Baker Hughes Company BKR is grappling with the coronavirus-induced weak global energy demand. The oilfield service firm has witnessed downward earnings estimate revisions in the past 60 days from $1.06 to 67 cents per share, indicating a year-over-year decline of 21.2% for 2020.
The coronavirus pandemic has dented worldwide energy demand, leading crude oil to continue trading in the bearish territory. Due to this, explorers and producers are cutting their 2020 capital budget and restricting operating activities. Cimarex Energy Co. XEC, Pioneer Natural Resources Company PXD and EOG Resources Inc. EOG are among the upstream firms that are reducing capital budgets. Thus, with lower spending by explorers, there would be reduced demand for oilfield services since oilfield service players assist drillers in efficiently setting up oil and gas wells.
A significant drop in spending by customers is also getting reflected in the declining rig count in North American oil and natural gas resources. In its latest monthly rig count, Baker Hughes revealed that the total tally of rigs (both onshore & offshore) in North America for the month of March 2020 came in at 905, significantly lower than the year-ago month’s 1,174.
Overall, a slowdown in customers’ exploration and production operations in North America is likely to hurt the bottom line of Baker Hughes –which carries a Zacks Rank #5 (Strong Sell).
Baker Hughes Company Price
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