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Baker Hughes Q3 Loss Narrower than Expected, Revenues Lag

Baker Hughes Inc.BHI reported third-quarter 2015 adjusted loss from continuing operations of 5 cents a share, which came better than the Zacks Consensus Estimate of 15 cents loss per share. The quarterly figure however deteriorated from the year-ago adjusted profit level of $1.02 a share.

The year-over-year decline stemmed from weakness in pricing, ongoing weakness in the U.S. onshore market, an unfavorable mix in the Gulf of Mexico and lower revenues.

Total revenue of $3,786 million declined from the year-ago level of $6,250 million and also missed the Zacks Consensus Estimate of $3,794 million.

Baker Hughes Inc. - Earnings Surprise | FindTheBest

Third-Quarter Segmental Highlights

Of Baker Hughes' total quarterly revenue, North America, Europe/Africa/Russia/Caspian, Middle East/Asia-Pacific and Latin America accounted for 36%, 21%, 22% and 12%, respectively. The remainder was generated by the Industrial Services segment.

With respect to margins, North America recorded a loss before-tax margin of 12.4% (compared with profit before-tax margin of 12.0% in the year-earlier quarter) and the Industrial Services segment registered a pretax margin of 11.8% (versus 10.5%). Pretax margins at Europe/Africa/Russia/Caspian segment came in at 11.4% (versus 8.2% in the year-earlier quarter) and Middle East/Asia-Pacific region margin was 8.1% (versus 14.4%). Finally, Latin America registered pretax margin of 10.9% (versus 12.4% a year ago).

Liquidity

At the end of the third quarter, Baker Hughes had $2,043.0 million in cash and cash equivalents, while long-term debt was $3,896.0 million. In the reported quarter, capital expenditures totaled $178 million, down $80 million or 31% sequentially, and down $247 million or 58% from the third quarter of 2014. Depreciation and amortization expense was $432 million, relatively flat sequentially and down 5% from the prior-year quarter.

Zacks Rank & Other Stocks

Currently, Baker Hughes carries a Zacks Rank #4 (Sell). Some better-ranked stocks from the same space are Matrix Service Company MTRX , Natural Gas Services Group Inc. NGS and McDermott International Inc. MDR . While Matrix and Natural Gas Services sport a Zacks Rank #1 (Strong Buy), McDermott holds a Zacks Rank #2 (Buy).

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BAKER-HUGHES (BHI): Free Stock Analysis Report

MATRIX SERVICE (MTRX): Free Stock Analysis Report

MCDERMOTT INTL (MDR): Free Stock Analysis Report

NATURAL GAS SVC (NGS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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