We are upgrading our recommendation on Baker Hughes Inc. to
Outperform from Neutral. In the second quarter, both revenue and
earnings increased on an annual basis. The growth stemmed mainly
from the rising sale of newly introduced well construction &
production technologies, as well as increased onshore and offshore
activities in the U.S. Furthermore, improved demand for high
technology services in Africa, the Middle East and Asia Pacific
aided the performance, along with increased activities in the Gulf
of Mexico (GoM). Baker Hughes, one of the major oilfield service
companies in the world, appears to be focusing on the international
and offshore markets for near-term growth.
Houston, TX-based Baker Hughes Inc. (BHI) is one of the major
oilfield service companies in the world, providing a range of
services to the global oil and gas industry. The company is a major
supplier of wellbore-related products and technology services and
systems. It caters to drilling, pressure pumping, formation
evaluation, completion and production, and reservoir technology. It
also offers consulting services to the worldwide oil and natural
The company is dynamic in plugging holes in its product line-up
through bolt-on acquisitions. Among the diversified oilfield
service players, Baker Hughes remains one of the best positioned,
with significant improvement in activity levels recorded in both
North America and international regions.
On Apr 28, 2010, Baker Hughes acquired 100% of the outstanding
common stock of BJ Services Company in a cash and stock transaction
valued at $6,897 million. BJ Services is a leading provider of
pressure pumping and other oilfield services and would expand the
portfolio of Baker Hughes'.
The company previously operated through two segments: Completion
and Production as well as Drilling and Evaluation. Following the BJ
Services merger, the company started reporting under five segments
based on its geographical spread. These segments are North America
(Canada, U.S., and Trinidad), Latin America (Central and South
America including Mexico and excluding Trinidad),
Europe/Africa/Russia Caspian or EARC (Europe, Africa excluding
Egypt, and Russia and the republics of the former Soviet Union),
Middle East/Asia-Pacific or MEAP (including Egypt), Industrial and
Others (downstream chemicals, process and pipeline services, and
reservoir and technology consulting businesses). North America,
EARC, MEAP, Latin America, and Industrial and Other segments
accounted for 52 %, 17%, 16%, 11% and 4%, respectively, of the
total revenue in 2012.
Baker Hughes Incorporated (BHI): Read the Full
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