Baker Hughes Inc. Earnings Cheat Sheet: Double-Digit Growth Again

S&P 500 (NYSE:SPY) component Baker Hughes Inc. (NYSE:BHI) reported higher profit for the third quarter as revenue showed growth. 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.

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Baker Hughes Earnings Cheat Sheet for the Third Quarter

Results: Net income for Baker Hughes Inc. rose to $706 million ($1.61 per share) vs. $255 million (59 cents per share) in the same quarter a year earlier. This is a more than twofold rise from the year earlier quarter.

Revenue: Rose 27% to $5.18 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: BHI reported adjusted net income of $1.18 per share. By that measure, the company fell short of mean estimate of $1.21 per share. Analysts were expecting revenue of $5.17 billion.

Quoting Management: Chad C. Deaton, Baker Hughes Chairman and Chief Executive Officer, said, “The third quarter was a record revenue quarter for Baker Hughes. In Canada, the rig count grew substantially throughout the quarter and our operational results reflected this growth. Strong growth continues across U.S. Land, and capacity across most of the market remains tight. The Gulf of Mexico improved marginally during the quarter as the pace of permitting modestly improved. We continue to position our organization to respond to gradual growth in the Gulf of Mexico over the medium term.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 62.1%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 82.7% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose more than threefold and in the first quarter, the figure rose more than twofold.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 2 cents, and in the first quarter, it was ahead by 9 cents.

Gross margins grew 2.3 percentage points to 24.1%. The growth seemed to be driven by increased revenue, as the figure rose 27% from the year earlier quarter while costs rose 23.3%.

Looking Forward: Expectations for the company’s next quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the fourth quarter has risen to $1.37 per share from $1.32. For the fiscal year, the average estimate has moved up from $4.28 a share to $4.37 over the last ninety days.

Competitors to Watch: National-Oilwell Varco, Inc. (NYSE:NOV), Weatherford Intl. Ltd. (NYSE:WFT), Newpark Resources, Inc. (NYSE:NR), Halliburton Company (NYSE:HAL), Flotek Industries, Inc. (NYSE:FTK), Oil States Intl., Inc. (NYSE:OIS), Schlumberger Limited. (NYSE:SLB), Bolt Technology Corp. (NASDAQ:BOLT), Cameron Intl. Corp. (NYSE:CAM), and Lufkin Industries, Inc. (NASDAQ:LUFK).

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(Source: Xignite Financials)