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Investing.com — Shares in Baker Hughes Co. (NASDAQ:BKR) surged in early U.S. trading on Wednesday after the oil services company posted better than expected third quarter operating income, despite facing looming economic headwinds and steep restructuring expenses.
Adjusted earnings before interest, taxes, depreciation, and amortization for the three months ended on September 30 came in at $758M – a 16% rise compared to the previous quarter and 14% year-on-year. The consensus estimate compiled by FactSet had forecast the figure to increase to $705M.
The beat was driven by solid performance at its oilfield services and turbomachinery units, which saw orders tick up annually by 17% and 5%, respectively. Total group orders – a key measure of the future health of the company – jumped by 13% to $6.06B.
Revenue of $5.4B was also above the estimates of analysts at Goldman Sachs, thanks to a bump in demand for oilfield equipment.
But on a net basis, Texas-based Baker Hughes posted a loss of $17M, due in part to a $230M cost stemming from a decision to pare its corporate structure down to two divisions from four.
In a statement, Baker Hughes chairman and chief executive officer Lorenzo Simonelli noted that the firm has encountered “unique challenges” in 2022, but added that he believes many of these issues have been overcome ahead of next year.
“The macro outlook has grown increasingly uncertain as the global economy is dealing with strong inflationary pressures, a rising interest rate environment, and sizeable fluctuations in global currencies,” he said.
“Despite these economic challenges, we remain positive on the outlook for oil and gas. We believe the fundamentals remain supportive of a multi-year upturn in global upstream spending, and that elevated natural gas and [liquefied natural gas] pricing remains constructive for future [investment].”
