas (LNG) and Var Energi in subsea. We also delivered strong operating results at the upper end of our EBITDA guidance range, booked almost $100 million of new energy orders, and generated $592 million of free cash flow. We continue to see positive momentum across our portfolio despite persisting global economic uncertainty”.
“Oil prices have rebounded as the combination of resilient oil demand and production cuts have tightened the market”, Simonelli observed. “As a result, the oil market is likely to see inventory draws through the rest of 2023. Continued discipline from the world’s largest producers, the pace of oil demand growth in the face of economic uncertainty, and geopolitical risk will be important factors to monitor as we look into 2024”.
Simonelli talked about the LNG project pipeline across the globe, saying that “the global LNG market remains fundamentally tight despite recent economic softness” outside of the upstream markets. “This tightness is evidenced by the recent LNG price spikes that resulted from the current Middle East conflict and strikes by LNG workers in Australia, which temporarily interrupted operations at several LNG facilities”, Simonelli noted.
“Globally, we expect 2023 LNG demand to approach 410 million tons per annum (mtpa), or up about 2% compared to last year. With [an] estimated global nameplate capacity of 490 mtpa this year, effective utilization is expected to be over 90 percent, which has historically represented a tight market. As a result, the LNG project pipeline remains strong, both in the U.S. and internationally”, Simonelli continued.
“As we enhance our position as a leading energy technology company, we remain excited about the continued growth that we see across both segments. While there is a growing consensus the energy transition will likely take longer and be more complex than many expected, our unique portfolio is set to benefit irrespective of the pace of development. Importantly, we are laying the foundation today for a more durable earnings and free cash flow growth profile, enabling best-in-class returns and structurally increasing shareholder returns. I want to thank our shareholders, our customers, and our employees for their continued support as we continue to take energy forward”, concluded Simonelli.
On Wednesday, Baker Hughes’ board approved a quarterly cash dividend of $0.20 per share of Class A common stock payable on November 17, to holders of record on November 6. Baker Hughes expects to fund its quarterly cash dividend from cash generated from operations, according to the release.
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