Baker Hughes Warns of Tariff Impact on Annual Profits
(Reuters) -U.S. oilfield technology firm Baker Hughes on Tuesday flagged a potential impact on its annual core profit of between $100 million and $200 million due to tariffs.
U.S. President Donald Trump's trade policy has heightened uncertainty in the energy industry, as the ensuing trade war is expected to curb global economic growth and, subsequently, demand for energy.
Shares of the company were down 2.1% in after-market trade.
The company said the estimated impact is based on tariff rates applied during the 90-day pause and does not account for the potential hit of retaliatory tariffs or other levies that are not currently in place.
However, Baker Hughes beat Wall Street estimates for first-quarter profit helped by robust demand for natural gas technology.
With Big Tech pouring billions of dollars into artificial intelligence, the demand for electricity to feed power-hungry data centers has been increasing and, therefore, the demand for liquefied natural gas.
Baker Hughes has been trying to leverage its Industrial and Energy Technology (IET) portfolio to drive growth and expand its presence in the natural gas and LNG sectors.
Orders in Baker Hughes' gas technology jumped 17%, lifting revenue in its IET segment to $2.93 billion.
The Houston-based company provides compressors, turbines, valves and other modular systems to customers for gas processing.
Baker Hughes is the least likely of the Big 3 oilfield services firms to be impacted by tariff-related uncertainties and commodity prices due to the "heavy backlog" in its IET segment, analysts had told Reuters in the run-up to the earnings season.
The company reported an adjusted profit of 51 cents per share for the three months ended March 31, compared with the analysts' average expectation of 48 cents per share, according to data compiled by LSEG.
(Reporting by Mrinalika Roy and Tanay Dhumal in Bengaluru; Editing by Tasim Zahid and Alan Barona)
