Baker Hughes Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Baker Hughes (NYSE:BHI) will unveil its latest earnings tomorrow, Wednesday, January 23, 2013. Baker Hughes provides products and services for the drilling and evaluation of oil and gas wells as well as fluids and chemicals and reservoir technology.

Baker Hughes Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 62 cents per share, a decline of 49.2% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 93 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 75 cents during the last month. For the year, analysts are projecting profit of $3.21 per share, a decline of 23.6% from last year.

Past Earnings Performance: The company missed estimates last quarter after beating forecasts in the prior two. In the third quarter, the company reported net income of 73 cents per share versus a mean estimate of profit of 84 cents per share. In the second quarter, the company beat estimates by 22 cents.

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A Look Back: In the third quarter, profit fell 60.5% to $279 million (63 cents a share) from $706 million ($1.61 a share) the year earlier, missing analyst expectations. Revenue rose 1% to $5.23 billion from $5.18 billion.

Here’s how Baker Hughes traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

BHI

Wall St. Revenue Expectations: Analysts predict a decline of 3.3% in revenue from the year-earlier quarter to $5.21 billion.

Analyst Ratings: There are mostly holds on the stock with 15 of 26 analysts surveyed giving that rating.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 21.8% in the fourth quarter of the last fiscal year, 18.3% in the first quarter and 12.3% in the second quarter before increasing again in the third quarter.

The company is hoping to rebound with this earnings release after a net income drop last quarter. Net income rose 29.9% in the second quarter before dropping in the third quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.49 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company improved this liquidity measure from 2.47 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 8% to $11.28 billion while liabilities rose by 7% to $4.53 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)