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Baker Hughes (BKR) to Report Q4 Earnings: What's in the Cards?

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Baker Hughes Company (BKR - Free Report)  is set to report fourth-quarter 2021 results on Jan 20, before the opening bell.

In the last reported quarter, the oilfield service provider reported earnings of 16 cents per share, missing the Zacks Consensus Estimate of 22 cents per share due to a decline in cost productivity in Digital Solutions.

In the trailing four quarters, Baker Hughes beat the Zacks Consensus Estimate for earnings once and missed the same thrice, delivering a negative earnings surprise of 50.8%, on average. This is depicted in the graph below:

Baker Hughes Company Price and EPS Surprise

 

Let’s see how things have shaped up prior to the announcement.

Estimate Trend

The Zacks Consensus Estimate for fourth-quarter earnings per share of 29 cents has witnessed two downward movements in the past 30 days. The consensus estimate suggests an increase from a loss of 7 cents per share reported in the year-ago quarter.

The Zacks Consensus Estimate for the to-be-reported quarter’s revenues of $5.5 billion indicates a 0.07% increase from the year-ago reported figure.

Factors to Consider

The price of West Texas Intermediate crude was hovering above $70 per barrel in the December-end quarter of 2021. In comparison with the year-ago quarter, the commodity price has improved drastically. The favorable crude pricing environment and the strong recovery in fuel demand convinced explorers and producers to return to shale plays.

With the coronavirus vaccines being rolled out on a massive scale, the demand for fuel improved significantly. In fourth-quarter 2021, Baker Hughes reported an increase in drilling rigs operating in the United States.With upstream players returning to shale plays, higher oilfield service activities are expected to have aided Baker Hughes’ bottom line.

However, due to the new Omicron variant, the possibility of lockdowns increased dramatically in the December-end quarter, which has undoubtedly impacted the global oil demand.This is likely to have hurt the company’s operations.

Earnings Whispers

Our proven model does not indicate an earnings beat for Baker Hughes this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Baker Hughes has an Earnings ESP of -5.92%. This is because the Most Accurate Estimate for the quarter’s earnings is pegged at 27 cents per share, while the Zacks Consensus Estimate is pinned at 29 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Baker Hughes currently carries a Zacks Rank #3.

Stocks That Warrant a Look

Here are some companies from the Energy space that you may also want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Schlumberger Limited (SLB - Free Report) has an Earnings ESP of +2.86% and is a Zacks #3 Ranked player at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Schlumberger is scheduled to release the fourth-quarter results on Jan 21. The Zacks Consensus Estimate for SLB’s quarterly earnings is pegged at 39 cents per share, suggesting an increase of 77.3% from the prior-year reported figure.

Valero Energy (VLO - Free Report) has an Earnings ESP of +10.16% and it currently carries a Zacks Rank of 3.

Valero is scheduled to report the fourth-quarter results on Jan 27. The Zacks Consensus Estimate for Valero’s earnings is pegged at $1.58 per share, suggesting an increase of 249.1% from the prior-year reported figure.

PBF Energy (PBF - Free Report) has an Earnings ESP of +253.12% and it carries a Zacks Rank #3 at present.

PBF Energy is scheduled to release its fourth-quarter earnings on Feb 10. The Zacks Consensus Estimate for PBF’s earnings is pegged at 11 cents per share, suggesting a massive increase from the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.