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What's in Store for Baker Hughes' (BKR) Earnings in Q4?

Zacks Equity Research
·3 min read

Baker Hughes Company BKR is set to report fourth-quarter 2022 results on Jan 23, before the opening bell.

In the last reported quarter, the oilfield service provider’s adjusted earnings of 26 cents per share beat the Zacks Consensus Estimate by a penny due to higher contributions from the Oilfield Services business unit.

In the trailing four quarters, Baker Hughes beat the Zacks Consensus Estimate once and missed the same thrice, the negative earnings surprise being 20.2%, 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 fourth-quarter earnings per share of 41 cents has witnessed one upward movement and no downward revision in the past 30 days. The consensus estimate suggests an increase of 64% from the year-ago reported number.

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The Zacks Consensus Estimate for the to-be-reported quarter’s revenues of $6.1 billion indicates a 9.8% improvement from the year-ago reported figure.

Factors to Consider

The West Texas Intermediate crude price was considerably higher in the fourth quarter of 2022. High oil prices were favorable for the exploration and production operations in the December-end quarter.

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 fourth quarter.

The Zacks Consensus Estimate for operating income from the company’s Oilfield Services is pegged at $384 million, suggesting a massive increase from $256 million in the December-end quarter of last year.

However, the Zacks Consensus Estimate for operating income from the company’s Digital Solutions segment is pegged at $36.2 million, suggesting a decline from $51 million in the fourth 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 -2.17%. 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:

Halliburton Company HAL currently has an Earnings ESP of +0.30% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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.

Schlumberger Limited SLB has an Earnings ESP of +1.46% and is currently a Zacks #3 Ranked player.

Schlumberger is scheduled to release fourth-quarter results on Jan 20. The Zacks Consensus Estimate for SLB’s earnings is pegged at 69 cents per share, suggesting an increase of 68.3% from the prior-year reported figure.

Valero Energy Corporation VLO has an Earnings ESP of +1.46% and is a Zacks #3 Ranked player at present.

Valero is scheduled to release fourth-quarter results on Jan 26. The Zacks Consensus Estimate for VLO’s earnings is pegged at $7 per share, suggesting a massive improvement from the prior-year reported figure.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Schlumberger Limited (SLB) : Free Stock Analysis Report

Halliburton Company (HAL) : Free Stock Analysis Report

Valero Energy Corporation (VLO) : Free Stock Analysis Report

Baker Hughes Company (BKR) : Free Stock Analysis Report

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Zacks Investment Research