Back to top

Analyst Blog

Baker Hughes Inc. (BHI - Analyst Report) reported first quarter 2013 adjusted earnings from continuing operations of 65 cents a share, which beat the Zacks Consensus Estimate of 62 cents aided by improved North America results. However, the quarterly figure fell 24.4% from the year-ago adjusted profit level of 86 cents a share.

The year-over-year decline stemmed mainly from seasonal weakness, in particular the Europe/Africa/Russia/Caspian segment. Moreover, weak activity in several important markets of Baker Hughes resulted in an unfavorable mix.

Total revenue of $5,230 million fell 2.3% from the year-ago level of $5,355 million. However, the top line surpassed the Zacks Consensus Estimate of $5,172 million.

First Quarter Segmental Highlights

Of Baker Hughes' total quarterly revenue, North America, Europe/Africa/Russia/Caspian, Middle East/Asia-Pacific and Latin America accounted for 50%, 16%, 17% and 11%, respectively. The remainder was generated by the Industrial Services segment.

An improvement in before-tax profit was noticed in the Middle East/Asia-Pacific region, which recorded a profit before-tax margin of 13% versus 10% in the year-ago quarter. The Industrial Services segment margin remained unchanged at 8%.

All other segments registered lackluster pre-tax margins, with North America coming in at 9% (compared with 14% in the year-earlier quarter) and Latin America coming in at 8% (versus 12%). Pre-tax margins at Europe/Africa/Russia/Caspian segment came in at 11% (versus 17% in the year-earlier quarter).

Liquidity

At the end of the first quarter, Baker Hughes had $1,101.0 million in cash and cash equivalents, while long-term debt was $3,844.0 million, representing a debt-to-capitalization ratio of 18.1%. The company's capital expenditures were $490.0 million in the quarter.

Ranks

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, there are other better performing sector stocks, like Zacks Ranked #1 Range Resources Corporation (RRC - Analyst Report), that are likely to outperform the market.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CITI TRENDS… CTRN 21.53 +5.49%
GTT COMMUNI… GTT 11.65 +4.11%
ALLERGAN IN… AGN 161.82 +3.99%
WILLIAMS(C)… CWEI 117.06 +3.73%
FIRSTSERVIC… FSRV 54.81 +2.62%