Baker Hughes Increases Sales but Misses Estimates on Earnings

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Baker Hughes (NYS: BHI) reported earnings Jan. 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Baker Hughes missed slightly on revenues and missed on earnings per share.

Compared to the prior-year quarter, revenue improved significantly, and earnings per share contracted.

Gross margins increased, operating margins grew, net margins dropped.

Revenue details
Baker Hughes notched revenue of $5.4 billion. The 20 analysts polled by S&P Capital IQ hoped for revenue of $5.5 billion. Sales were 22% higher than the prior-year quarter's $4.4 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $1.22. The 28 earnings estimates compiled by S&P Capital IQ anticipated $1.32 per share on the same basis. GAAP EPS of $0.72 for Q4 were 7.1% lower than the prior-year quarter's $0.77 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 23.6%, 90 basis points better than the prior-year quarter. Operating margin was 15.6%, 160 basis points better than the prior-year quarter. Net margin was 5.8%, 180 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $5.5 billion. On the bottom line, the average EPS estimate is $1.30.

Next year's average estimate for revenue is $22.9 billion. The average EPS estimate is $5.52.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,132 members out of 1,177 rating the stock outperform, and 45 members rating it underperform. Among 371 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 363 give Baker Hughes a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Baker Hughes is outperform, with an average price target of $75.58.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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