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Shares of energy services firm Baker Hughes slipped on Wednesday after reporting second quarter results that fell short of Wall Street estimates as it shifts its business to technology and services that help customers transition to a lower carbon world.

Baker Hughes Co swung to a profit from a loss a year-ago, but was down 9 per cent from the prior quarter and missed analysts forecasts. Earnings were hurt by $125-million in impairment and restructuring charges.

Shares slipped 1 per cent to $19.86. Brent crude futures were up about 2 per cent on Wednesday to $70.77 per barrel.

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While oil demand has rebounded from the pandemic lows seen last year, spending on oil field services has only inched higher as energy companies hold spending and production flat.

The recovery in oil demand may face a threat from new strains of COVID-19, but spending and activity should gain momentum through the year as the business environment improves, Chief Executive Officer Lorenzo Simonelli said in a statement.

Baker Hughes is rebranding itself as an energy transition company, focusing on technology and shedding some traditional oil field businesses. Revenue at its oil field services unit was down about 2 per cent year-over-year, while oil field equipment revenue dipped 8 per cent over that period.

In oil field services, Simonelli projected high single-digit to low double-digit percentage growth in international markets in the second half of the year and modest growth in North American markets. He anticipates companies will add around 50 rigs in North America through the end of the year, with private companies picking up activity at current price levels.

Adjusted net income attributable to the company was $83-million, or 10 cents per share, in the quarter ended June 30, compared with $91-million, or 12 cents per share, in the first quarter. Wall Street analysts had anticipated earnings of 16 cents per share, according to Refinitiv IBES.

Revenue of $5.142-billion for the quarter topped forecasts of $4.948-billion, according to Refinitiv.

Overall, Wall Street analysts said the results were neutral to positive, pointing to stronger profit margins and free cash flow.

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Investment firm Tudor Pickering Holt & Co called the report “solid” and lauded Baker’s continued focus on technological innovation and the energy transition.

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