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<\/a><\/p>\nBy Liz Hampton and Arunima Kumar<\/p>\n
(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. <\/p>\n
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.<\/p>\n
“We remain optimistic on the outlook for energy services,” despite the oil price volatility, Baker Hughes CEO Lorenzo Simonelli said. <\/p>\n
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. <\/p>\n
Shares of Baker Hughes were up 2.5% in early trading at $30.30. They are roughly flat year-to-date. <\/p>\n
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. <\/p>\n
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. <\/p>\n
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.<\/p>\n
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. <\/p>\n
“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. <\/p>\n
Baker Hughes is the first major oilfield services firm to report. SLB, the sector’s largest, reports on Friday and Halliburton Co on Tuesday.<\/p>\n
(Reporting by Arunima Kumar in Bengaluru and Liz Hampton in Denver; Editing by Sriraj Kalluvila, Louise Heavens, Kirsten Donovan)<\/p>\n
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