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Baker Hughes, a GE company

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Baker Hughes, a GE company has businesses across more than 120 countries. It covers broader areas of businesses in the energy sector providing services and equipment to both the upstream and downstream spaces. Through second-quarter 2018, the company has clinched orders worth $6 billion, up 9% from a year ago. Moreover, its debt-to-capitalization ratio is recorded at 16.7%, significantly lower than the industry’s 29%, reflecting lower reliance on debt capital and strong balance sheet. However, in the trailing 12 months, Baker Hughes’ operating profit was the lowest among its peers. Also, through the April-to-June quarter of 2018, profits at the Turbomachinery & Processing unit declined 12.7% year over year. It raised questions about the effectiveness of Baker Hughes and General Electric merger. Therefore we maintain a cautious stance on the stock.