Baker Hughes Company (BKR) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

October 19, 2022 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen and welcome to Baker Hughes Company Third Quarter 2022 Earnings Call. As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Mr. Jud Bailey, Vice President of Investor Relations. Sir, you may begin.

Jud Bailey - VP, IR

Thank you. Good morning, everyone and welcome to the Baker Hughes third quarter 2022 earnings conference call. Here with me are our Chairman and CEO, Lorenzo Simonelli; and our CFO, Brian Worrell. The earnings release we issued earlier today can be found on our website at bakerhughes.com.

As a reminder, during the course of this conference call, we will provide forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. Please review our SEC filings and website for a discussion of the factors that could cause actual results to differ materially. As you know, reconciliations of operating income and other GAAP to non-GAAP measures can be found in our earnings release.

With that, I will turn the call over to Lorenzo.

Lorenzo Simonelli - Chairman and CEO

Thank you, Jud. Good morning, everyone and thanks for joining us. We were generally pleased with our third quarter results with strong performance in OFS, while TPS successfully managed multiple challenges. We also saw strong orders performance with continued momentum in OFE as well as TPS.

As I mentioned during our second quarter earnings call, the macro outlook has grown increasingly uncertain. The global economy is dealing with the strongest inflationary pressures since the 1970s, a rising interest rate environment and sizable fluctuations in global currencies. Despite these economic challenges, we remain constructive on the outlook for oil and gas and believe that underlying fundamentals remain supportive of a multiyear upturn in global upstream spending. Operators around the world have shown a great deal of financial discipline, which we expect to translate into a more durable upstream spending cycle even in the face of an unpredictable commodity price environment.

In the oil market, we expect continued price volatility as demand growth likely softens under the weight of higher interest rates and inflationary pressures. However, we expect supply constraints and production discipline to largely offset any demand weakness. This should support price levels that are conducive to driving double-digit upstream spending growth in 2023.