Another disappointment to jolt the oil-services sector: Baker Hughes Co. reported a third-quarter earnings stumble that included pain from Hurricane Ida and a warning of hampered growth for oil demand.
The world’s No. 2 oilfield services and equipment provider said Wednesday that its oil-services unit was hurt by supply chain snarls, cost inflation in its chemicals business and the U.S. Gulf of Mexico storm that ripped through Louisiana’s Port Fourchon two months ago. Baker Hughes posted earnings, excluding certain items, of 16 cents a share, missing the 21-cent average of analysts’ estimates for the third quarter. Its results come after Halliburton Co. reported earnings that merely met expectations, also citing struggles due to Ida.
“As we look ahead to the rest of 2021 and into 2022 showing how the hired hands of the oil patch are struggling with record costs, we see continued signs of global economic recovery that should drive further demand growth for oil and natural gas,” Baker Hughes Chief Executive Officer Lorenzo Simonelli said in a statement. “However, the pace of growth is being hampered by the COVID-19 Delta variant, global chip shortages, supply chain issues, and energy supply constraints.”
Baker Hughes was the second-worst performer in the S&P 500 on Wednesday after falling 4% at 10:14 a.m. in New York.
The company echoed comments from its smaller rival Halliburton earlier in the week, saying oilfield logistics are improving as more airlines return to the skies.
“We saw a lot of capacity constraint, particularly in air as commercial aviation is well below pre-pandemic levels,” Simonelli told analysts and investors Wednesday on a conference call. “We don’t have as much room in the belly of planes with fewer flights, so as the U.S. opens up and more countries open up here, we’re starting to see that creep back up.”
The oil market will get a more detailed look at international activity later this week when Schlumberger, the world’s biggest oilfield contractor, reports financial results on Friday.
