Halliburton, Baker Hughes beat on profit estimates, shares fall on outlook

By Arathy Somasekhar and Sourasis Bose

(Reuters) -Halliburton Co and Baker Hughes on Wednesday reported results that beat analysts’ estimates for second-quarter profit, but shares fell on new signs of weakness in U.S. shale activity.

Oilfield services this year have been underpinned by a resurgence in offshore and activity in the Middle-East and Latin America since Russia’s invasion of Ukraine. But weaker oil and gas prices have made U.S. shale producers sharply cut the number of active rigs.

Halliburton (NYSE:) shares were down 2.2% in premarket trading at $37.25, while Baker Hughes’ shares were down 1.5% at $34.51 as investors weighed the outlook for further weakness in North American activity.

Halliburton, the top U.S. fracking service provider, said revenue from North America fell sequentially 2% to $2.7 billion and international operations climbed 7% to $3.1 billion from first quarter.

Baker Hughes forecast largely flat revenue, between $3.8 billion and $4 billion, in the third quarter from its oilfield service and equipment business. It cited a decline in North American activity and growth in international markets.

“Growing economic uncertainty continues to drive commodity price volatility globally… Market softness in North America is expected to be more than offset by strength in international and offshore markets,” Baker Hughes Chief Executive Lorenzo Simonelli said.

Spending by producers is expected to be more durable and less sensitive to commodity price swings relative to prior oil and gas cycles thanks to strong balance sheets and capital discipline, he added.

Baker Hughes, a major equipment supplier to liquefied export projects, raised its order expectations in its industrial & energy technology segment, which includes its LNG business, by $1 billion to about $12 billion for the year.

That helped the company raise the lower end of its full year revenue guidance to between $24.8 billion and $26 billion, largely in line with analysts’ estimate of $25.3 billion.

The company topped estimates by 6 cents per share at 39 cents, while Halliburton beat analysts’ estimate by 2 cents at 77 cents per share for the three months ended June 30, according to Refinitiv data.

Baker Hughes’ revenue of $6.32 billion beat consensus estimates of $6.27 billion, while Halliburton’s revenue of $5.8 billion came in slightly below expectations of $5.86 billion.