Baker Hughes Posts 75% Drop in Q2 EPS

Texan drilling company Baker Hughes reported Q2 profit of $349.6 million ($1.09/share), down from $1.40 billion ($4.14) in the year-ago quarter when the company recognized a $1.04 billion gain on an asset sale. Analysts were expecting EPS of $1.09. Factoring out the sale of its interest in WesternGeco, last year's Q2 earnings were $359.8 million ($1.07/share). Q2 2007 revenue was up 15% to $2.54 billion from $2.20 billion in the year-ago quarter. The company's shares fell 5.8% on July 13 after it warned quarterly profit would likely come in at $1.07-1.09 a share, $0.10-0.12 below Street expectations at the time. The company has authorized a buyback of up to $1 billion of its common shares in addition to an existing authorization to repurchase $1.21 billion of common stock. Baker Hughes was hit in April by an eight-year low in Canadian drilling. "Canada's hurt everyone," said Argus Research analyst David Rewcastle, who rates Baker Hughes shares "buy."

Sources: Press release, MarketWatch, Bloomberg
Commentary: Baker Hughes Drops On Q2 Earnings Warning • Baker Hughes CEO To Investors: 'Keep the Faith'
Stocks/ETFs to watch: BHI. Competitors: HAL, SLB, SII. ETFs: OIH, IEZ, RYE

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