Houston-based Baker Hughes on Wednesday became the third oil-field service company to post a massive loss in the first quarter after writing down the value of assets as oil markets collapse.
The company cut the value of assets by more than $16 billion, resulting in a $10.2 billion first quarter loss compared with a $20.9 million profit a year earlier. Revenue, meanwhile, remained nearly steady at $5.4 billion during the first three months of the year, compared with $5.6 billion during the same period a year earlier.
The loss is equivalent to $15.69 per share compared with a 5 cent-per-share profit in 2019’s first quarter.
Baker Hughes’ oil-field services and oil-field equipment segments slashed the value of assets by $14.8 billion in the first quarter. The remaining write downs came in the company’s other divisions.
“During the first quarter, the macro environment changed rapidly,” Baker Hughes CEO Lorenzo Simonelli said. “The sudden demand shock from COVID-19 combined with rising global oil supply drove a 67 percent decline in oil prices during the first quarter. Looking forward, the outlook for oil and gas demand and supply appears equally uncertain, and it will largely be driven by the pace of economic recovery from the COVID-19 pandemic and the supply response that ultimately materializes.”
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Considered the No. 3 oil-field service company, Baker Hughes follow rivals Schlumberger (with a loss of $7.4 billion) and Halliburton (a $1 billion loss) that also were faced with huge cuts to the value of assets.
Like those rivals, Baker Hughes has cut the company’s capital spending budget by 20 percent, readjusted business units, deployed cost-cutting technology and announced a small number of layoffs.
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Baker Hughes posts $10.2 billion 1st-quarter loss after write downs
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