Baker Hughes Company is bracing for a second wave of pandemic-induced lockdowns after the virus crippled economic activity around the world and compounded an historic oil bust.
The world’s No. 2 oilfield services contractor said in a statement on Wednesday that worldwide economic contraction probably reached a nadir in the second quarter, but warned that the outlook remains “extremely limited.”
“The risk of a second wave of virus cases, the reinstitution of select lockdowns, and the risk of lingering high unemployment creates an uncertain economic environment that likely persists through the rest of 2020,” chief executive officer Lorenzo Simonelli said in the statement.
Baker Hughes posted an adjusted per-share loss of 5 cents for the period, compared with an average estimate for a penny loss from analysts in a Bloomberg survey.
Simonelli is shrinking headcount and exiting non-core product lines as global drilling is set to slump to the lowest level since the turn of the century. The contractors hired to map underground pockets of oil and drill wells have been among the hardest hit after explorers slashed spending to cope with a market awash in crude.
More than 100,000 American oil workers have lost their jobs since the downturn began in March, with service companies bearing the brunt. After more than 200 oilfield service providers went under in the past five years, 2020 is shaping up to be the worst, with the highest volume of debt owed during bankruptcy, according to a tally by law firm Haynes & Boone LLP.
Halliburton Co. on Monday was the first of the world’s biggest service companies to report second-quarter results, blowing away analysts’ expectations for cost cuts while detailing a strategy to roll out more technology and look internationally for better revenue growth. Their largest competitor, Schlumberger Ltd., will release results on July 24.
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