Baker Hughes, a GE Company: Will 1Q18 Earnings Decline?
Baker Hughes’s 1Q18 earnings estimates
In 1Q18, analysts expect $0.06 in adjusted earnings per share (or EPS) for Baker Hughes, a GE Company (BHGE). So Street analysts expect BHGE’s adjusted earnings to decline sharply, by 58% from the 4Q17 adjusted earnings of $0.15 per share. Low upstream energy activity and challenging pricing in the subsea business, a muted Turbomachinery segment due to lower LNG (liquefied natural gas) activity, a lower-margin downstream backlog, and decreased transaction services in the oilfield equipment segment are all expected to result in the 1Q18 earnings decline. BHGE plans to hold its 1Q18 earnings conference call on April 20.
In 4Q17, Baker Hughes’s earnings switched to a $0.15 adjusted profit from a $0.30 adjusted loss in 4Q16. Strong growth in completions activity, artificial lift and drilling services, and increased volume in BHGE’s North America, the Middle East, and Latin America operations resulted in improved earnings in 4Q17.
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Analysts’ estimates for BHGE’s peers
Wall Street analysts expect Nabors Industries (NBR) to cut its 1Q18 adjusted loss to $0.28 per share from $0.34 per share in 4Q17. Analysts expect Core Laboratories’ (CLB) 1Q18 adjusted earnings to decline marginally to $0.57 from its 4Q17 earnings of $0.58. TechnipFMC’s (FTI) 1Q18 adjusted earnings are expected to improve to $0.33, compared to its adjusted 4Q17 earnings of $0.20.
BHGE’s 1Q18 revenues estimates
In 1Q18, Wall Street analysts expect Baker Hughes’s revenues to decrease 6% from 4Q17. In 1Q18, BHGE is expected to generate $5.42 billion in revenues. Baker Hughes, a GE Company, is 5.8% of the iShares US Oil Equipment & Services ETF (IEZ). IEZ tracks an index of US equities in the oil equipment and services sector. IEZ decreased 13% in the past year, versus a 22% fall in BHGE’s stock price during the period.
Next in this series, we’ll discuss Baker Hughes, a GE Company’s, revenue and earnings in 4Q17.