Third loss in a row for Baker Hughes

Oilfield services major Baker Hughes has booked $170 million loss in the third quarter of 2020, against $57 million profit same time last year.

The bottom line took a hit due to revenue drop, asset impairments, restructuring and separation related charges.

This was also the company’s third straight loss.

Revenue for the quarter was approximately $5 billion, down 14 per cent from Q3 2019.

This was due to lower volume across the Oilfield Services and Digital Solutions segments.

Sequentially, revenue vas up some 7 per cent.

Operating loss for the third quarter of 2020 was $49 million. Operating loss decreased $3 million sequentially and increased $346 million year-over-year. Total segment operating income was $349 million for Q3 2020, down 34 per cent year-over-year.

Adjusted operating income for the third quarter was up 124 per cent sequentially. However, adjusted operating income was down 45 per cent year-over-year driven by lower margins in the Oilfield Services, and Digital Solutions segments, partially offset by volume in Turbomachinery & Process Solutions, and margin expansion in Oilfield Equipment.

Baker Hughes recognised adjustments totaling $283 million before tax, mainly related to asset impairments, restructuring and separation related charges.

Depreciation and amortization for the third quarter of 2020 was $315 million.

Corporate costs were $115 million in Q3 2020, down 2 per cent sequentially and up 5 per cent year-over-year.

Orders for the quarter were $5.1 billion, up 4 per cent sequentially and down 34 per cent year-over-year.

Year-over-year, the decline in orders was a result of lower order intake across all segments. Year-over-year equipment orders were down 40 per cent and service orders were down 28 per cent.

“Despite the uncertain macro environment, we are executing on the framework we laid out earlier this year. We are on track to hit our goals of right-sizing the business, generating free cash flow, and achieving $700 million in annualized cost savings by year end.

“As we move forward, we are intensely focused on improving the margin and return profile of Baker Hughes despite the near-term macro volatility, while at the same time executing on our long-term strategy to evolve our portfolio along with the energy landscape. Baker Hughes remains committed to leading the energy transition and becoming a key enabler to decarbonizing oil and gas and other industries.”