October 20, 2017 / 11:05 AM / a year ago

Baker Hughes posts big profit miss, sees challenging year

(Reuters) - Baker Hughes’ (BHGE.N) warned on Friday that the rest of the year would be challenging after it reported a quarterly profit that missed estimates by a wide margin as the oilfield services company negotiates volatile oil prices.

FILE PHOTO: Idle oil equipment is seen in a Baker Hughes yard in Williston, North Dakota April 30, 2016. Picture taken April 30, 2016. REUTERS/Andrew Cullen

Larger rival Schlumberger Ltd (SLB.N) also warned on Friday that oil and gas companies’ investments in North America were moderating.

“Oil prices remain volatile and, as a result, our customers remain cautious,” Lorenzo Simonelli, chief executive of Baker Hughes, the world’s No. 2 oilfield services firm, said.

A week back, Baker Hughes said U.S. oil rig count, an early indicator of future output, had been falling for the past two months amid a perception of lower-for-longer oil prices. [RIG/U]

Brent crude LCOc1 prices are currently $56.97 per barrel, while U.S. crude CLc1 prices are $50.95.

But, nearly two-thirds of U.S. energy firm’s executives expect crude prices to stay below $60 per barrel through 2018 and not hit $70 at least until the next decade.

Baker Hughes reported a third-quarter loss of $104 million, or 24 cents per share. It did not give a comparable year-ago number in its first report to include GE Co’s (GE.N) oil and gas business.

Excluding items, the company earned 5 cents per share, far lower than analysts average estimate of 11 cents, according to Thomson Reuters I/B/E/S.

Including GE’s energy business, Baker Hughes’ revenue was flat at $5.38 billion, the company said.

Revenue from oilfield services, its biggest business, rose 7.6 percent to $2.63 billion in the three months ended Sept. 30.

Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza

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