Baker Hughes Co. (NASDAQ:BKR) is factoring a prolonged Strait of Hormuz closure into its financial guidance, with CFO Ahmed Moghal telling investors Friday the waterway may not fully reopen until the second half of the year.
“There’s still a great deal of uncertainty regarding, ultimately, the duration and depth of the conflict,” Moghal said on the company’s first-quarter earnings call.
CEO Lorenzo Simonelli also said that geopolitical risk is now an enduring feature of oil and gas markets. He noted that the shutdown has removed about 10% of global oil supply and disrupted roughly 20% of global LNG output, calling it the biggest oil supply disruption ever recorded. He added that these conditions are likely to result in “persistent risk premiums” in the market.
Q1 Results Beat Estimates
Baker Hughes reported its first-quarter results for the period ended March 31, showing revenue of $6.6 billion, a 2% increase compared to the previous year. Adjusted EBITDA climbed 12% to $1.158 billion, and orders jumped 26% year-over-year to $8.2 billion.
Adjusted diluted earnings per share were $0.58, exceeding the analyst estimate of $0.49 by 18.37%. However, free cash flow declined 54% year-over-year to $210 million.
Survey Data Backs The Grim Outlook
Simonelli’s caution aligns with a Federal Reserve Bank of Dallas survey of nearly 100 oil and gas executives, which found nearly 80% don’t expect the Strait to reopen until August or later.
The Strait of Hormuz, which carried roughly 20% of global oil supply before the war, has seen repeated disruptions amid the broader Middle East escalation. The waterway remains one of the most critical points of contention between the U.S. and Iran and is a focal point of potential peace negotiations between both nations.
Trading Metrics, Technical Analysis
Baker has a market capitalization of $68.37 billion, with a 52-week high of $69.86 and a 52-week low of $34.57.
The large-cap stock of the energy technology company has gained 89.50% over the past 12 months.
With a strong Momentum in the 87th percentile, Benzinga’s Edge Stock Rankings indicate that BKR has a positive price trend across all time frames.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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