Oil Service Companies Set for Grim Earnings Reports
Oil service companies are set to reveal the impact of the Iran war on their earnings in the coming week. SLB Ltd., Baker Hughes Co., and Halliburton Co. will be among those reporting their quarterly results, with analysts predicting a significant decline in profits.
Halliburton is expected to report a 2% drop in per-share profit when it kicks off the sector's earnings season on Tuesday, according to average analyst estimates. SLB is seen reporting a 31% fall, which would be the biggest falloff since the last three months of 2020. Baker Hughes is expected to follow with a 21% drop.
The companies have higher exposure to the Middle East, where production was curbed or stopped entirely in several countries due to the war. The situation remains unpredictable, and investors will be seeking insight into the path forward for these regions.
Despite the challenges in the Middle East, Scott Gruber of Citigroup Global Markets Inc. notes that oil field activity is improving outside of this region. North American operators are seeing an increase in activity, with higher oil prices encouraging producers to add about 46 oil rigs from lows in December.