Oilfield services provider Baker Hughes surpassed Wall Street expectations for second-quarter profit on Tuesday, helped by robust demand for its natural gas services even as it warned of a drop in spending by oil producers.
Baker Hughes joined its US rivals Halliburton and SLB in warning of a slowdown in upstream activity and spending, as producers grapple with weakness and volatility in commodity prices.
In North America, upstream spending is expected to be down in the low-double digits, Baker Hughes said on Tuesday, while international spending could be down in the high-single digits.
However, the Big 3 oilfield services firms are concentrating on pockets of resilience such as LNG infrastructure, power grid upgrades and data center-driven power demand to weather a slower, more uneven recovery.
The energy industry is benefiting from an increase in demand for natgas, driven primarily by LNG exports and rising electricity consumption as a result of hotter temperatures, data centers and AI operations.
Baker Hughes has been trying to leverage its industrial and energy technology (IET) portfolio to drive growth and expand its presence in the natural gas and LNG sectors.
With demand from data centers rapidly accelerating, Baker Hughes said it is well-positioned to “meet or exceed” its three-year target to book $1.5 billion of orders in data center equipment earlier than anticipated.
Shares of the company rose over 2 per cent after the bell.
Orders in Baker Hughes’ gas technology services business jumped 28 per cent during the quarter, lifting revenue in the IET segment to $3.29 billion.
However, total revenue fell 3 per cent to $6.91 billion from last year as a slowdown in drilling activity across key markets weighed on demand for its oilfield equipment and technology.
The Houston-based company posted an adjusted per-share profit of 63 cents for the three months ended June 30, compared with analysts’ estimates of 56 cents apiece, according to data compiled by LSEG.
