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Why Is Baker Hughes (BKR) Up 0.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for Baker Hughes (BKR - Free Report) . Shares have added about 0.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Baker Hughes due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Baker Hughes Q2 Earnings & Revenue Beat Estimates
Baker Hughes reported second-quarter 2023 adjusted earnings of 39 cents per share, beating the Zacks Consensus Estimate of 32 cents. The bottom line improved from the year-ago quarter’s 11 cents.
Total quarterly revenues of $6,315 million surpassed the Zacks Consensus Estimate of $6,230 million. The top line also increased from the year-ago quarter’s $5,047 million.
Strong quarterly results have primarily been driven by higher contributions from the Oilfield Services and Equipment, and Industrial & Energy Technology business units.
Segmental Performance
Baker Hughes reorganized its company from four segments to two operating segments. Effective Oct 1, 2022, the two operating segments are Oilfield Services and Equipment, and Industrial & Energy Technology.
Revenues from the Oilfield Services and Equipment unit amounted to $3,877 million, up 20% from the year-ago quarter’s $3,230 million. Our estimate for the company’s revenues from the same unit was pegged at $3,707.7 million.
Baker Hughes’ operating income from the segment was $417 million, up from the $249 million reported in second-quarter 2022, backed by higher volumes.
Revenues from the Industrial & Energy Technology unit amounted to $2,438 million, up 34% from the year-ago quarter’s $1,816 million. Our estimate for the company’s revenues from the same unit was pegged at $2,432.4 million.
Baker Hughes’ operating income from the segment was $311 million, up from the year-ago quarter’s $236 million due to higher volumes and pricing.
Costs and Expenses
Baker Hughes has recorded total costs and expenses of $5,801 million in the second quarter, up from the year-ago quarter’s $5,072 million. The figure is also above our projection of $5,763.7 million.
Orders
Total orders of the company from all business segments in second-quarter 2023 amounted to $7,474 million, up 28% year over year. We expected the figure to be $5,959 million.
The outperformance resulted from higher order intakes from segments like Oilfield Services and Equipment, and Industrial & Energy Technology.
Free Cash Flow
Baker Hughes generated a free cash flow of $623 million in the reported quarter compared with the $147 million reported in the year-ago period. The figure beat our estimate of $227 million.
Capex & Balance Sheet
BKR’s net capital expenditure in the second quarter totaled $235 million.
As of Jun 30, 2023, Baker Hughes had cash and cash equivalents of $2,805 million. At the second-quarter end, the company had a long-term debt of $5,847 million, marking a debt-to-capitalization of 30.3%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Baker Hughes has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Baker Hughes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Baker Hughes (BKR) Up 0.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Baker Hughes (BKR - Free Report) . Shares have added about 0.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Baker Hughes due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Baker Hughes Q2 Earnings & Revenue Beat Estimates
Baker Hughes reported second-quarter 2023 adjusted earnings of 39 cents per share, beating the Zacks Consensus Estimate of 32 cents. The bottom line improved from the year-ago quarter’s 11 cents.
Total quarterly revenues of $6,315 million surpassed the Zacks Consensus Estimate of $6,230 million. The top line also increased from the year-ago quarter’s $5,047 million.
Strong quarterly results have primarily been driven by higher contributions from the Oilfield Services and Equipment, and Industrial & Energy Technology business units.
Segmental Performance
Baker Hughes reorganized its company from four segments to two operating segments. Effective Oct 1, 2022, the two operating segments are Oilfield Services and Equipment, and Industrial & Energy Technology.
Revenues from the Oilfield Services and Equipment unit amounted to $3,877 million, up 20% from the year-ago quarter’s $3,230 million. Our estimate for the company’s revenues from the same unit was pegged at $3,707.7 million.
Baker Hughes’ operating income from the segment was $417 million, up from the $249 million reported in second-quarter 2022, backed by higher volumes.
Revenues from the Industrial & Energy Technology unit amounted to $2,438 million, up 34% from the year-ago quarter’s $1,816 million. Our estimate for the company’s revenues from the same unit was pegged at $2,432.4 million.
Baker Hughes’ operating income from the segment was $311 million, up from the year-ago quarter’s $236 million due to higher volumes and pricing.
Costs and Expenses
Baker Hughes has recorded total costs and expenses of $5,801 million in the second quarter, up from the year-ago quarter’s $5,072 million. The figure is also above our projection of $5,763.7 million.
Orders
Total orders of the company from all business segments in second-quarter 2023 amounted to $7,474 million, up 28% year over year. We expected the figure to be $5,959 million.
The outperformance resulted from higher order intakes from segments like Oilfield Services and Equipment, and Industrial & Energy Technology.
Free Cash Flow
Baker Hughes generated a free cash flow of $623 million in the reported quarter compared with the $147 million reported in the year-ago period. The figure beat our estimate of $227 million.
Capex & Balance Sheet
BKR’s net capital expenditure in the second quarter totaled $235 million.
As of Jun 30, 2023, Baker Hughes had cash and cash equivalents of $2,805 million. At the second-quarter end, the company had a long-term debt of $5,847 million, marking a debt-to-capitalization of 30.3%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Baker Hughes has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Baker Hughes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.