Baker Hughes Inc.
) reported first quarter 2013 adjusted earnings from continuing
operations of 65 cents a share, which beat the Zacks Consensus
Estimate of 62 cents aided by improved North America results.
However, the quarterly figure fell 24.4% from the year-ago
adjusted profit level of 86 cents a share.
The year-over-year decline stemmed mainly from seasonal weakness,
in particular the Europe/Africa/Russia/Caspian segment. Moreover,
weak activity in several important markets of Baker Hughes
resulted in an unfavorable mix.
Total revenue of $5,230 million fell 2.3% from the year-ago level
of $5,355 million. However, the top line surpassed the Zacks
Consensus Estimate of $5,172 million.
First Quarter Segmental Highlights
Of Baker Hughes' total quarterly revenue, North America,
Europe/Africa/Russia/Caspian, Middle East/Asia-Pacific and Latin
America accounted for 50%, 16%, 17% and 11%, respectively. The
remainder was generated by the Industrial Services segment.
An improvement in before-tax profit was noticed in the Middle
East/Asia-Pacific region, which recorded a profit before-tax
margin of 13% versus 10% in the year-ago quarter. The Industrial
Services segment margin remained unchanged at 8%.
All other segments registered lackluster pre-tax margins, with
North America coming in at 9% (compared with 14% in the
year-earlier quarter) and Latin America coming in at 8% (versus
12%). Pre-tax margins at Europe/Africa/Russia/Caspian segment
came in at 11% (versus 17% in the year-earlier quarter).
BAKER-HUGHES (BHI): Free Stock Analysis
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At the end of the first quarter, Baker Hughes had $1,101.0
million in cash and cash equivalents, while long-term debt was
$3,844.0 million, representing a debt-to-capitalization ratio of
18.1%. The company's capital expenditures were $490.0 million in
Baker Hughes, the world's third-largest oilfield services
), holds a Zacks Rank #3 (Hold) and is expected to perform in
line with the broader market over the next few months. However,
there are other better performing sector stocks, like Zacks
Range Resources Corporation
), that are likely to outperform the market.