Oilfield services company Baker Hughes BKR.O surpassed analysts’ expectations for first-quarter profit, driven by heightened international drilling demand, and announced an increased dividend.
The average rise of nearly 10% in Brent crude LCOc1 during the quarter prompted oil firms to increase drilling activities, resulting in a surge in demand for oilfield services and equipment provided by Baker Hughes and its competitors.
Baker Hughes data indicated a 5.4% increase in the international rig count to 965 on average at the end of the first quarter, compared to the previous year. The company’s total revenue from its international segment rose to $2.79 billion in the quarter, up from $2.59 billion a year earlier.
Additionally, Baker Hughes secured an order to supply equipment for the third phase of oil giant Aramco’s gas network expansion project in Saudi Arabia.
The company’s strong performance in the international market aligns with a quarter where the top three oilfield services companies experienced robust international activity. Both SLBSLB.N and HalliburtonHAL.N benefited from demand in their international operations, offsetting weakness in North America.
While Baker Hughes reported a decline in total quarterly revenue from the North America segment, attributed to multi-year low natural gas prices limiting operators’ activities in the U.S., the company increased its quarterly dividend to 21 cents per share from 19 cents per share a year earlier.
CEO Lorenzo Simonelli expressed the company’s commitment to delivering 60%-80% of free cash flow to shareholders, with Baker Hughes repurchasing $158 million of shares during the quarter.
Baker Hughes reported an adjusted profit of 43 cents per share for the quarter ended March 31, surpassing analysts’ average estimate of 40 cents, according to LSEG data. The company’s revenue rose 12.3% to $6.42 billion, exceeding estimates of $6.37 billion.