Must-know: What's in store for oilfield service stocks this year?

Part 3
Must-know: What's in store for oilfield service stocks this year? (Part 3 of 8)

Baker Hughes expects 2014 earnings per share of just over $4.00

Baker Hughes 2014 guidance

Baker Hughes (BHI) expects that in North America, profit margins will improve by at least 150 basis points in 1Q14 over 4Q13. In its international operating areas, the company expects a slight decrease in revenue and margins in 1Q14 over 4Q13, due to normal winter seasonality in Russia and Northern Asia as well as year-end product sales that occur in 4Q that don’t repeat into 1Q. In its Industrial Services segment, the company forecasts reduced activity in 1Q14 due to typical seasonal declines, with results similar to 1Q13. Ultimately, normal seasonal declines in international and industrial segments will be offset by better profitability in North America, resulting in 1Q14 earnings up slightly over 4Q13 (excluding the impact of one-time disruptions in Iraq that occurred in 4Q13). Based on BHI’s guidance and the outlook for the oilfield services industry, Wall Street analysts predicted 2014 EPS of just over $4.00 per share.

2014.01.31 - BHI FWD EPSEnlarge Graph

Baker Hughes also gave the following financial guidance for FY2014.

  1. Interest expense of ~$240 million to $250 million
  2. Corporate costs of ~$260 million to 270 million
  3. Depreciation and amortization of ~$1.8 billion to 1.9 billion
  4. Capital expenditures of ~$2 billion
  5. An effective tax rate of ~32% to 33%.

The Realist Discussions