Yahoo Finance Baker Hughes (BKR) Misses on Q4 Earnings, Reorganizes Segments
Baker Hughes Company BKR has 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.
Baker Hughes Company Price, Consensus and EPS Surprise
Baker Hughes Company price-consensus-eps-surprise-chart | Baker Hughes Company Quote
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%.
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Baker Hughes has been investing in energy transition and industrial initiatives. It expects to return 60-80% of free cash flow to shareholders.
Zacks Rank & Stocks to Consider
Baker Hughes currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Viper Energy Partners LP VNOM is a variable distribution master limited partnership. VNOM currently has an Earnings ESP of +17.82%.
Viper Energy is scheduled to release fourth-quarter earnings on Feb 21. The Zacks Consensus Estimate for VNOM’s earnings is pegged at 29 cents per share, suggesting a decline from the prior-year reported figure.
Halliburton Company HAL is one of the largest oilfield service providers in the world. HAL currently has an Earnings ESP of +0.30%.
Halliburton is scheduled to release fourth-quarter earnings on Jan 24. The Zacks Consensus Estimate for HAL’s earnings is pegged at 67 cents per share, suggesting a massive increase from the prior-year reported figure.
PBF Energy Inc. PBF, based in New Jersey, is a leading refiner of crude. PBF currently has an Earnings ESP of +2.95%.
PBF Energy is scheduled to release fourth-quarter earnings on Feb 16. The Zacks Consensus Estimate for PBF’s earnings is pegged at $4.76 per share, suggesting a massive increase from the prior-year reported figure.
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