Analysts Weigh In on Baker Hughes ahead of Its Earnings Release



Baker Hughes’s earnings

In 3Q16, analysts expect Baker Hughes (BHI) to post an adjusted loss of $0.44 per share. This means Wall Street analysts expect BHI’s adjusted loss to more than halve in the coming quarter compared to the 2Q16 adjusted loss of $0.90 per share. Reactivation of rigs in the US and higher upstream activity in the Middle East and Russia Caspian could lower Baker Hughes’s 3Q16 earnings. However, persistent pricing pressure and project delays in some of BHI’s international operations could keep pressuring earnings. BHI is expected to release its 3Q16 financial results on October 25.

Baker Hughes posted steady earnings per share (or EPS) growth from 2Q13 through 4Q14. During this period, its adjusted EPS rose 136%. But the falling rig count sent its 1Q15 adjusted EPS crashing to an adjusted loss. From 2Q15 through 2Q16, adjusted net loss per share deteriorated significantly.

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Baker Hughes’s earnings versus estimates

In 2Q16, Baker Hughes’s adjusted EPS fell short of analysts’ consensus EPS. On average, the company’s adjusted EPS fell short of consensus EPS by ~12% in the last 13 quarters, as noted in the graph above.

Analysts expect Oceaneering International’s (OII) 3Q16 adjusted earnings to fall to $0.17 per share compared to its adjusted 2Q16 earnings of $0.27. OII’s market capitalization is ~$2.7 billion compared to BHI’s $22.3 billion. BHI makes up 0.24% of the iShares S&P 500 Value ETF (IVE). The energy sector makes up 13.3% of IVE. Learn more about Wall Street analysts’ estimates for the oilfield services companies in Market Realist’s Wall Street’s Pick: Best and Worst OFS Stocks for 3Q16.

Next, we’ll discuss how rig count can affect Baker Hughes’s revenues.


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