We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Baker Hughes (BKR) Q1 Earnings Beat on Solid Oilfield Services
Read MoreHide Full Article
Baker Hughes Company (BKR - Free Report) reported first-quarter 2020 adjusted earnings of 11 cents per share, which beat the Zacks Consensus Estimate of 9 cents. However, the bottom line fell 27% from the year-ago quarter’s adjusted profit of 15 cents.
Revenues totaled $5,425 million, missing the Zacks Consensus Estimate of $5,637 million. Moreover, the figure was lower than the year-ago quarter’s $5,615 million.
The better-than-expected earnings were supported by strong performance of the Oilfield Services segment, and higher cost productivity in Turbomachinery & Process Solutions despite unfavorable business environment. This was partially offset by lower volume in the company’s Surface Pressure Control and Services businesses. The businesses were affected by lower demand for the company’s products due to the coronavirus-induced lockdowns that destroyed energy demand.
Baker Hughes Company Price, Consensus and EPS Surprise
Revenues from the Oilfield Services unit amounted to $3,139 million, up 5% from the year-ago figure of $2,986 million. Operating income from the segment was $206 million, up from $176 million reported in first-quarter 2019. The upside was driven by its strong performance despite unfavorable business environment caused by the coronavirus pandemic. It set a new record of remotely drilling 1.8 miles in 24 hours. Notably, the company delivered 150 remote wireline jobs through five regions.
Revenues from the Oilfield Equipment unit totaled $712 million, down 3% from the prior-year quarter’s $735 million. Notably, the segment reported a loss of $8 million against the year-ago quarter’s profit of $12 million. This year-over-year decline was caused by lower volume in the company’s Surface Pressure Control and Services businesses. The negatives were partially offset by higher volume in Subsea Production Systems and Flexible Pipe businesses.
Revenues from the Turbomachinery & Process Solutions unit declined to $1,085 million from $1,302 million a year ago, owing to lower equipment and services sales, as well as business dispositions. However, segmental income increased to $134 million from $118 million in the first quarter of 2019, owing to higher cost productivity.
Revenues from the Digital Solutions segment amounted to $489 million, down 17% from $592 million in the year-ago quarter. Operating profit at the segment totaled $29 million, down 57% from the year-ago quarter’s $68 million. The segment was affected by lower volumes from most of the businesses on account of the coronavirus pandemic.
Orders
Total orders from all business segments in first-quarter 2019 were $5,532 million, down 3% year over year, due to lower orders in Subsea Production Systems and Services businesses.
Free Cash Flow
The company generated positive free cash flow of $152 million in the reported quarter versus negative free cash flow of $419 million in the year-ago period.
Capex & Balance Sheet
Baker Hughes’ capital expenditure in the first quarter totaled $325 million, higher than $235 million in the year-ago period.
As of Mar 31, 2020, the company had cash and cash equivalents of approximately $3,010 million, and a long-term debt of $6,285 million, representing a debt-to-capitalization ratio of 25.9%.
Outlook
The company expects uncertainty in the oil and gas industry to prevail going forward. Economic recovery from the coronavirus pandemic and supply response to the market situation will drive future crude price environment. The company expects to cut costs and optimize portfolio to navigate through the current market uncertainty. It expects to reduce 2020 capital expenditures by more than 20% from 2019 levels.
RGC Resources’ 2020 earnings per share are expected to rise 14.8% year over year.
Murphy USA’s 2020 earnings per share are expected to rise 22.6% year over year.
Comstock Resources’ 2020 sales are expected to gain 33.1% year over year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Baker Hughes (BKR) Q1 Earnings Beat on Solid Oilfield Services
Baker Hughes Company (BKR - Free Report) reported first-quarter 2020 adjusted earnings of 11 cents per share, which beat the Zacks Consensus Estimate of 9 cents. However, the bottom line fell 27% from the year-ago quarter’s adjusted profit of 15 cents.
Revenues totaled $5,425 million, missing the Zacks Consensus Estimate of $5,637 million. Moreover, the figure was lower than the year-ago quarter’s $5,615 million.
The better-than-expected earnings were supported by strong performance of the Oilfield Services segment, and higher cost productivity in Turbomachinery & Process Solutions despite unfavorable business environment. This was partially offset by lower volume in the company’s Surface Pressure Control and Services businesses. The businesses were affected by lower demand for the company’s products due to the coronavirus-induced lockdowns that destroyed energy demand.
Baker Hughes Company Price, Consensus and EPS Surprise
Baker Hughes Company price-consensus-eps-surprise-chart | Baker Hughes Company Quote
Segmental Performance
Revenues from the Oilfield Services unit amounted to $3,139 million, up 5% from the year-ago figure of $2,986 million. Operating income from the segment was $206 million, up from $176 million reported in first-quarter 2019. The upside was driven by its strong performance despite unfavorable business environment caused by the coronavirus pandemic. It set a new record of remotely drilling 1.8 miles in 24 hours. Notably, the company delivered 150 remote wireline jobs through five regions.
Revenues from the Oilfield Equipment unit totaled $712 million, down 3% from the prior-year quarter’s $735 million. Notably, the segment reported a loss of $8 million against the year-ago quarter’s profit of $12 million. This year-over-year decline was caused by lower volume in the company’s Surface Pressure Control and Services businesses. The negatives were partially offset by higher volume in Subsea Production Systems and Flexible Pipe businesses.
Revenues from the Turbomachinery & Process Solutions unit declined to $1,085 million from $1,302 million a year ago, owing to lower equipment and services sales, as well as business dispositions. However, segmental income increased to $134 million from $118 million in the first quarter of 2019, owing to higher cost productivity.
Revenues from the Digital Solutions segment amounted to $489 million, down 17% from $592 million in the year-ago quarter. Operating profit at the segment totaled $29 million, down 57% from the year-ago quarter’s $68 million. The segment was affected by lower volumes from most of the businesses on account of the coronavirus pandemic.
Orders
Total orders from all business segments in first-quarter 2019 were $5,532 million, down 3% year over year, due to lower orders in Subsea Production Systems and Services businesses.
Free Cash Flow
The company generated positive free cash flow of $152 million in the reported quarter versus negative free cash flow of $419 million in the year-ago period.
Capex & Balance Sheet
Baker Hughes’ capital expenditure in the first quarter totaled $325 million, higher than $235 million in the year-ago period.
As of Mar 31, 2020, the company had cash and cash equivalents of approximately $3,010 million, and a long-term debt of $6,285 million, representing a debt-to-capitalization ratio of 25.9%.
Outlook
The company expects uncertainty in the oil and gas industry to prevail going forward. Economic recovery from the coronavirus pandemic and supply response to the market situation will drive future crude price environment. The company expects to cut costs and optimize portfolio to navigate through the current market uncertainty. It expects to reduce 2020 capital expenditures by more than 20% from 2019 levels.
Zacks Rank & Stocks to Consider
Currently, Baker Hughes has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are RGC Resources Inc. (RGCO - Free Report) , Murphy USA Inc. (MUSA - Free Report) and Comstock Resources, Inc. (CRK - 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.
RGC Resources’ 2020 earnings per share are expected to rise 14.8% year over year.
Murphy USA’s 2020 earnings per share are expected to rise 22.6% year over year.
Comstock Resources’ 2020 sales are expected to gain 33.1% year over year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>