Baker Hughes (BHI) Strikes with Impressive Earnings

Michael Teague |

Top US oil & gas services company Baker Hughes (BHI) reported earnings early on Friday morning that testified to an all-around spectacular third quarter.

For the recently ended period, Baker Hughes reported net income of $341 million, or $0.77 cents per share on revenue of $5.79 billion, compared to the prior year period during which the company earned $279 million, $0.63 per share on revenue of $5.03 billion. On an adjusted basis, the company beat surpassed expectations with earnings per share at $0.81, while Street expectations had been for $0.78 cents on revenue of $5.77 billion.

Furthermore, the company saw margins edge up over 10 percent, while the revenue and net income results represent increases of 8 and 22 percent respectively.

The increases are largely due to a ramping-up of international drilling operations, particularly in the Asia Pacific and Western Asian regions, as well as Canada, as lower natural gas prices in the US have put a crimp on demand closer to home. One-time items were the result of restructuring costs in operations in Latin America.

It should be evident by now that the shale/fracking revolution will not be contained to the North American continent. Oil and gas services companies stand to benefit greatly as a result, as they can skip about the globe plying their trade, not tied to any particular project or concern beyond what services operators request of them. Schlumberger Limited (SLB) , the world’s largest services company, also reported earnings on Friday with similarly impressive results.

Stern Agee’s Stephen Gengaro described Baker’s international performance thus: “The Middle East/Asia Pacific revenue and operating profit beat our estimates by 5.4% and 23.6%, respectively. Europe/Africa/Russia/Caspian operating profits were also strong and exceeded our estimates by 13.4%. The Middle East/Asia Pacific region continues to be the largest international segment for BHI.”

Shares for Baker Hughes were trading almost 8 percent higher on Friday, to $55.80 by midday. Schlumberger was also trading higher by 2.4 percent to $93.61.

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Companies

Symbol Name Price Change % Volume
BHI Baker Hughes Incorporated 66.32 0.51 0.77 2,218,684
SLB Schlumberger N.V. 84.78 0.31 0.37 4,825,920
DKTS Top Shelf Brands Holdings Corp 0.00 0.00 0.00 0

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