Page 8 - NorthAmOil Week 16 2022

NorthAmOil PERFORMANCE NorthAmOil

Halliburton posts higher-than-expected profit

GLOBAL OILFIELD services giant Halliburton has its forecast for customer spending in North
reported an 85% year-on-year increase in America, projecting growth of 35% this year
adjusted net income for the first quarter of as a result of expanded activity and inflation.
2022. The firm posted adjusted net income of Previously, the company had anticipated a 25%
$314mn, or $0.35 per diluted share. This nar- increase.
rowly exceeded analyst expectations of $0.34 per “We see significant tightness across the entire
share, according to Refinitiv IBES. oil and gas value chain in North America. Sup-
The company said on April 19 that its net portive commodity prices and strengthening
income for the first quarter reached $263mn, customer demand against an almost sold-out
or $0.29 per diluted share, up from $170mn, or equipment market are expected to drive expan-
$0.19 per diluted share, in the same quarter of sion in Completion and Production division
2021. Its total revenue for the first quarter of 2022 margins,” Miller added.
came in at $4.3bn, up from $3.5bn a year ago. The Houston-headquartered company also
Halliburton’s operating income was $511mn, saw margins in its Drilling and Evaluation divi-
compared with $370mn in the same quarter last sion surpass 15% in the first quarter, reaching its
year. Excluding impairments and other charges, highest level since 2010.
the company’s adjusted operating income However, Halliburton warned that supply
totalled $533mn in the latest quarter. chain issues, which have affected the indus-
“Our performance demonstrated the resil- try as it rebounds from the initial waves of the
ience of our unique strategy in action and the coronavirus (COVID-19) pandemic, would
importance of our competitive positioning both continue. The company “can’t and won’t sub-
in North America and international markets,” sidise operators” under these circumstances,
stated Halliburton’s chairman, president and Miller said on Halliburton’s earnings call, add-
CEO, Jeff Miller. ing that it had “been very transparent in terms
The results come as rising oil and gas prices of the cost of acquiring things, and the timing
boost customer demand. Halliburton has raised to acquire things”.™

Baker Hughes posts higher profit but

falls short of analyst expectations

GLOBAL OILFIELD services company Baker Hughes has upcoming net-zero hydrogen energy complex
posted adjusted net income of $145mn, or $0.15 in Alberta. This is part of the two companies’
per share, for the first quarter of 2022. The fig- hydrogen collaboration framework and will see
ures represent an increase from $91mn, or $0.12 TPS supply NovaLT16 turbines, which operate
per share, in the same quarter of 2021. However, on 100% hydrogen.
according to Refinitiv IBES, this fell short of ana- Another highlight from the quarter for
lyst expectations of $0.20 per share. the firm was the signing of a “major” contract
Baker Hughes’ revenue for the latest quarter with Venture Global LNG for the first phase
totalled $4.8bn, down 12% sequentially, but up of the Plaquemines LNG project in Louisi-
1% year on year. Its operating income of $279mn ana. Baker Hughes will supply an LNG sys-
for the first quarter marked a drop of 51% tem and 24 modularised compression trains
sequentially, but an increase of 70% y/y. Cash for that project, in addition to field services.
flow generated from operating activities came in The contract is part of the two companies’
at $72mn for the latest quarter, while free cash master equipment supply agreement to pro-
flow amounted to $105mn. vide 70mn tonnes per year (tpy) of LNG
Citing a volatile market environment, the production capacity. It builds on a previous
company said it had experienced stronger orders contract for Plaquemines LNG awarded to
that were offset by weaker profit margins on Baker Hughes.
sales. Orders totalled $6.8bn for the quarter, up Supply chain issues and geopolitical events
3% sequentially and 51% y/y. continue to put pressure on margins, however.
In particular, the firm reported strong sales in Amid the war in Ukraine, Baker Hughes antic-
its Turbomachinery and Process Solutions (TPS) ipates weaker revenues from its Russia-related
business, which saw orders double from a year business this year, particularly in oilfield ser-
ago to $3bn. vices. About 4% of its total company revenues in
One of these was an order for advanced gas the first quarter were accrued from its activities
turbine generator equipment for Air Products’ in Russia.™

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