雅虎香港財經 Baker Hughes (BKR) Down 1.8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Baker Hughes (BKR). Shares have lost about 1.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Baker Hughes due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Baker Hughes Q1 Earnings And Revenues Top Estimates
Baker Hughes Company reported first-quarter 2024 adjusted earnings of 43 cents per share, which beat the Zacks Consensus Estimate of 40 cents. The bottom line also improved from the year-ago quarter’s level of 28 cents.
Total quarterly revenues of $6,418 million beat the Zacks Consensus Estimate of $6,341 million. The top line also increased from the year-ago quarter’s level of $5,716 million.
Strong quarterly results were primarily driven by significant contracts in the Oilfield Services and Equipment business unit. Additionally, in the Industrial and Energy Technology segment, Baker Hughes won major awards for gas technology projects in Saudi Arabia and Canada.
Segmental Performance
BKR was reorganized from four to two operating segments — Oilfield Services and Equipment, and Industrial & Energy Technology. The segments became operational from Oct 1, 2022.
Revenues from the Oilfield Services and Equipment unit amounted to $3,783 million, up 6% from the year-ago quarter’s figure of $3,577 million. Our estimate for revenues from the same unit was pegged at $3,857 million.
Operating income from the segment totaled $422 million, up 14% from $371 million reported in first-quarter 2023, backed by higher volumes.
Revenues from the Industrial & Energy Technology unit amounted to $2,634 million, up 23% from the year-ago quarter’s level of $2,138 million. Our estimate for revenues from the same unit was pegged at $2,451 million.
Operating income from the segment totaled $330 million, up 37% from the year-ago quarter’s level of $241 million, due to higher volumes and pricing.
Costs and Expenses
Baker Hughes recorded total costs and expenses of $5,765 million in the first quarter, up from the year-ago quarter’s figure of $5,278 million. Our projection for the same was pinned at $5,779 million.
Orders
Orders from all business segments amounted to $6,542 million, down 14% year over year. We expected the figure to be $7,576.6 million.
The underperformance resulted from lower order intakes from Oilfield Services and Equipment, Subsea & Surface Pressure Systems and a significant drop in Gas Technology Equipment orders.
Free Cash Flow
Baker Hughes generated a free cash flow of $502 million in the reported quarter compared with $197 million in the year-ago period.
Capex & Balance Sheet
BKR’s net capital expenditure in the first quarter was $282 million.
As of Mar 31, 2024, it had cash and cash equivalents of $2,717 million. The company had a long-term debt of $5,859 million at the end of the reported quarter, marking a debt-to-capitalization of 27.5%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Baker Hughes has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Baker Hughes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Baker Hughes belongs to the Zacks Oil and Gas - Field Services industry. Another stock from the same industry, Liberty Oilfield Services (LBRT), has gained 2.2% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Liberty Oilfield Services reported revenues of $1.07 billion in the last reported quarter, representing a year-over-year change of -15%. EPS of $0.48 for the same period compares with $0.90 a year ago.
Liberty Oilfield Services is expected to post earnings of $0.65 per share for the current quarter, representing a year-over-year change of -25.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -1%.
Liberty Oilfield Services has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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