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Baker Hughes (BKR) Down 0.1% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Baker Hughes (BKR - Free Report) . Shares have lost about 0.1% in that time frame, outperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Baker Hughes Q4 Earnings & Revenue Miss Estimates
Baker Hughes reported fourth-quarter 2022 adjusted earnings of 38 cents per share, missing the Zacks Consensus Estimate of 41 cents. However, the bottom line improved from the year-ago quarter’s 25 cents.
Total quarterly revenues of $5,905 million missed the Zacks Consensus Estimate of $6,059 million. However, the top line increased from the year-ago quarter’s $5,485 million.
The lower-than-expected quarterly results have primarily been driven by higher costs and expenses. The negatives were partially offset by higher contributions from the Oilfield Services and Equipment business unit.
Segmental Performance
Baker Hughes reorganized its company from four segments to two operating segments. Effective Oct 1, 2022, the two operating segments are Oilfield Services and Equipment (“OFSE”), and Industrial & Energy Technology (“IET”). The company merged the Oilfield Services segment with the Oilfield Equipment segment to form the OFSE segment, and combined the Turbomachinery & Process Solutions segment with the Digital Solutions segment to create the IET segment.
Revenues from the Oilfield Services and Equipment unit amounted to $3,579 million, up 12% from the year-ago quarter’s $3,185 million. Baker Hughes’ operating income from the segment was $416 million, up from $280 million reported in fourth-quarter 2021, backed by an increase in most product lines.
Revenues from the Industrial & Energy Technology unit amounted to $2,325 million, up 1% from the year-ago quarter’s $2,300 million. Baker Hughes’ operating income from the segment was $377 million, down from $397 million in fourth-quarter 2021 due to higher contributions from the Gas Technology-Equipment segment. This was partially offset by lower contributions from the Gas Technology-Services segment.
Costs and Expenses
Baker Hughes has recorded total costs and expenses of $5,242 million in the fourth quarter, up from the year-ago quarter’s $4,911 million.
Orders
Total orders of the company from all business segments in fourth-quarter 2022 amounted to $8,009 million, up 20% year over year due to higher order intakes from segments like Oilfield Services and Equipment, and Industrial & Energy Technology.
Free Cash Flow
Baker Hughes generated a free cash flow of $657 million in the reported quarter compared with $645 million in the year-ago period.
Capex & Balance Sheet
Baker Hughes’ net capital expenditure in the fourth quarter totaled $241 million.
As of Dec 31, 2022, Baker Hughes had cash and cash equivalents of $2,488 million. At the fourth-quarter end, the company had a long-term debt of $5,980 million, marking a debt-to-capitalization of 31.4%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -10.07% due to these changes.
VGM Scores
At this time, Baker Hughes has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Baker Hughes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Baker Hughes (BKR) Down 0.1% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Baker Hughes (BKR - Free Report) . Shares have lost about 0.1% in that time frame, outperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Baker Hughes Q4 Earnings & Revenue Miss Estimates
Baker Hughes reported fourth-quarter 2022 adjusted earnings of 38 cents per share, missing the Zacks Consensus Estimate of 41 cents. However, the bottom line improved from the year-ago quarter’s 25 cents.
Total quarterly revenues of $5,905 million missed the Zacks Consensus Estimate of $6,059 million. However, the top line increased from the year-ago quarter’s $5,485 million.
The lower-than-expected quarterly results have primarily been driven by higher costs and expenses. The negatives were partially offset by higher contributions from the Oilfield Services and Equipment business unit.
Segmental Performance
Baker Hughes reorganized its company from four segments to two operating segments. Effective Oct 1, 2022, the two operating segments are Oilfield Services and Equipment (“OFSE”), and Industrial & Energy Technology (“IET”). The company merged the Oilfield Services segment with the Oilfield Equipment segment to form the OFSE segment, and combined the Turbomachinery & Process Solutions segment with the Digital Solutions segment to create the IET segment.
Revenues from the Oilfield Services and Equipment unit amounted to $3,579 million, up 12% from the year-ago quarter’s $3,185 million. Baker Hughes’ operating income from the segment was $416 million, up from $280 million reported in fourth-quarter 2021, backed by an increase in most product lines.
Revenues from the Industrial & Energy Technology unit amounted to $2,325 million, up 1% from the year-ago quarter’s $2,300 million. Baker Hughes’ operating income from the segment was $377 million, down from $397 million in fourth-quarter 2021 due to higher contributions from the Gas Technology-Equipment segment. This was partially offset by lower contributions from the Gas Technology-Services segment.
Costs and Expenses
Baker Hughes has recorded total costs and expenses of $5,242 million in the fourth quarter, up from the year-ago quarter’s $4,911 million.
Orders
Total orders of the company from all business segments in fourth-quarter 2022 amounted to $8,009 million, up 20% year over year due to higher order intakes from segments like Oilfield Services and Equipment, and Industrial & Energy Technology.
Free Cash Flow
Baker Hughes generated a free cash flow of $657 million in the reported quarter compared with $645 million in the year-ago period.
Capex & Balance Sheet
Baker Hughes’ net capital expenditure in the fourth quarter totaled $241 million.
As of Dec 31, 2022, Baker Hughes had cash and cash equivalents of $2,488 million. At the fourth-quarter end, the company had a long-term debt of $5,980 million, marking a debt-to-capitalization of 31.4%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -10.07% due to these changes.
VGM Scores
At this time, Baker Hughes has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Baker Hughes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.