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What's in the Offing for Baker Hughes' (BKR) Q3 Earnings?

Zacks Equity Research
·4 min read

Baker Hughes Company BKR is set to report third-quarter 2022 results on Oct 19, before the opening bell.

In the last reported quarter, the oilfield service provider’s adjusted earnings of 11 cents per share missed the Zacks Consensus Estimate of 22 cents due to a decline in cost productivity and inflation pressures in Digital Solutions. The negatives were partially offset by higher contributions from the Oilfield Services business unit.

Baker Hughes missed the Zacks Consensus Estimate in each of the trailing four quarters, the negative earnings surprise being 28%, on average. This is depicted in the graph below:

Baker Hughes Company Price and EPS Surprise

 

Baker Hughes Company Price and EPS Surprise
Baker Hughes Company Price and EPS Surprise

Baker Hughes Company price-eps-surprise | Baker Hughes Company Quote

Estimate Trend

The Zacks Consensus Estimate for third-quarter earnings per share of 25 cents has witnessed no upward movement and five downward revisions in the past 30 days. The consensus estimate suggests an increase of 56.3% from the year-ago reported number.

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The Zacks Consensus Estimate for the to-be-reported quarter’s revenues of $5.5 billion indicates a 7.1% improvement from the year-ago reported figure.

Factors to Consider

The West Texas Intermediate crude price was considerably higher in the third quarter of this year. High oil prices were favorable for the exploration and production operations in the September-end quarter. The count of rigs in oil resources was considerably higher year over year, confirming heightened upstream activities.

With higher exploration operations, the demand for oilfield services was promising since oilfield service firms help upstream companies efficiently set up oil wells. Thus, the higher oil price is likely to have aided Baker Hughes’ oilfield service business in the third quarter. The Zacks Consensus Estimate for operating income from the company’s Oilfield Services is pegged at $295 million, suggesting a massive increase from $190 million in the September-end quarter of last year.

However, the Zacks Consensus Estimate for operating income from the company’s Turbomachinery & Process Solutions segment is pegged at $250 million, suggesting a decline from $278 million in the third quarter of 2021. This might have affected the company’s earnings in the to-be-reported quarter.

Earnings Whispers

Our proven model does not indicate an earnings beat for Baker Hughes this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. But that is not the case here.

Earnings ESP: Baker Hughes has an Earnings ESP of -0.99%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Baker Hughes currently carries a Zacks Rank #3.

Stocks to Consider

Here are some firms that you may want to consider, as these have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Schlumberger Limited SLB has an Earnings ESP of +0.23% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.

Schlumberger is scheduled to release third-quarter results on Oct 21. The Zacks Consensus Estimate for SLB’s earnings is pegged at 55 cents per share, suggesting an increase of 52.8% from the prior-year reported figure.

Liberty Energy LBRT has an Earnings ESP of +5.58% and a Zacks Rank of 1.

Liberty Energy is scheduled to report third-quarter results on Oct 19. The Zacks Consensus Estimate for LBRT’s earnings is pegged at 63 cents per share, suggesting a significant increase from the prior-year reported figure.

Halliburton Company HAL has an Earnings ESP of +1.54% and a Zacks Rank #2.

Halliburton is scheduled to release third-quarter earnings on Oct 25. The Zacks Consensus Estimate for HAL’s earnings is pegged at 56 cents per share, suggesting a 100% increase from the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Schlumberger Limited (SLB) : Free Stock Analysis Report
 
Halliburton Company (HAL) : Free Stock Analysis Report
 
Baker Hughes Company (BKR) : Free Stock Analysis Report
 
Liberty Energy Inc. (LBRT) : Free Stock Analysis Report
 
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