Baker Hughes on Sunday reported an 11% rise in adjusted profit for the fourth quarter as demand for its gas technology equipment and services more than offset weakness in its oilfield services and equipment business.
The company has banked on demand for equipment and services, such as gas turbines and compressors, it provides to liquefied natural gas (LNG) companies in recent quarters as weak oil prices have hurt drilling and completions activity in oil basins.
Revenue from the company's industrial and energy technology business, which houses gas technology and services and contributes just over half its revenue, rose 9% to $3.8 billion.
Revenue from its oilfield services and equipment business, meanwhile, fell 8% to $3.6 billion, the company said, adding that cost savings helped boost margins.
The Houston-headquartered company forecast mid-single-digit growth in its adjusted earnings before interest, tax, depreciation and amortization, with margins in its industrial and technology business expanding to its 20% target and oilfield service and equipment business margins remaining relatively flat.
Baker Hughes added that it expects industrial and energy business orders to remain at robust levels, thanks to continued momentum in LNG development, strong demand for floating, production, storage and offloading units and gas infrastructure, as well as for power systems.
Adjusted net income attributable to Baker Hughes was $772 million, or 78 cents per share, in the three months ended December 31, up from $694 million, or 70 cents per share, a year earlier.
The company took a $215 million restructuring charge, among others in the quarter.
(Reuters - Reporting by Arathy Somasekhar in Houston; Editing by David Gregorio and Diane Craft)