October 20, 2017 / 11:04 AM / 4 months 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.

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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