Baker Hughes tops profit estimates despite war disruption

Oilfield services provider Baker Hughes beat Wall Street estimates for first-quarter profit, as strong demand in its industrial and energy technology (IET) unit offset drilling weakness caused by conflict in the Middle East.

A surge in electricity demand from data centres, along with investments in liquefied natural gas (LNG), gas infrastructure and grid equipment, lifted orders in the IET unit.

First-quarter IET orders rose to $4.89 billion from $3.18 billion a year earlier.

However, disruptions in the Middle East weighed on oilfield services activity.

Its oilfield services and equipment (OFSE) division was under pressure, with revenue falling 7 percent year on year to $3.24 billion, primarily due to the disposition of its surface pressure control business and regional disruptions.

Revenue from the Middle East/Asia region dropped 19 percent to $1.15 billion.

Baker Hughes and its peers have yet to benefit meaningfully from higher oil prices following attacks on infrastructure in the Middle East and Iran’s effective closure of the Strait of Hormuz, as producers remain cautious about increasing drilling.

Earlier this week, peer Halliburton warned disruptions linked to the Iran conflict and the Strait of Hormuz closure could cut current-quarter earnings by about 7 cents to 9 cents per share, even after beating first-quarter estimates.

• Worldwide oil inventories could sink to record lows
• Algeria and Libya see gains from Iran conflict but time is of essence 
• Energy crisis ‘tip of iceberg’ unless Hormuz reopens

Larger rival SLB, set to report on Friday, has also flagged a potential 6-9 cent hit, citing operational disruptions in the region.

Baker Hughes posted an adjusted profit of 58 cents per share for the three months ended March 31, compared with analysts’ estimates of 49 cents per share, according to data compiled by LSEG.

Revenue came in at $6.59 billion, also above expectations of $6.35 billion.