Oilfield firm Baker Hughes Co reported a quarterly profit that fell short of Wall Street expectations on Wednesday, sending its shares down sharply in pre-market trading.
Oil producers and service firms are expected to be supported by a rebound in oil prices to pre-pandemic levels as demand recovers and the Organization of the Petroleum Exporting Countries, Russia and their allies stick to their output increase schedule instead of accelerating production.
Crude prices climbed 4.5% in the quarter ended Sept. 30. and are currently trading just above $84 a barrel.
Baker Hughes reported adjusted net income of $141 million, or 16 cents per share, for the third quarter, missing forecasts for earnings of 21 cents per share, according to Refinitiv IBES data. Revenues of $5.093 billion also fell short of expectations of $5.321 billion.
Shares were down 2.53% in pre-market trading at $26.19 each. They are up about 29% year-to-date, lagging gains in global oil prices, which have risen about 62%.
"As we look ahead to the rest of 2021 and into 2022, we see continued signs of global economic recovery that should drive further demand growth for oil and natural gas," Baker Hughes Chief Executive Officer Lorenzo Simonelli said.
Its oilfield services unit was negatively impacted by Hurricane Ida, as well as cost inflation in its chemicals business and the global supply chain issues, Simonelli said in a release.
Net income attributable to the company was $8 million, marking Baker Hughes' first quarterly profit since the fourth quarter of 2020.
Higher prices have encouraged U.S. producers to ramp up drilling activity, with the country's rig count rising to 521 at the end of the third quarter, compared with 470 at the close of the June quarter, according to Baker Hughes data.
(Reporting by Arunima Kumar in Bengaluru and Liz Hampton in Denver; Editing by Vinay Dwivedi, Kirsten Donovan)