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What Do Analysts Expect from Baker Hughes’s 3Q17 Earnings?

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What Do Analysts Expect from Baker Hughes’s 3Q17 Earnings? PART 1 OF 6

What Do Analysts Expect from Baker Hughes’s 3Q17 Earnings?

Baker Hughes’s 3Q17 earnings estimates

In 3Q17, analysts expect Baker Hughes, a GE Company (BHGE), to report adjusted earnings per share of ~$0.14. Thus, Wall Street analysts expect BHGE to switch from its 2Q17 adjusted loss of $0.11 per share to an adjusted net profit in 3Q17. Strong crude oil price recovery, as well as the benefits that will come from merging Baker Hughes’s reservoir modeling expertise with GE’s design and manufacturing capability, and Baker Hughes’s completion equipment suite with GE’s advanced wellbore placement are expected to drive this earnings recovery. However, a deceleration in the US rig count and slower recovery from some of BHGE’s international operations can partially dent BHGE’s growth outlook. BHGE will hold its 3Q17 earnings conference call on October 20, 2017. Read more on the merger in Market Realist’s GE to Partner with BHI? The Changing Oilfield Services Landscape.

What Do Analysts Expect from Baker Hughes’s 3Q17 Earnings?

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From 2Q16 through 2Q17, BHGE cut adjusted losses by 88%, which reflects a higher rig count and the effects of partial pricing recovery due to stronger energy drilling and production activities. BHGE makes up 3.1% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). Since October 4, 2016, XES has fallen 12% compared to a 5% rise in BHGE’s stock price during the same period. BHGE also makes up 0.07% of the SPDR S&P 500 ETF (SPY). The S&P 500 Index (SPX-INDEX) rose 18% in the past year.

Baker Hughes’s earnings versus estimates

In 2Q17, Baker Hughes’s adjusted EPS beat the analysts’ consensus EPS. On average, however, BHGE’s adjusted EPS fell short of the consensus EPS by ~24% in the past 13 quarters until 2Q17.

Analysts’ estimates for BHGE’s peers

By comparison, Weatherford International’s (WFT) 3Q17 adjusted loss is expected to fall to $0.24 compared to a $0.28 loss per share in 2Q17. Wall Street analysts expect Core Laboratories’ (CLB) 3Q17 adjusted earnings to fall 12% compared to its 2Q17 adjusted earnings. Fairmount Santrol Holdings’ (FMSA) 3Q17 adjusted earnings are expected to improve 50% compared to its adjusted 2Q17 earnings. Read about what analysts expect from OFS companies’ 3Q17 earnings in Market Realist’s The Top and Bottom of Oilfield Service Stocks in 3Q17.

Series highlight

We’ll discuss Baker Hughes’s value drivers and what the sell-side analysts are suggesting for BHGE. Next, we’ll discuss rig count and Baker Hughes’s North America and international revenues.

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