Baker Hughes, a GE company, announced results for Q3 2017.
- Orders of US$5.7 billion for the quarter, up 2% sequentially and 18% year-over-year on a combined business basis.
- Revenue of US$5.4 billion for the quarter, down 1% sequentially and flat year-over-year on a combined business basis.
- GAAP operating loss was US$122 million for the quarter decreased 17% sequentially and decreased 22% year-over-year on a combined business basis.
- Adjusted operating income (a non-GAAP measure) was US$240 million for the quarter, up 105% sequentially and down 13% year-over-year on a combined business basis.
- GAAP net loss per share of US$(0.24) for the quarter which included US$0.29 per share of adjusting items.
- Basic loss per share were US$(0.24) for the quarter, adjusted basic earnings per share (a non-GAAP measure) were US$0.05.
- Cash flows used in operating activities were US$(195) million for the quarter. Free cash flow (a non-GAAP measure) for the quarter was US$(405) million.
“The combination of GE Oil & Gas and Baker Hughes closed on 3 July, and we are pleased with our progress during our first operating quarter. Despite the continuing challenging environment, we delivered solid orders growth and secured important wins from customers, advanced existing projects and enhanced our technology offerings in the quarter. We also achieved key integration milestones and made significant progress working as a combined company. I am now more convinced than ever that we combined the right companies at the right time,” said Lorenzo Simonelli, BHGE chairman and chief executive officer.
“In our Oilfield Services segment, we continue to see growth driven by our well construction business in North America. While the North America rig count is up more than 40% year-to-date, we saw a deceleration in the quarter with the US Land rig count up 6% versus the end of the second quarter. International activity remains muted with rig count flat year-to-date.
“In our Oilfield Equipment segment, the subsea market continues to be challenging. Activity remains low and price continues to be pressured. We expect tree awards in 2017 to be up versus 2016, but still significantly below peak levels seen in 2013. We continue to expect the subsea market to be very challenged in the short term with little sign of any significant recovery in 2018.
“In our Turbomachinery & Process Solutions segment, the LNG market continues to be over-supplied in the near term with gas prices pressured in most markets. The long-term value proposition for LNG remains positive and we have an industry-leading portfolio in the segment with strong manufacturing and service capabilities. Downstream markets continue to evolve. In refining, large, complex refineries should gain an advantage in a more competitive, oversupplied landscape. However, costs and refining margins continue to delay some projects. In petrochemicals, we see healthy end-market demand. Cost advantaged supply bases continue to drive projects forward, particularly in North America and the Middle East.
“In our Digital Solutions segment, we see end markets for our measurement and controls-based portfolio slowly returning to growth. Aviation and industrial markets continue to be robust but are partially offset by declines in the power market. Oil and gas end markets are beginning to stabilize, and we expect them to return to growth over the medium term. Our Digital offerings in software and digital services continue to gain traction in the marketplace.
“We expect the overall oil and gas environment to remain challenging for the rest of the year. We have seen some improvement in activity but we have not seen meaningful increases in customer capital commitments. Oil prices remain volatile and, as a result, our customers remain cautious. We continue to support our customers through innovative solutions and solid execution and are focused on integrating and driving the best of both legacy businesses,” Simonelli said.
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