Page 6 - NorthAmOil Week 16 2021

NorthAmOil COMMENTARY NorthAmOil

Halliburton, Baker Hughes express

cautious optimism following first-

quarter results

Oilfield services firms Halliburton and Baker Hughes have reported their first-quarter

results this week, and comments from the companies’ executives illustrate a cautious
optimism that is tempered by short-term warnings

GLOBAL OILFIELD services firms Halliburton and Baker
Hughes have both expressed cautious optimism
WHAT: about the energy industry’s recovery as they
Halliburton and Baker reported their results for the first quarter of 2021
Hughes both beat analyst this week.
expectations with their Both companies’ results beat Wall Street
first-quarter results this expectations. Halliburton – the second larg-
week. est oilfield services firm after Schlumberger –
reported a net profit of $170mn, or $0.19 per
WHY: diluted share, for the first quarter, up from a
The companies’ net loss of $235mn, or $0.27 per share, in the
performances were fourth quarter of 2020 and a loss of $1bn in
bolstered by the the first quarter of last year. The result was also
beginnings of a recovery an improvement on adjusted net income of
from COVID-19. $160mn in the fourth quarter of 2020, excluding number of countries, energy demand has picked
impairments and other charges. up in recent months and there are hopes that
WHAT NEXT: Baker Hughes, for its part, reported a net loss mass vaccination will help to beat back the virus
Hopes for a recovery of $452mn for the first quarter of 2021, down this year.
have been tempered by from a profit of $653mn in the fourth quarter Increased drilling and completion activity
warnings that upstream of 2020 but up from a loss of $10.2bn in the first in North America contributed to the compa-
players will be slow to quarter of last year. nies’ results, especially for Halliburton, which
ramp up activity. Halliburton’s first-quarter earnings were is a leader in the provision of hydraulic frac-
higher than analysts’ estimates of $0.17 per turing services. Indeed, Halliburton said its
share, according to IBES data from Refinitiv North American revenue had increased 13% to
that was reported by Reuters. Halliburton’s $1.4bn in the first quarter, while Baker Hughes
first-quarter revenue of $3.45bn – up 6.6% on said its North American revenue had risen 1%
the fourth quarter of 2020 but down from $5bn to $625mn.
a year earlier – beat analyst expectations of Both Halliburton and Baker Hughes said they
$3.36bn, according to the Refinitiv data. saw signs of an ongoing recovery, but this was
And Baker Hughes’ earnings of $0.12 per tempered by some warnings about the pace of
share beat Wall Street expectations of $0.11 per that recovery.
share. “The first quarter marked an activity inflec-
tion for the international markets, while North
Slow recovery America continued to stage a healthy recov-
The year-on-year rebound in both companies’ ery,” Halliburton’s CEO, Jeff Miller, stated in his
earnings illustrates the recovery from the worst company’s earnings release. However, on Hall-
of the energy industry downturn. The coronavi- iburton’s earnings call, Miller said that oilfield
rus (COVID-19) was declared to be a pandemic services pricing still needed to recover, though
in March 2020 and led to lockdowns all over he added that the company was seeing “positive
the world that caused demand for oil and gas to signs of market rebalancing” that he expected to
crash. But although lockdowns are ongoing in a drive improvement.

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