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Baker Hughes (BKR) Q4 Earnings Top Estimates, Revenues Miss
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Baker Hughes Company (BKR - Free Report) reported fourth-quarter 2023 adjusted earnings of 51 cents per share, which beat the Zacks Consensus Estimate of 47 cents. The bottom line also improved from the year-ago quarter’s level of 38 cents.
Total quarterly revenues of $6,835 million missed the Zacks Consensus Estimate of $6,909 million. The top line, however, increased from the year-ago quarter’s level of $5,905 million.
Strong quarterly earnings were primarily driven by higher contributions from the Oilfield Services and Equipment, and the Industrial & Energy Technology business units.
Baker Hughes was reorganized from four to two operating segments — Oilfield Services and Equipment, and Industrial & Energy Technology. The segments became operational from Oct 1, 2022.
Revenues from the Oilfield Services and Equipment unit amounted to $3,956 million, up 11% from the year-ago quarter’s figure of $3,579 million. Our estimate for revenues from the same unit was pegged at $3,933.4 million.
Operating income from the segment totaled $492 million, up 18% from $416 million reported in fourth-quarter 2022, backed by higher volumes.
Revenues from the Industrial & Energy Technology unit amounted to $2,879 million, up 24% from the year-ago quarter’s level of $2,325 million. Our estimate for revenues from the same unit was pegged at $2,971.3 million.
Operating income from the segment totaled $412 million, up 9% from the year-ago quarter’s level of $377 million, due to higher volumes and pricing.
Costs and Expenses
Baker Hughes recorded total costs and expenses of $6,183 million in the fourth quarter, up from the year-ago quarter’s figure of $5,242 million. The reported number is also above our projection of $6,148.4 million.
Orders
Orders from all business segments amounted to $6,904 million, down 14% year over year. We expected the figure to be $7,605.5 million.
The underperformance resulted from lower order intakes from the Oilfield Services and Equipment, and the Subsea & Surface Pressure Systems units.
Free Cash Flow
Baker Hughes generated a free cash flow of $633 million in the reported quarter compared with $657 million in the year-ago period.
Capex & Balance Sheet
BKR’s net capital expenditure in the fourth quarter was $298 million.
As of Dec 31, 2023, it had cash and cash equivalents of $2,646 million. The company had a long-term debt of $5,872 million at the end of the reported quarter, marking a debt-to-capitalization of 27.6%.
Zacks Rank & Stocks to Consider
Baker Hughes currently carries a Zacks Rank #3 (Hold).
Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. It has a core competency in terms of its history of disciplined expense management.
The Zacks Consensus Estimate for SUN’s 2024 EPS is pegged at $3.83. SUN currently has a Zacks Style Score of B for Value and Growth.
Oceaneering International is one of the leading suppliers of offshore equipment and technology solutions to the energy industry.
The Zacks Consensus Estimate for OII’s 2024 EPS is pegged at $1.52. OII currently has a Zacks Style Score of A for Growth, and B for Value and Momentum.
Enbridge is a leading energy infrastructure company. It plans to introduce more than C$19 billion in growth projects, contributing to significant EBITDA growth in the near future.
The Zacks Consensus Estimate for ENB’s 2024 EPS is pegged at $2.13. ENB currently has a Zacks Style Score of A for Momentum.
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Baker Hughes (BKR) Q4 Earnings Top Estimates, Revenues Miss
Baker Hughes Company (BKR - Free Report) reported fourth-quarter 2023 adjusted earnings of 51 cents per share, which beat the Zacks Consensus Estimate of 47 cents. The bottom line also improved from the year-ago quarter’s level of 38 cents.
Total quarterly revenues of $6,835 million missed the Zacks Consensus Estimate of $6,909 million. The top line, however, increased from the year-ago quarter’s level of $5,905 million.
Strong quarterly earnings were primarily driven by higher contributions from the Oilfield Services and Equipment, and the Industrial & Energy Technology business units.
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Segmental Performance
Baker Hughes was reorganized from four to two operating segments — Oilfield Services and Equipment, and Industrial & Energy Technology. The segments became operational from Oct 1, 2022.
Revenues from the Oilfield Services and Equipment unit amounted to $3,956 million, up 11% from the year-ago quarter’s figure of $3,579 million. Our estimate for revenues from the same unit was pegged at $3,933.4 million.
Operating income from the segment totaled $492 million, up 18% from $416 million reported in fourth-quarter 2022, backed by higher volumes.
Revenues from the Industrial & Energy Technology unit amounted to $2,879 million, up 24% from the year-ago quarter’s level of $2,325 million. Our estimate for revenues from the same unit was pegged at $2,971.3 million.
Operating income from the segment totaled $412 million, up 9% from the year-ago quarter’s level of $377 million, due to higher volumes and pricing.
Costs and Expenses
Baker Hughes recorded total costs and expenses of $6,183 million in the fourth quarter, up from the year-ago quarter’s figure of $5,242 million. The reported number is also above our projection of $6,148.4 million.
Orders
Orders from all business segments amounted to $6,904 million, down 14% year over year. We expected the figure to be $7,605.5 million.
The underperformance resulted from lower order intakes from the Oilfield Services and Equipment, and the Subsea & Surface Pressure Systems units.
Free Cash Flow
Baker Hughes generated a free cash flow of $633 million in the reported quarter compared with $657 million in the year-ago period.
Capex & Balance Sheet
BKR’s net capital expenditure in the fourth quarter was $298 million.
As of Dec 31, 2023, it had cash and cash equivalents of $2,646 million. The company had a long-term debt of $5,872 million at the end of the reported quarter, marking a debt-to-capitalization of 27.6%.
Zacks Rank & Stocks to Consider
Baker Hughes currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like Sunoco LP (SUN - Free Report) , Oceaneering International, Inc. (OII - Free Report) and Enbridge Inc. (ENB - Free Report) . While Sunoco and Oceaneering carry a Zacks Rank #1 (Strong Buy) each, Enbridge holds a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. It has a core competency in terms of its history of disciplined expense management.
The Zacks Consensus Estimate for SUN’s 2024 EPS is pegged at $3.83. SUN currently has a Zacks Style Score of B for Value and Growth.
Oceaneering International is one of the leading suppliers of offshore equipment and technology solutions to the energy industry.
The Zacks Consensus Estimate for OII’s 2024 EPS is pegged at $1.52. OII currently has a Zacks Style Score of A for Growth, and B for Value and Momentum.
Enbridge is a leading energy infrastructure company. It plans to introduce more than C$19 billion in growth projects, contributing to significant EBITDA growth in the near future.
The Zacks Consensus Estimate for ENB’s 2024 EPS is pegged at $2.13. ENB currently has a Zacks Style Score of A for Momentum.