© Reuters. FILE PHOTO: The logo of Baker Hughes (BKR) is seen in this image provided July 21, 2020. Baker Hughes/Handout via REUTERS
By Liz Hampton and Arunima Kumar
(Reuters) -Baker Hughes Co on Wednesday said it beat first-quarter profit estimates as rising oil prices boosted demand for its equipment and services, sending the oilfield firm’s shares higher.
Oil markets have been choppy, falling last month on concerns of a banking crisis and economic jitters before rebounding on a surprise production cut by OPEC+ members and strong demand in China.
“We remain optimistic on the outlook for energy services,” despite the oil price volatility, Baker Hughes CEO Lorenzo Simonelli said.
Spending on oil and gas is becoming “less sensitive to commodity price swings,” he added, pointing to factors such as the development of liquefied natural gas (LNG) projects.
Shares of Baker Hughes were up 2.5% in early trading at $30.30. They are roughly flat year-to-date.
Recent declines in global LNG prices are a “net positive” for the sector, supporting demand, Simonelli said. He anticipates between 65 million and 115 million tonnes per annum of future output to be approved in 2023.
Meanwhile, Baker Hughes has lowered its view of spending growth in North America drilling and completions for the year to low double digits from mid- to high double digits earlier.
Overall, the company is anticipating double-digit spending growth by upstream oil and gas companies this year, and full-year revenue of between $24 billion and $26 billion, up from $21.2 billion in 2022.
Adjusted profit was $289 million, or 28 cents per share, for the quarter ended March 31, topping Wall Street’s 26 cents per share estimate, but down from 38 cents in the prior quarter.
“Positive update as Q1 beats, Q2 sets up well vs. expectations, and order momentum continues,” wrote analysts for investment firm Tudor, Pickering, Holt & Co in a note.
Baker Hughes is the first major oilfield services firm to report. SLB, the sector’s largest, reports on Friday and Halliburton (NYSE:HAL) Co on Tuesday.