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What's in Store for Baker Hughes (BHGE) in Q2 Earnings?
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Baker Hughes, a GE company is scheduled to report second-quarter 2018 results on Jul 20, before the opening bell.
In the last reported quarter, the company reported a positive earnings surprise of 50%. However, the oilfield service player failed to beat the Zacks Consensus Estimate in two of the last four quarters, the average negative surprise being 42.49%.
Let’s see how things are shaping up for the quarterly release.
Factors at Play
On Jul 3, 2017, General Electric had acquired Baker Hughes and merged it with its oil and gas equipment and services businesses.
However, investors didn’t shout approval for the acquisition as following its closure, share prices of both the companies took a hit. Baker Hughes has lost 43.9% since the acquisition, underperforming the 10% collective decline of the stocks belonging to the industry, while General Electric slipped 49.3%.
It seems that although crude prices have made a massive comeback, Baker Hughes, with its scattered operations in 120 countries, could not benefit from the surge in commodity prices. In fact, as compared to other oilfield service players, the trailing 12-month operating performances of Baker Hughes was the weakest.
What Our Model Indicates
Our proven model does not show an earnings beat for Baker Hughes this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. However, that is not the case here as you will see below.
Earnings ESP: Baker Hughes has an Earnings ESP of -5.80%. This is because the Most Accurate estimate of 13 cents is below the Zacks Consensus Estimate of 14 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Baker Hughes has a Zacks Rank #4 (Sell).
Please note that we caution investors against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Though an earnings beat looks uncertain for Baker Hughes, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
ConocoPhillips (COP - Free Report) , based in Houston, TX, is a leading upstream energy firm. The company has an Earnings ESP of +13.46% and flaunts a Zacks Rank #1.
Houston, TX-based EOG Resources, Inc (EOG - Free Report) is a major independent oil and gas exploration and production player. The company has an Earnings ESP of +4.60% and a Zacks Rank #1.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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What's in Store for Baker Hughes (BHGE) in Q2 Earnings?
Baker Hughes, a GE company is scheduled to report second-quarter 2018 results on Jul 20, before the opening bell.
In the last reported quarter, the company reported a positive earnings surprise of 50%. However, the oilfield service player failed to beat the Zacks Consensus Estimate in two of the last four quarters, the average negative surprise being 42.49%.
Let’s see how things are shaping up for the quarterly release.
Factors at Play
On Jul 3, 2017, General Electric had acquired Baker Hughes and merged it with its oil and gas equipment and services businesses.
However, investors didn’t shout approval for the acquisition as following its closure, share prices of both the companies took a hit. Baker Hughes has lost 43.9% since the acquisition, underperforming the 10% collective decline of the stocks belonging to the industry, while General Electric slipped 49.3%.
It seems that although crude prices have made a massive comeback, Baker Hughes, with its scattered operations in 120 countries, could not benefit from the surge in commodity prices. In fact, as compared to other oilfield service players, the trailing 12-month operating performances of Baker Hughes was the weakest.
What Our Model Indicates
Our proven model does not show an earnings beat for Baker Hughes this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. However, that is not the case here as you will see below.
Earnings ESP: Baker Hughes has an Earnings ESP of -5.80%. This is because the Most Accurate estimate of 13 cents is below the Zacks Consensus Estimate of 14 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Baker Hughes has a Zacks Rank #4 (Sell).
Please note that we caution investors against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Though an earnings beat looks uncertain for Baker Hughes, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
Occidental Petroleum Corporation (OXY - Free Report) is involved in both oil and gas exploration and midstream energy businesses. The company has an Earnings ESP of +6.84% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
ConocoPhillips (COP - Free Report) , based in Houston, TX, is a leading upstream energy firm. The company has an Earnings ESP of +13.46% and flaunts a Zacks Rank #1.
Houston, TX-based EOG Resources, Inc (EOG - Free Report) is a major independent oil and gas exploration and production player. The company has an Earnings ESP of +4.60% and a Zacks Rank #1.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>