London, UK | – Baker Hughes, one of the world’s largest oil field services companies and General Electric Company’s oilfield services arm, said on Tuesday it expected higher rig count in North American and international markets in 2019.
The company, which fell just short of estimates for third-quarter profit largely due to weakness in its turbomachinery and process solutions business, also indicated a strengthening offshore drilling market.
The results follow those from bigger rivals Schlumberger and Halliburton Corporation, which barely beat quarterly profit estimates and warned of slowing North America growth in the ongoing quarter.
U.S. rig count, an early indicator of future output, has risen from a year earlier thanks to a ramp up in production by companies seeking to benefit from a surge in global oil prices LCoc1.
But oilfield services firms have seen demand soften as U.S. producers cut back on spending, as transportation bottlenecks in the top shale region of Permian pushed the price of regional crude lower.
Baker Hughes said revenue in its oilfield services unit, which accounts for more than half of total sales, rose 12.5 percent to about $3 billion in the quarter from a year earlier.
Revenue from its oilfield equipment business, which includes deepwater drilling, rose 3 percent to $631 million.
Baker Hughes said it sold its first blowout preventer (BOP) since 2014, indicating that demand for offshore equipment may be returning. A BOP is a specialized valve used to control and monitor oil and gas wells to prevent blowouts.
“The offshore market is the strongest it has been in many years and the improving tender and order activity is an encouraging sign as we look out to 2019 and beyond,” Chief Executive Lorenzo Simonelli said in a statement.
The offshore sector, worst hit during the 2014 downturn, is now seeing signs of recovery, with a rebound in rates expected by 2020.
Baker Hughes, however, said revenue from its turbomachinery and process solutions business dropped 2 percent to about $1.40 billion.
The company reported adjusted net income of $78 million, or 19 cents per share, in the third quarter ended Sept. 30, compared with an adjusted loss of $7 million, or 2 cents per share, a year earlier.
Analysts on average had expected 20 cents per share, according to Refinitiv data.
Total revenue rose to $5.67 billion from $5.30 billion.
