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Baker Hughes’s Management on Its 3Q16 Outlook

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What does Baker Hughes’s management think?

Baker Hughes’s (BHI) management believes that international upstream operations will continue to stay pressured. Some of the countries where drilling costs are high could see sharp activity reductions going forward. Baker Hughes’s management also believes that oilfield service (or OFS) companies’ pricing will remain challenging in 2H16. Baker Hughes also expects margins to improve sequentially as the benefits of BHI’s various restructuring efforts start to yield results. BHI makes up 0.12% of the iShares S&P 500 ETF (IVV).

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Baker Hughes’s outlook on different geographies

  • Baker Hughes expects the North American rig count to increase modestly in 2H16.
  • Baker Hughes expects the international rig count to fall in 2H16.
  • Higher upstream activity in the Middle East and Russia Caspian could benefit well construction because of lower lifting costs in conventional markets.
  • Upstream activity in deepwater could continue to decline.
  • BHI expects to gain market share in the production chemical business.

Next, we’ll discuss investors’ short interest in BHI’s stocks.

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