Baker Hughes Incorporated

Baker Hughes Incorporated (BH - Analyst ReportI) has seen analysts lift full-year earnings estimates to $5.51 per share from the two months-ago level of $5.29. The oil and gas services play recently hiked its dividend and reported second-quarter results that reflected solid growth.

Company Description

Baker Hughes provides products and technology services to the oil and natural gas industries worldwide. Provides reservoir consulting, drilling, formation evaluation, completion and production products and services to the worldwide oil and gas industry.

Income

The company’s dividend of 15 cents per share was increased by 15% from the prior quarterly dividend of 13 cents. The dividend was paid out on August 15. BHI’s yield is 0.7%, which is competitive within its industry as very few of the company’s industry peers pay a dividend.

Strong Growth

A couple days prior to hiking the dividend, the company reported second-quarter earnings of $1.36 per share, excluding a charge. The result exceeded the consensus estimate by nearly 10% and surpassed the year-prior total. Revenue of $2,997.5 million was up 18% on a year-over-year basis.

Chad C. Deaton, Baker Hughes chairman, president, and chief executive officer said, "Activity levels improved in the United States in the quarter, particularly horizontal drilling on land, more than offsetting the seasonal sequential decline in Canada drilling activity. While the primary driver of increased rig activity in the U.S. compared to a year ago has been oil-directed drilling, we expect that our customers will increase the pace of their natural gas-directed activity in the second half of 2008, resulting in additional opportunities for Baker Hughes.”

Baker’s return on equity (ROE) of 25% is above the industry average of 17%. The company’s earning per share expected to grow by 19% over the next 3 – 5 years, versus the industry average of 17%.

Higher Forecasts

The company has seen analysts lift full-year earnings estimates to $5.51 per share from the two months-ago level of $5.29.