WEBVTT - Baker Hughes Reports, Netflix Earnings Recap, and Market Outlook 0:00:01.440 --> 0:00:05.320 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:00:05.400 --> 0:00:08.080 weekdays at ten am Eastern on Apple car Play and 0:00:08.080 --> 0:00:11.080 Android Auto with the Bloomberg Business App. Listen on demand 0:00:11.160 --> 0:00:15.240 wherever you get your podcasts, or watch us live on YouTube. 0:00:16.440 --> 0:00:18.560 All right, so it's in thick of earning season and 0:00:18.600 --> 0:00:20.599 there's a lot of interesting company stories coming out. What 0:00:20.720 --> 0:00:23.080 we want to highlight right now is Baker Hughes. It's 0:00:23.079 --> 0:00:25.960 an oil field services company with really two main businesses. 0:00:26.000 --> 0:00:29.800 One is legitimately just oil field services. You're helping oil 0:00:29.880 --> 0:00:33.080 producers make more oil out of the ground offshore and onshore. 0:00:33.159 --> 0:00:36.199 The other one is called Industrial and Energy Technology. That's 0:00:36.240 --> 0:00:39.840 new energy, that's LNG, it's export facilities, two big businesses. 0:00:40.080 --> 0:00:42.080 Revenue came in for the fourth quarter at about six 0:00:42.120 --> 0:00:45.160 point eight four billion dollars. Earnings came in a fifty 0:00:45.200 --> 0:00:48.080 one cents a share. And we're joined now by Lorenzo Simonelli. 0:00:48.120 --> 0:00:51.760 He's chairman, president and CEO of Baker Hughes. Lorenzo, it's 0:00:51.800 --> 0:00:53.840 so good to see you. Thanks for joining us today. 0:00:54.800 --> 0:00:57.000 Alex. Good to be with you as always. 0:00:56.680 --> 0:00:57.200 So listen. 0:00:57.240 --> 0:00:59.880 The stock is down three percent. The commentary from analyst 0:01:00.120 --> 0:01:03.280 is your outlook isn't as rosy as your peers like 0:01:03.320 --> 0:01:04.800 Halliburton and Slumberge. 0:01:04.800 --> 0:01:05.600 What do you say to that? 0:01:07.240 --> 0:01:09.280 I would say, first of all, we're coming off some 0:01:09.319 --> 0:01:12.240 great results in twenty twenty three, and also we've laid 0:01:12.240 --> 0:01:15.759 out a clear strategy, as Baker hughes, over the coming years. 0:01:16.080 --> 0:01:18.520 As you look at twenty twenty four, we've given a 0:01:18.560 --> 0:01:21.520 guidance that is the balanced approach with all of the 0:01:21.560 --> 0:01:25.520 geopolitical and also uncertainty that's happening around the globe. So 0:01:26.080 --> 0:01:28.560 we stick to our guidance and we think that we're 0:01:28.640 --> 0:01:31.160 executing and as you look at the guidance, we've got 0:01:31.200 --> 0:01:35.320 considerable growth in twenty twenty four and great performance as well. 0:01:35.640 --> 0:01:39.360 So what's the biggest question mark? I guess so if 0:01:39.400 --> 0:01:43.240 you're more conservative than your peers, where is the question mark? 0:01:43.440 --> 0:01:46.399 Is it going to be the new energy orders? Is 0:01:46.440 --> 0:01:48.600 it going to be on shore demand or is it 0:01:48.640 --> 0:01:51.160 going to be offshore? Is it domestic or international that 0:01:51.240 --> 0:01:54.400 has you thinking questioning the most? 0:01:55.480 --> 0:01:57.920 You know, you look at what's happening around the world, 0:01:57.920 --> 0:02:01.040 and you see the geopolitics, you see what's happening from 0:02:01.080 --> 0:02:04.400 the OPEC cuts, you see what's happening from the consolidation 0:02:04.920 --> 0:02:08.800 in North America, and that leads some uncertainty relative to 0:02:08.960 --> 0:02:13.560 the activity levels within North America Land. We still see 0:02:13.880 --> 0:02:18.799 that North America should be flatish, but US Land will 0:02:18.919 --> 0:02:22.240 likely be negative for the year given some of the consolidation, 0:02:22.360 --> 0:02:25.960 and also some of the activity international again will be 0:02:26.040 --> 0:02:28.520 in the high single digits, So we still see that 0:02:28.600 --> 0:02:31.600 being robust. And I think again, as we look at 0:02:31.639 --> 0:02:35.639 giving guidance, we're taking a balanced approach to what's taking 0:02:35.680 --> 0:02:38.600 place around the world at this moment and also giving 0:02:38.840 --> 0:02:42.519 a predictability to our investors on what can be achieved 0:02:42.520 --> 0:02:44.680 and also confidence in what we can achieve. 0:02:45.200 --> 0:02:47.680 Lorenzo, I just looking at your business here, and I 0:02:47.720 --> 0:02:49.560 see that about three quarters of your revenue as comes 0:02:49.560 --> 0:02:52.640 from outside of the United States, So obviously you are 0:02:52.639 --> 0:02:55.160 attuned as much as anyone to the geopolitical risks around 0:02:55.240 --> 0:02:58.440 the world. What are you telling your investors about what's 0:02:58.480 --> 0:03:01.560 happening in Eastern or if it's happening in the Middle East, 0:03:01.560 --> 0:03:03.200 and how that may impact your business. 0:03:04.760 --> 0:03:08.520 We're telling them that we've taken every caution and also 0:03:08.600 --> 0:03:12.440 we're managing the situation. We haven't seen any impact and 0:03:12.919 --> 0:03:16.720 we don't anticipate a big impact, but we do think 0:03:16.840 --> 0:03:20.280 some of the development plans may be delayed slightly over 0:03:20.280 --> 0:03:23.640 the long term. No change in what the NOCs and 0:03:23.720 --> 0:03:27.079 also large customers are laying out from a capital spend, 0:03:27.400 --> 0:03:30.160 but there may be some I would say delays. Again, 0:03:30.320 --> 0:03:34.000 as we look at the outlook internationally, we're still anticipating 0:03:34.400 --> 0:03:38.360 high single digit growth and we think that internationally is 0:03:38.360 --> 0:03:40.320 a key place for us to be and we look 0:03:40.360 --> 0:03:41.920 to perform there over the coming years. 0:03:42.440 --> 0:03:46.320 Lorenzo, what's your take on the demand side? I guess 0:03:46.360 --> 0:03:48.360 that would focus more on oil and it does also 0:03:48.680 --> 0:03:51.160 hit on the red sea issue. But what's the man 0:03:51.240 --> 0:03:53.400 going to look like for twenty twenty four? I'm getting 0:03:53.440 --> 0:03:56.320 notes about twenty twenty five, but I have no idea 0:03:56.440 --> 0:03:57.680 what's going to happen this year? 0:03:59.280 --> 0:04:02.040 Wow, Alex, it's so always difficult to predict some of 0:04:02.080 --> 0:04:04.840 these elements, just like it is oil price and you 0:04:04.920 --> 0:04:09.280 know this space well. I think demand continues to be robust. 0:04:09.680 --> 0:04:12.600 A lot of it's going to depend on the economic 0:04:12.760 --> 0:04:15.680 situation as you look at some of the events unfolding 0:04:15.720 --> 0:04:21.080 also globally, and we anticipate that again demand will increase 0:04:21.160 --> 0:04:24.640 this year and continue to be strong, especially in the 0:04:24.680 --> 0:04:25.479 developing world. 0:04:26.120 --> 0:04:28.760 What are your customers telling you here I know obviously 0:04:28.800 --> 0:04:31.839 close contact with them. What are they telling you about 0:04:31.839 --> 0:04:35.919 their spending plans over the next couple of years. 0:04:37.600 --> 0:04:42.440 Again, it varies. You've seen in North America obviously some consolidation, 0:04:42.640 --> 0:04:45.719 so people are going through that consolidation and they'll be 0:04:45.800 --> 0:04:49.000 looking to adjust some of their spending plans in the 0:04:49.040 --> 0:04:53.039 short term, but again continuing to be robust on the 0:04:53.080 --> 0:04:55.520 long term as you continue to see the demand be 0:04:55.600 --> 0:05:00.480 there on the international side, these NOCs have more year 0:05:00.600 --> 0:05:04.359 projects that they're executing. There'll be some variation in the 0:05:04.440 --> 0:05:07.520 timing of those, but again the long term continues to 0:05:07.520 --> 0:05:10.559 be solid, and as you look at our guidance, again 0:05:10.600 --> 0:05:14.919 we're anticipating that maybe there's some tempered view on some 0:05:15.040 --> 0:05:18.280 of the case of the development, but the developments are 0:05:18.320 --> 0:05:18.960 going to happen. 0:05:19.800 --> 0:05:23.320 OC Paul just you know, national oil companies just pull 0:05:23.440 --> 0:05:27.960 up with the oil jargon there. Lorenzo, you mentioned the 0:05:28.040 --> 0:05:30.440 M and A situation, and I find that so interesting 0:05:30.480 --> 0:05:32.479 because that was one of my questions to all these 0:05:32.480 --> 0:05:35.359 CEOs when they announce these big mergers, is are you 0:05:35.440 --> 0:05:38.240 actually going to be slowing your oil production growth over time, 0:05:38.240 --> 0:05:40.800 and they're all like, no, no, no, no, no, it's going 0:05:40.880 --> 0:05:43.200 to be really good. It's going to keep growing. What 0:05:43.279 --> 0:05:45.680 do you think that timeline actually looks like? In the 0:05:45.680 --> 0:05:47.680 beginning their synergies, they get more out of the ground, 0:05:47.680 --> 0:05:48.680 but then that tapers off. 0:05:48.800 --> 0:05:49.920 What do you notice? 0:05:51.560 --> 0:05:54.880 So as you look at the normal evolution of consolidation 0:05:55.040 --> 0:05:58.320 we've seen this cycle before, you are going to continue 0:05:58.360 --> 0:06:01.240 to see a production increases, but you're also going to 0:06:01.279 --> 0:06:04.680 see synergies between the consolidation and as they go through 0:06:04.680 --> 0:06:09.000 their integration activities, I think you'll likely see some temperate 0:06:09.680 --> 0:06:13.039 measures relative to some of their procurement, but again production, 0:06:13.200 --> 0:06:16.480 they're going to seize the opportunity to continue to increase 0:06:16.520 --> 0:06:18.479 production as the demand is there. 0:06:19.120 --> 0:06:21.520 Yeah, I mean, you know, I'm not an expert in 0:06:21.560 --> 0:06:24.280 this unlike Alex. But a term I you see here 0:06:24.320 --> 0:06:26.159 a lot and I don't hear it that much anymore 0:06:26.240 --> 0:06:28.600 is peak oil? When are we going to be at 0:06:28.600 --> 0:06:30.640 peak oil? Are we at peak? I don't hear that 0:06:30.680 --> 0:06:34.760 discussion anymore. So when you're talking to investors, how do 0:06:34.800 --> 0:06:37.320 you talk to them about the long term kind of 0:06:37.360 --> 0:06:39.120 demand for oil? 0:06:40.920 --> 0:06:42.800 You've got to look at it from a standpoint of 0:06:42.960 --> 0:06:47.039 the energy transition is going to be multi decades and 0:06:47.120 --> 0:06:50.839 it's going to require an energy mix that is abundant 0:06:50.839 --> 0:06:56.479 of providing as clean as possible fuel sources to the public, 0:06:57.000 --> 0:06:59.080 and that means oil is going to have a role 0:06:59.120 --> 0:07:02.919 to play. And we see oil and gas in particular 0:07:03.240 --> 0:07:06.240 having a strong robust outlook as we go forward. And 0:07:06.680 --> 0:07:09.400 the question on pea coil has been asked many times. 0:07:09.800 --> 0:07:12.520 There will be a time when pea coil comes. I 0:07:12.560 --> 0:07:16.080 think it's not at this stage, and we continue to 0:07:16.120 --> 0:07:19.200 focus very much on gas and also LNG. 0:07:19.400 --> 0:07:21.960 Well i'm speaking of so Llen G. Paul is huge 0:07:22.160 --> 0:07:22.920 for Baker Hughes. 0:07:22.960 --> 0:07:25.640 So they helped to build the export terminals that you 0:07:25.720 --> 0:07:28.160 get and that has been a humongous driver here in 0:07:28.200 --> 0:07:30.320 the US. And just to focus on that for a second, 0:07:30.680 --> 0:07:32.800 they booked about one hundred and sixty nine million dollars 0:07:32.840 --> 0:07:34.920 worth of new energy orders in the quarter and overall 0:07:34.960 --> 0:07:36.960 for the year seven hundred and fifty million. Like that's 0:07:36.960 --> 0:07:42.640 growing at a very rapid clip, Lorenzo. Somehow, restricting ler 0:07:42.680 --> 0:07:45.440 G exports in the US is becoming something people are 0:07:45.480 --> 0:07:49.920 talking about. The permit process has gotten a lot slower. 0:07:49.960 --> 0:07:53.480 What is going on, Alex. 0:07:53.600 --> 0:07:57.360 It has gotten slower, and again we're monitoring the situation, 0:07:58.000 --> 0:08:02.120 and I'm disappointed because as you look at the benefits 0:08:02.160 --> 0:08:06.120 of USLNG not only for the US but also for 0:08:06.280 --> 0:08:09.640 the world, and also what's been achieved with the geopolitical 0:08:09.720 --> 0:08:13.360 uncertainty and also providing to Europe, there's been commitments that 0:08:13.400 --> 0:08:17.600 have been made and we should continue the USLNG exports 0:08:17.600 --> 0:08:21.080 and also the permitting of these projects. That being said, 0:08:21.360 --> 0:08:24.960 international projects are continuing to move forward, and we have 0:08:25.000 --> 0:08:28.280 an expectation that again in twenty twenty four there'll be 0:08:28.400 --> 0:08:34.440 sixty five mtpa FIDD, and we're again seeing about thirty 0:08:34.480 --> 0:08:38.360 to sixty mtpa FIDD in twenty five and twenty six, 0:08:38.440 --> 0:08:42.240 and by twenty thirty there'll be a global capacity in 0:08:42.320 --> 0:08:45.600 place of eight hundred mtpa. So, you know, we'll monitor 0:08:45.679 --> 0:08:49.200 the US situation. It's disappointing. I think it will sort 0:08:49.240 --> 0:08:51.240 itself out. There's been a lot of commitments that have 0:08:51.320 --> 0:08:54.520 been made to international partners. 0:08:54.040 --> 0:08:57.480 Because you know, again, Lorenzo, I've learned so much just 0:08:57.520 --> 0:09:00.800 from talking to Alex about the energy business. Now that 0:09:00.840 --> 0:09:05.160 we're the US is a net energy exporter, it just 0:09:05.200 --> 0:09:08.640 seems like the natural gas part of the liquified natural 0:09:08.640 --> 0:09:09.199 gas part of. 0:09:09.120 --> 0:09:11.480 It has to grow, you know. 0:09:11.600 --> 0:09:13.360 So I guess my question is if I wanted to 0:09:13.440 --> 0:09:15.760 go down to Corpus Christy and hire you guys to 0:09:15.760 --> 0:09:18.280 build me a LNG facility, could you do it? 0:09:18.360 --> 0:09:21.320 Yeah, you have to wait a while. Their backlogs really deep, Lorenzo. 0:09:22.200 --> 0:09:24.560 We have a very good backlog and we continue to 0:09:24.559 --> 0:09:28.560 grow our backlog in LNG, and yes, we can build. 0:09:28.600 --> 0:09:32.800 We have the most versatile portfolio of solutions around LNG, 0:09:33.400 --> 0:09:39.959 small scale, large scale, stick modular, onshore, offshore floating. So 0:09:40.400 --> 0:09:43.280 you're coming to the right place, Baker Hughes for LNG, 0:09:44.240 --> 0:09:44.440 and I. 0:09:44.400 --> 0:09:47.440 Should point out MTPA million tons per annum, So it 0:09:47.520 --> 0:09:49.880 just basically means the capacity, like how much you can 0:09:49.920 --> 0:09:52.760 actually process an export because you got a cool natural 0:09:52.760 --> 0:09:56.560 gas down before you export. Lorenzo, I am going to 0:09:56.559 --> 0:09:58.840 see you next week for the annual meeting. In your 0:09:58.840 --> 0:10:02.680 annual meeting in Florence, the talk will definitely be Italy. 0:10:03.320 --> 0:10:04.760 Really, I know you are to me right. 0:10:04.720 --> 0:10:08.200 Not Florence, South Carolina, Florence, Italy. They hate Lorenz nice. 0:10:08.760 --> 0:10:10.600 And the talk is definitely going to be revolving a 0:10:10.640 --> 0:10:14.040 lot around that LNG story for investors. Just looking at 0:10:14.040 --> 0:10:16.400 the numbers today, the stock doown three percent. What's your 0:10:16.440 --> 0:10:18.960 main message before we get to the broader outlook next week. 0:10:20.559 --> 0:10:23.760 The main message is we're coming off a terrific twenty 0:10:23.840 --> 0:10:27.880 twenty three where we posted some record results. Our strategy 0:10:28.000 --> 0:10:31.160 is very clear. We set out guidance that continues to grow. 0:10:31.240 --> 0:10:35.839 The business continues to post improvements in our embat homogen rates. 0:10:36.360 --> 0:10:39.600 We're expecting OFSC to be a twenty percent for twenty 0:10:39.640 --> 0:10:42.760 twenty five, it to be a twenty percent by twenty 0:10:42.800 --> 0:10:47.000 twenty six. We're not changing those expectations and we're taking 0:10:47.000 --> 0:10:49.840 a balanced approach to twenty twenty four. But when you 0:10:49.880 --> 0:10:52.360 look at the guidance, it continues to move the company 0:10:52.400 --> 0:10:54.960 forward and also posts very good results. 0:10:55.280 --> 0:10:58.920 Lorenzo, I really appreciate that the conservative approach and then 0:10:58.960 --> 0:11:01.160 sort of moving a lot faster in the next couple 0:11:01.200 --> 0:11:01.439 of years. 0:11:01.480 --> 0:11:01.960 Thanks a lot. 0:11:02.160 --> 0:11:04.560 I look forward to seeing you next week in Florence, Italy. 0:11:04.679 --> 0:11:08.680 Thank you, Lorenzo Semonelli. He's chairman, CEO and president of 0:11:09.160 --> 0:11:11.520 Baker Hughes. Now we're going to do something that only 0:11:11.600 --> 0:11:14.360 Paul and I can do. Talk to a CEO, then 0:11:14.400 --> 0:11:16.880 bring a Bloomberg Intelligence analyst who's been covering the company 0:11:16.920 --> 0:11:18.959 for years on to then talk about it. This is 0:11:18.960 --> 0:11:21.319 what we can offer you on the Bloomberg Intelligence Show 0:11:21.800 --> 0:11:26.080 every day, Scott Levine, he covers oil services for Bloomberg Intelligence. 0:11:26.840 --> 0:11:28.560 What did you make of the move today the numbers 0:11:28.600 --> 0:11:30.640 and just talking with Lorenzo in the last ten minutes. 0:11:31.040 --> 0:11:33.800 Yeah, now, I think so. The stock is down a 0:11:33.840 --> 0:11:38.800 bit today, and we've seen Halliburton and SLB up on 0:11:38.880 --> 0:11:44.240 earnings over the past week. Frankly, the guidance that Baker 0:11:44.320 --> 0:11:48.040 gave today for mid teens EBIT dog growth is almost 0:11:48.040 --> 0:11:51.640 identical to what SLB gave. I think the difference here 0:11:51.720 --> 0:11:56.920 is probably the conservatism around the messaging number one, certainly 0:11:57.000 --> 0:12:00.840 the mid load to mid single digital client that they're 0:12:00.840 --> 0:12:05.040 calling for, spending growth in North America, high single digit 0:12:05.120 --> 0:12:08.360 growth in international trails what we saw out of both 0:12:08.400 --> 0:12:12.760 of those two companies. And then secondarily, you know, LNG, 0:12:12.880 --> 0:12:15.480 as you mentioned, is a really big driver for Baker 0:12:15.559 --> 0:12:18.280 that's unique to them, certainly much more so for them 0:12:18.800 --> 0:12:23.320 as a producer of modules for LNG plants, which neither 0:12:23.440 --> 0:12:26.000 SLB and Hell do and I would say that the 0:12:26.400 --> 0:12:29.839 commentary there was maybe a little bit more downbeat as well. 0:12:29.880 --> 0:12:34.800 They're looking for modest growth and FID capacity this year 0:12:35.760 --> 0:12:38.120 they focused more on some of the businesses outside of that. 0:12:38.200 --> 0:12:41.360 So I think it's probably more so the tone out 0:12:41.360 --> 0:12:45.360 of Baker being a bit more sober than the guidance 0:12:45.440 --> 0:12:48.320 per se, which was in line with consensus, and the 0:12:48.320 --> 0:12:51.360 growth outlooks similar to what we saw at the piers there. 0:12:51.720 --> 0:12:57.000 So I'm looking at the A n R function for Baker, Hughes, Halibert, 0:12:57.160 --> 0:12:57.840 all the comps. 0:12:58.600 --> 0:13:03.160 Street likes this stuff. They like these oil services companies. 0:13:03.440 --> 0:13:04.839 What's the bull call on this? 0:13:04.920 --> 0:13:05.160 Is this? 0:13:05.720 --> 0:13:07.120 People? You're going to need oil forever? 0:13:07.960 --> 0:13:10.440 Yeah, well they're you know, they are investing in the 0:13:10.480 --> 0:13:13.600 future with the energy transition and the new energy business 0:13:13.679 --> 0:13:14.320 as well. 0:13:14.880 --> 0:13:15.880 But I think, you. 0:13:15.800 --> 0:13:18.320 Know, so look two years ago twenty twenty two, this 0:13:18.440 --> 0:13:22.200 group was outstanding, right, you know, the group was up 0:13:22.240 --> 0:13:25.040 sixty percent, the market was down closed to twenty percent. 0:13:25.559 --> 0:13:29.680 Last year the group performed okay in a much stronger market, 0:13:30.360 --> 0:13:33.800 and the growth expectations for the group have moderated and 0:13:33.840 --> 0:13:38.360 are moderating still in twenty twenty four. I think within 0:13:38.440 --> 0:13:44.040 that context, Folks are still comfortable with large cap globally 0:13:44.200 --> 0:13:49.600 diversified oil field service companies like Baker Hues, like SLB 0:13:49.840 --> 0:13:52.600 to a lesser extent, Haliburton because they're more focused on 0:13:52.640 --> 0:13:56.840 North America. But they're still comfortable with these companies. They're large, 0:13:56.880 --> 0:13:59.719 they're global, the balance sheets are in good shape, that 0:13:59.760 --> 0:14:03.040 we're turning more than fifty percent of the free cash 0:14:03.480 --> 0:14:07.240 to investors, and so that appeals to investors that kind 0:14:07.280 --> 0:14:12.120 of are attuned to this new energy environment where it's discipline, 0:14:12.160 --> 0:14:16.880 growth and capital returns rather than the wildcatter mentality. So 0:14:16.920 --> 0:14:17.720 I think it's what I like. 0:14:17.880 --> 0:14:18.840 I like the wildcatter. 0:14:19.120 --> 0:14:19.680 I like that. 0:14:20.280 --> 0:14:22.720 Yeah, I called SLB slummers. I'm definitely gonna hear from 0:14:22.720 --> 0:14:24.040 them later, but SLB. 0:14:24.800 --> 0:14:27.240 So to that point, though, I feel like if you 0:14:27.240 --> 0:14:30.840 talk to SLB, they'll talk a lot about digitalization and 0:14:30.880 --> 0:14:33.760 all that kind of stuff, whereas Baker Hughes talks really 0:14:33.800 --> 0:14:37.920 about LNG and they build these big terminals they help 0:14:38.000 --> 0:14:40.240 to do that, like with the likes of Bechtel, for example, 0:14:41.640 --> 0:14:43.400 do you feel like at some point these guys are 0:14:43.440 --> 0:14:45.520 gonna be you can really bet on them different ways, 0:14:45.600 --> 0:14:47.600 Like I'm gonna bet On Baker Hughes for LNG. I'm 0:14:47.600 --> 0:14:50.400 gonna bet an SLB for an AI component and digitalization, 0:14:50.520 --> 0:14:51.480 like can I do that yet? 0:14:52.480 --> 0:14:53.040 You can? 0:14:53.320 --> 0:14:56.880 And I think those are accurate depictions of the business. 0:14:57.080 --> 0:15:01.440 But I wouldn't overstate their signs magnificance, like I feel 0:15:01.480 --> 0:15:06.080 like Halliburton gets maligned a lot for the North American exposure. 0:15:05.600 --> 0:15:08.040 And they're all some solid international. 0:15:07.720 --> 0:15:09.200 It's over half their business. 0:15:09.280 --> 0:15:11.640 I totally didn't know that until yeah no the other day. 0:15:11.800 --> 0:15:15.440 But SLB is eighty percent international, and these guys are 0:15:15.720 --> 0:15:18.120 closer to SLB than they are to HOL in terms 0:15:18.160 --> 0:15:22.560 of that geographic split. So, you know, while the statement 0:15:22.640 --> 0:15:27.560 is true, I think it's it's equal parts branding as 0:15:27.600 --> 0:15:30.320 it is the business mix, and investors are naturally going 0:15:30.320 --> 0:15:32.840 to look for ways to differentiate between the companies, and 0:15:32.880 --> 0:15:35.560 so they'll, you know, they'll gravitate towards the differences more 0:15:35.560 --> 0:15:38.120 than they will the similarities. But I think there are 0:15:38.120 --> 0:15:40.440 a lot of similarities in the balance sheet. All the 0:15:40.480 --> 0:15:45.440 companies are focused on global markets to more or lesser extent, 0:15:45.640 --> 0:15:50.560 and so with with Baker, the LNG emphasis is a differentiator. 0:15:50.640 --> 0:15:54.200 For sure, they have a much bigger equipment business than 0:15:54.200 --> 0:15:58.560 either SLB or Halliburton does. And so it's natural folks 0:15:58.560 --> 0:16:02.160 to focus on that specifically. And and some of the 0:16:02.200 --> 0:16:04.560 weakness and demand out of Europe maybe is weighing on 0:16:04.600 --> 0:16:06.760 that story a little bit, but it's still a very 0:16:06.800 --> 0:16:08.360 strong business for them. 0:16:08.400 --> 0:16:11.080 And if I were an investor, I would prefer my 0:16:11.240 --> 0:16:15.040 oil field services and equipment companies to be more international 0:16:15.120 --> 0:16:17.200 rather than less, given how tough it is to get 0:16:17.240 --> 0:16:19.080 stuff done here in the US. 0:16:19.160 --> 0:16:19.560 Is that right? 0:16:20.000 --> 0:16:20.200 Yeah? 0:16:20.240 --> 0:16:23.920 I think certainly there's much more visibility. 0:16:23.160 --> 0:16:25.800 On it years ago statement. 0:16:25.960 --> 0:16:27.960 Yeah, I guess it depends what time we're talking about. 0:16:28.040 --> 0:16:30.400 And and and you know, look, shale had the year 0:16:30.440 --> 0:16:33.200 that the energy you know, blew the lights out twenty 0:16:33.240 --> 0:16:37.320 twenty two. Shale came back much stronger from COVID than 0:16:37.360 --> 0:16:40.600 international markets did they get tough faster, but they got 0:16:40.680 --> 0:16:43.600 crushed more significantly, And so that was a little bit 0:16:43.600 --> 0:16:48.760 of a one year snap back and shale and and 0:16:48.840 --> 0:16:52.160 so you know, we've now we're now past that. International 0:16:52.360 --> 0:16:56.880 really reaccelerated and overtook shale toward the middle of last year, 0:16:56.920 --> 0:16:59.720 and the expectation is that they'll they'll do so again 0:16:59.760 --> 0:17:01.400 this year. So I still think there's much more of 0:17:01.440 --> 0:17:06.280 a multi year growth visibility on international including. 0:17:05.840 --> 0:17:08.640 Offshore energy is definitely going to be a talking point 0:17:08.680 --> 0:17:09.760 in the presidential election. 0:17:10.440 --> 0:17:11.800 The reality is a little different. 0:17:13.200 --> 0:17:15.920 When we say, drill, baby, drill, We're gonna unleash American 0:17:16.160 --> 0:17:19.359 energy independence. My question is is that not happening? And 0:17:19.440 --> 0:17:21.240 then my other question is are we going to see 0:17:21.280 --> 0:17:26.440 restrictions or any sort of slowing down of LNG exports. 0:17:26.560 --> 0:17:30.479 Regarding the latter, I don't think so, no, and I 0:17:30.520 --> 0:17:32.359 don't you know, yes, we've already heard some of the 0:17:32.440 --> 0:17:36.080 drill baby drill mantra, and I think you know, they're. 0:17:35.960 --> 0:17:37.480 Ten million barrels a day and good. 0:17:37.359 --> 0:17:40.440 Enough that hearkens back to a different time. That's you know, 0:17:40.800 --> 0:17:45.800 I think the intent there is is for for voters 0:17:45.840 --> 0:17:49.000 to see that messaging, right. But the area where you 0:17:49.040 --> 0:17:52.239 think you probably see the most difference, frankly, is in 0:17:52.320 --> 0:17:57.560 the energy transition technologies. And you know, for example, we 0:17:57.880 --> 0:18:01.480 you know, plug Power yesterday was a thirty percent as 0:18:01.480 --> 0:18:04.639 a you know, based on enthusiasm for them getting a 0:18:04.680 --> 0:18:09.919 loan from the Department of Energy, and so you know, 0:18:10.080 --> 0:18:14.680 there's been some concern and pushback regarding the incentives around 0:18:14.760 --> 0:18:17.760 hydrogen development, et cetera. And so if we were to 0:18:17.800 --> 0:18:22.400 see a change anywhere, I think, you know, if indeed 0:18:22.400 --> 0:18:25.840 we see a change in the Republican Party getting the 0:18:25.880 --> 0:18:29.359 president presidency in twenty four, it'll be with regard to 0:18:29.400 --> 0:18:32.639 the er the incentives for the energy transition, and maybe 0:18:32.760 --> 0:18:36.879 that getting some throat cold water thrown on it. But 0:18:37.200 --> 0:18:40.120 as far as US oil, you know, during the Biden administration, 0:18:40.240 --> 0:18:43.120 production has grown fine. Despite some of the tough talk 0:18:43.200 --> 0:18:45.960 you heard about cracking down on leases in the Gulf 0:18:46.000 --> 0:18:49.560 of Mexico, offshore is done just fine, and I don't 0:18:49.560 --> 0:18:52.679 think it's much of a difference factor in terms of 0:18:52.760 --> 0:18:54.120 conventional oil and gas. 0:18:54.520 --> 0:18:57.119 So great, Scott, thank you so much. I appreciate it. 0:18:57.160 --> 0:18:59.160 Thanks for all answering all my emails with my chickens 0:18:59.560 --> 0:19:01.000 running too earlier in the day. It Scott of being 0:19:01.000 --> 0:19:04.000 a Bloomberg intelligency covers all the oil field services. 0:19:05.640 --> 0:19:09.520 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:19:09.600 --> 0:19:13.120 weekdays at ten am Eastern on applecar Play and Android 0:19:13.160 --> 0:19:15.960 Auto with the Bloomberg Business app. You can also listen 0:19:16.040 --> 0:19:19.160 live on Amazon Alexa from our flagship New York station 0:19:19.520 --> 0:19:22.560 just say Alexa playing Bloomberg eleven thirty. 0:19:24.040 --> 0:19:30.840 Annett Rathbund cio at CBIZ maybe SEBIZ Investment Advisory Services, Independence, Ohio. 0:19:30.880 --> 0:19:33.520 That sounds like really right smack in the middle of Ahio. 0:19:33.520 --> 0:19:34.639 If I had to guess, I don't know. 0:19:34.880 --> 0:19:36.960 And thanks so much for joining us here. 0:19:37.600 --> 0:19:41.160 Again, I thought we might take a meaningful pause here 0:19:41.160 --> 0:19:44.040 in the first quarter with these markets, given the real 0:19:44.160 --> 0:19:47.600 rip we had in November and December. What do you 0:19:47.600 --> 0:19:49.320 make of this market here as we you know, kind 0:19:49.320 --> 0:19:51.640 of get into the back half of January and twenty 0:19:51.640 --> 0:19:52.080 twenty four. 0:19:53.359 --> 0:19:57.119 Sure, thanks for having me. And actually, Independence, Ohio is 0:19:57.560 --> 0:20:03.480 ten minutes south of cleveland'srection we go, so they should 0:20:03.480 --> 0:20:07.200 really said Cleveland, Ohio. But anyway, you know, SMP, it's 0:20:07.640 --> 0:20:10.320 kind of surprising after all the bearish talk last year 0:20:10.359 --> 0:20:13.320 that we would be reaching record highs multiple days in 0:20:13.320 --> 0:20:15.120 a row. It looks like today might be another one 0:20:15.160 --> 0:20:18.640 of those days. But it's important to remember what's driving this, right. 0:20:18.640 --> 0:20:21.960 I mean, everyone's talked about tech driving this magnificent seven 0:20:22.080 --> 0:20:25.480 becoming even more magnificent, But you know, there may be 0:20:25.520 --> 0:20:29.000 a reason why if you look at the underlying trends 0:20:29.040 --> 0:20:31.800 in the SMP five hundred you do have tech leading, 0:20:32.320 --> 0:20:36.280 but how many stocks and how many sectors or sub 0:20:36.320 --> 0:20:39.520 industries are actually hitting those record highs along with the 0:20:39.640 --> 0:20:44.080 SMP five hundred, the cyclical parts of the sectors that 0:20:44.119 --> 0:20:47.680 represent the cyclical parts of the economy, they're not reaching 0:20:47.960 --> 0:20:51.000 record highs, right, So this is a reflection of some 0:20:51.160 --> 0:20:54.280 of the changes or the bifurcation that we see in 0:20:54.320 --> 0:20:57.960 the economy being reflected here. So do I think that 0:20:58.280 --> 0:20:59.520 tech can continue to run? 0:20:59.560 --> 0:20:59.760 Well? 0:20:59.760 --> 0:21:02.919 Look, I mean I think that tech is a part 0:21:03.080 --> 0:21:06.800 of utilities. The pandemic has taught us that it is 0:21:06.840 --> 0:21:09.320 a part of infrastructure. We can't live without it. It 0:21:09.359 --> 0:21:12.199 is part of our daily lives. It's I mean, some 0:21:12.240 --> 0:21:14.520 people might say Netflix is a part of their you know, 0:21:14.560 --> 0:21:18.880 social infrastructure as we thought today. I don't think tech 0:21:18.960 --> 0:21:21.080