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What Was the Income Growth for CAM, HAL, BHI, and SLB?

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Income growth

Cameron International (CAM) is the only company in our group that reported positive fiscal 4Q15 net income. Its fiscal 4Q15 net income fell 51% to $125 million—compared to an ~$254 million net income a year earlier. At the operating income level, it managed to do relatively well due to strong project execution and a higher share of better margin services in the Subsea segment.

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Halliburton’s earnings fell

In fiscal 4Q15, Halliburton (HAL) recorded $28 million in net loss—compared to a $901 million net income a year earlier. The factors that primarily resulted in the net loss in fiscal 4Q15 were an $282 million pretax impairment and a $105 million pretax Baker Hughes acquisition-related cost.

At the operating level, the factors that impacted Halliburton’s fiscal 4Q15 performance were:

  • Lower prices for Halliburton’s services in the US
  • Lower drilling activity levels in the North Sea, Saudi Arabia, and Iraq

However, higher sales in China and increased activity in Kuwait, Oman, and Mexico partially offset the pressure on Halliburton’s margin.

More woes for Baker Hughes and Schlumberger

In fiscal 4Q15, Baker Hughes (BHI) reported a net loss of $1.03 billion—compared to $663 million in net income in fiscal 4Q14. In fiscal 4Q15, Baker Hughes recorded $1.19 billion in pretax North American onshore pressure pumping asset impairment charges. At the operating level, Baker Hughes’s income was impacted negatively by lower drilling activity in Mexico and a higher share of low-margin products in the Middle East or Asia-Pacific. This was partially offset by cost savings in its Industrial Services segment.

In fiscal 4Q15, Schlumberger (SLB) switched to a $1.01 billion net loss—compared to $302 million in net income a year ago. Schlumberger accounts for 7.7% of the Vanguard Energy ETF (VDE). The factors that impacted Schlumberger’s fiscal 4Q15 reported earnings were:

  • $530 million pretax workforce restructuring charges
  • $1.6 billion pretax impairment charge

Next, we’ll analyze the capital expenditure growth for these companies.

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