An uptick in Baker Hughes Co.'s stock price reflects the company's resiliency in the face of the current market downturn, despite widely anticipated dismal earnings results, analysts said.

Shares of the oilfield services major settled April 14 on the NYSE at $13.35, extending gains recorded April 13 despite a financial update that included a $15 billion noncash goodwill impairment charge in the first quarter.

The charge "will leave goodwill of $5.7 billion on the balance sheet pro forma as of end 2019," independent researcher CreditSights said April 13.

The market reacted positively to the April 13 news "not because of the $15 billion impairment," Credit Suisse analyst Jacob Lundberg said in an April 14 email. "Rather, the positive stock price move was the result of de-risking around lowering 2020 capital expenditures and introducing cost-saving measures."

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The April 13 update announced a 20% reduction in capex versus 2019 levels and a "right-sizing" plan that will result in restructuring, impairment and other charges of about $1.8 billion, of which $1.5 billion would be recorded in the first quarter.

"Both measures were expected by investors, but the announcement took away the uncertainty," Lundberg said.

Analysts had anticipated the company would take steps to reduce its size to better align with the current market conditions. Bank of America analysts expected Baker Hughes would report incremental 2020 cash restructuring charges of $300 million and 2020 capex of $630 million, the analysts said in an April 13 global research note.

While the company's reported cash outflows will be slightly above Bank of America estimates, it also means that annualized cost savings of $500 million per year will be $200 million higher than previously anticipated, Bank of America analysts said.

The higher cost savings exemplify the measures necessary for oilfield services sector companies to survive as customer activity tumbles amid demand erosion due to the COVID-19 pandemic and a price decline sparked by a production war between Russia and the OPEC+ alliance.

Producers, including U.S. major Exxon Mobil Corp., are slashing capital spending budgets. Exxon cut its budget for the year to approximately $23 billion, down 30% from a previously announced $33 billion.

Producer spending cuts could result in U.S. completions activity falling by 50% from the first quarter to the second quarter, Tudor Pickering Holt & Co. analysts said April 8.

Baker Hughes attributed the $15 billion noncash impairment charge primarily to its oilfield services and oilfield equipment segments, which are highly dependent on drilling and completions activity.

The services segment focuses on drilling, evaluation, completion, production and intervention of onshore and offshore wells. The equipment segment addresses the design and manufacture of subsea and surface drilling and production systems and services related to those products.

Despite segment concerns, Morgan Stanley analyst Connor Lynagh listed Baker Hughes among the large oilfield services companies stocks to own for its "best-in-class balance sheet" versus some of its peers.

Baker Hughes reported cash and cash equivalents totaling $3 billion for 2019, excluding assets held on behalf of General Electric. A revolving credit facility of $3 billion and access to commercial paper and other uncommitted lines of credit provide further support for liquidity.

The company had no borrowings outstanding under the revolver, the commercial paper program, or the uncommitted lines at the close of 2019 or the first quarter close, the company said April 13.

Tudor Pickering Holt said the services provider has a "particularly healthy balance sheet and plentiful access to liquidity [to] ensure that [it will] see the other side of this down-cycle and emerge from it in an even stronger competitive position."