Back to top

Image: Bigstock

Baker Hughes (BHGE) Q1 Earnings Top, Sales Match Estimates

Read MoreHide Full Article

Baker Hughes, a GE company (BHGE - Free Report) reported first-quarter 2019 adjusted earnings of 15 cents per share, which beat the Zacks Consensus Estimate by a penny, backed by higher order volume in the Subsea Production Systems business. Moreover, the bottom line rose from the year-ago quarter’s 9 cents due to increased activities in the Middle East and Sub-Saharan Africa.

Revenues totaled $5,615 million, in line with the Zacks Consensus Estimate. The figure is higher than the year-ago quarter’s $5,399 million, driven by increased volume in Measurement & Sensing, and Pipeline & Process Solutions businesses.

Baker Hughes, a GE company Price, Consensus and EPS Surprise

Baker Hughes, a GE company Price, Consensus and EPS Surprise | Baker Hughes, a GE company Quote

Segmental Performance

Revenues from the Oilfield Services unit amounted to $2,986 million, up 12% from the year-ago quarter’s sales of $2,678 million. Operating income from the business segment came in at $176 million, up from $141 million in first-quarter 2018. The upside was driven by increased activities in the Middle East and Sub-Saharan Africa.

Revenues from the Oilfield Equipment unit totaled $735 million, up 11% from the prior-year quarter’s $664 million. Notably, the segment reported profit of $12 million against a loss of $6 million in the year-ago quarter. The upside can be attributed to a rise in order volume in the Subsea Production Systems business.

Revenues from the Turbomachinery & Process Solutions unit declined to $1,302 million from $1,460 million a year ago. Moreover, segmental income fell to $118 million from $119 million in the first quarter of 2018 owing to lower equipment installations and upgrades.

Revenues from the Digital Solutions segment amounted to $592 million, down 1% from $598 million in the year-ago quarter. Operating profit in the business segment totaled $68 million, down 6% from the year-ago quarter’s $73 million. The segment was affected by lower volumes in Controls and Software businesses, partially offset by higher volumes in Measurement & Sensing and Pipeline & Process Solutions businesses.

Orders

Total orders from all its business segments through first-quarter 2019 were around $5.7 billion, up 9% year over year. Oilfield Equipment, Oilfield Services and Digital Solutions business units were responsible for the upside.

Capex & Balance Sheet

Baker Hughes’ capital expenditure in the first quarter totaled $235 million.

As of Mar 31, 2019, the company had cash and cash equivalents of approximately $3,073 million, as well as a long-term debt of $6,270 million, representing a debt-to-capitalization ratio of 15.2%.

Zacks Rank and Stocks to Consider

Currently, Baker Hughes carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Cactus, Inc. (WHD - Free Report) , Hess Corp. (HES - Free Report) and Chevron Corp. (CVX - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  

Cactus’ earnings growth is projected at 11.8% through 2019.

Hess’ earnings are expected to grow 90.5% through 2019.

Chevron’s earnings will likely grow 3.4% on a year-over-year basis in the second quarter of 2019.

Is Your Investment Advisor Fumbling Your Financial Future?

See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.”

Click to get it free >>