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Baker Hughes Inc. (BHI - Analyst Report) reported second-quarter 2013 adjusted earnings of 61 cents a share, which failed to beat the Zacks Consensus Estimate of 65 cents. The quarterly figure also fell 39.0% from the year-ago adjusted profit level of $1.00 per share. The results reflected the poor performance of the Latin America segment.

Total revenue of $5,487.0 million increased 3.0% from the year-ago level of $5,326.0 million. The top line also surpassed the Zacks Consensus Estimate of $5,223.0 million.

Second Quarter Segmental Highlights

Of the total quarterly revenue, North America, Europe/Africa/Russia/Caspian, Middle East/Asia-Pacific and Latin America accounted for 48.8%, 17.6%, 17.7% and 10.2%, respectively. The remainder was generated by the Industrial Services segment.

An improvement in before-tax profit was noticed only in the Middle East/Asia-Pacific region, which recorded a profit before-tax margin of 12.0% versus 11.0% in the year-ago quarter.

All other segments registered lackluster pre-tax margins, with North America coming in at 8.0% (compared with 13.0% in the year-earlier quarter). Pre-tax margins at the Europe/Africa/Russia/Caspian segment came in at 16.0% (versus 17.0% in the year-earlier quarter) and at the Industrial Services segment stood at 12.0% (versus 14.0% in the year-ago quarter).


At the end of the second quarter, Baker Hughes had $1,123.0 million in cash and cash equivalents, while long-term debt was $3,841.0 million, representing a debt-to-capitalization ratio of 17.9%. Baker Hughes' capital expenditures were $551.0 million in the quarter.   


Baker Hughes, the world's third-largest oilfield services provider following Schlumberger Ltd. (SLB - Analyst Report) and Halliburton Co. (HAL - Analyst Report), holds a Zacks Rank #3 (Hold) and is expected to perform in line with the broader market over the next few months.

However, one can consider a better performing sector stock like Gulfmark Offshore Inc. (GLF - Snapshot Report). The stock currently retains a Zacks Rank #1 (Strong Buy).


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