Current BHI Stock Info

Large projects need stable higher oil
Baker Hughes (ticker: BHI) announced first quarter results today, showing a net loss of $129 million, or ($0.30) per share. After adjusting for impairments and merger-related costs, Baker reports a loss of $15 million, or ($0.04) per share. Both results exceed those of Q4 2016, when the company reported adjusted and non-adjusted losses of $701 million and $981 million, respectively.

Unlike Halliburton and Schlumberger, Baker Hughes’ revenue in North America fell 8% sequentially. This is due in large par...

Analyst Commentary

From Capital One:
• '17/'18 ests to -4c/$1.60 from 29c/$1.63 as we layer in a more conservative NA that's due to slower growth in chemicals and lift along w/ further GOM headwinds. Ests are coming down slightly, but the long term is still tied to pro-forma '20 EBITDA and possibly a higher synergy number upon GE/BHI closing in mid yr.
• 2Q NA growth is expected to be up modestly as chemicals track production growth and well construction performs well, but this is being mostly offset by GOM headwinds and the Canada breakup. Until the GOM bottoms, NA results will continue to be clouded; however, it's now apparent that BHI's US land biz will likely lag the rig count during the cycle due to its artificial lift and chemicals exposure. Int'l revs are expected to be flat q/q as further pricing deterioration and a soft offshore offset the seasonal bounce in EARC.

From SunTrust:
BHI's adjusted 1Q17 loss per share of ($0.23) was below our ($0.20)
estimate and the ($0.21) consensus estimate. BHI's adjusted loss per share of ($0.23) excludes -$0.26 after-tax for restructuring costs, asset impairments and merger related costs, and +$0.20 for recovery of bad debt in Ecuador, which relates to prior periods, with +$0.01 in rounding differences. The miss relative to our estimates was driven primarily by higher than expected SG&A and Research & Engineering expense.

We think these results will be modestly negative for BHI shares, with the ultimate near-term impact to be dictated by more detailed outlook comments on today's conference call.

Total revenue was within 1% of our estimates with revenue in OFS slightly lower than expected, mostly offset by Industrial & Other revenues 12% above our forecast. Margins were a mixed bag, with modestly better than expected margins in NAM, and much better than expected margins in Europe/Africa/Russia/Caspian, offset by lower than expected margins in Latin America, Middle East/Asia Pacific and Industrial. See the following pages for a comparison of BHI's reported results with our estimates.  


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