Baker Hughes Inc.
 (BHI)

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  • Dec. 10, 2015, 3:42 PM
    • Citigroup analysts expect a nearly 20% drop in spending by E&P companies, which would be bad news for offshore drillers such as Transocean (RIG +1.4%) and National Oilwell Varco (NOV +0.1%), as domestic capex will remain driven by trailing commodity prices and capital raises.
    • The firm prefers Halliburton (HAL +0.5%), along with Baker Hughes (BHI -1.5%), and Schlumberger (SLB -0.1%) on franchise quality, exposure to onshore growth longer term and valuations which discount an inability to generate excess returns; it rates all three stocks as Buys.
    • At the same time, Citi remains cautious on the offshore levered companies, especially Sell-rated NOV, given downside risk to EPS estimates, and Sell-rated RIG, given displacement risk and debt maturities.
    | Dec. 10, 2015, 3:42 PM | 11 Comments
  • Dec. 10, 2015, 5:06 AM
    • Halliburton's (NYSE:HAL) proposed $35B acquisition of rival Baker Hughes (NYSE:BHI) will likely close in 2016 instead of this year as talks with U.S. regulators continue, Halliburton CFO Christian Garcia told a Wells Fargo Energy Symposium.
    • Both companies have already agreed to divest $5.2B in overlapping businesses to quell concerns that the merger, which would create the second-largest oilfield services company, would lead to higher prices and less innovation.
    | Dec. 10, 2015, 5:06 AM
  • Dec. 9, 2015, 3:37 PM
    • GE would best satisfy the desire by regulators in both the U.S. and EU for a third provider of integrated oil services contracts," says Seeking Alpha contributor Chris DeMuth, responding to a report the company is near a deal to purchase Halliburton's (HAL +5.2%) drill bits and drilling services divisions.
    • A potential deal, he says, means a good chance of Halliburton being spared a massive breakup fee, and then being able to realize the significant cost savings of a merger with Baker Hughes (BHI +7.3%).
    | Dec. 9, 2015, 3:37 PM | 9 Comments
  • Dec. 9, 2015, 2:59 PM
    • Halliburton (HAL +4.5%) and Baker Hughes (BHI +6.9%) remain higher after Bloomberg reports that GE (GE +0.8%) is in advanced talks to buy HAL's drill bits and drilling services divisions (earlier).
    • Selling both businesses could have fetched as much as $5B combined earlier this year when the units were put on the block, but it is not clear how much the decline in oil prices may have affected their respective market values.
    • GE also is exploring bids for other assets that HAL is seeking to unload, including parts of BHI’s completions operations, according to the report.
    • While the timeline for closing the merger already has been pushed out to Dec. 15 at the earliest, HAL's acting CFO Christian Garcia says he sees a strong likelihood the deal does not close until sometime in 2016.
    | Dec. 9, 2015, 2:59 PM | 5 Comments
  • Dec. 8, 2015, 3:18 PM
    • It's been a rough run for value stocks over the past few years, but the metric used to determine value - price/book - may not be the right one, says Citi's Robert Buckland. Free-cash-flow yield is better, he argues. noting this metric tracked traditional value in the 1990s and 2000s, but has easily outperformed over the past decade.
    • It's a sign of the times, he says, as FCF is a "capex-suspicious metric," and investors are concerned about the economic outlook, and cynical about capital allocation decisions of managements.
    • The list of 28 U.S. value (as defined by FCF yield) plays: BHI, VIAB, WFM, ANTM, HPQ, ABC, LBTYA, M, AAPL, CTL, XRX, LYB, CMI, ETN, MRK, VLO, CSCO, WRK, IBM, LVS, ESRX, IP, CAH, ADM, INTC, CAT, ABBV, EMN
    | Dec. 8, 2015, 3:18 PM | 48 Comments
  • Dec. 3, 2015, 3:33 PM
    • Baker Hughes (BHI -2.8%) is upgraded to Speculative Buy from Accumulate at Seaport Global on the belief the merger with Halliburton (HAL -3.3%) is a 90% probability, but shares are down anyway as energy companies trade broadly lower.
    • The firm says recent news related to the merger indicates the deal continues to progress toward a likely close in late January 2016, while its conversations with HAL indicate that the company to wrap up asset sales before year-end.
    • Seaport believes GE is the most likely buyer of the assets, since GE is increasing its energy focus and it has indicated the likelihood of further acquisitions.
    | Dec. 3, 2015, 3:33 PM | 12 Comments
  • Nov. 27, 2015, 12:34 PM
    • Halliburton (HAL -0.4%) refiles a request for European Union antitrust approval of its takeover bid for Baker Hughes (BHI +0.3%), four months after the EU rejected an earlier application because of insufficient data.
    • The European Commission reportedly will decide by Jan. 12 whether to clear the deal or open a full investigation.
    • U.S. antitrust regulators also also looking at the deal, while Canada, Kazakhstan, South Africa and Turkey have approved; Australia's antitrust agency raised concerns last month and will issue its decision on Dec. 17.
    | Nov. 27, 2015, 12:34 PM | 3 Comments
  • Nov. 24, 2015, 5:26 PM
    • Susquehanna analysts suspect that international oil exploration will be even weaker than expected, prompting them to reduce estimates for oil services companies Halliburton (NYSE:HAL), Schlumberger (NYSE:SLB), Weatherford International (NYSE:WFT) and Baker Hughes (NYSE:BHI).
    • The firm expects activity levels to steadily drift lower in 2016, as national oil companies and international companies slow spending in order to manage cash flows; NOCs generally operate on annual budgets that are not typically subject to much revision, so the larger international operators will be looking for a sustained move higher in oil prices before ramping up spending and activity levels, Susquehanna says.
    • The firm's 2016 EPS forecast for SLB slips to $2.50 from $2.78, for WFT falls to a loss of $0.60 from a loss of $0.51, for BHI to a loss of $0.17 from a loss of $0.16, and for HAL to $1.16 from $1.17.
    | Nov. 24, 2015, 5:26 PM | 5 Comments
  • Nov. 24, 2015, 10:30 AM
    • Halliburton (HAL +1.8%) will do “whatever is necessary" to win antitrust approval to buy Baker Hughes (BHI +1.1%), including selling additional assets to satisfy regulators, according to ValueAct Capital Management, which owns stakes in both companies.
    • Bloomberg reports the activist fund said in a letter to its investors that, after discussions with the two oil field services companies, it is confident the deal is on track and will close.
    • The letter may help ease concerns about the deal’s prospects among investors, who have grown increasingly worried that the tie-up could be in trouble with regulators.
    | Nov. 24, 2015, 10:30 AM | 3 Comments
  • Nov. 6, 2015, 5:30 PM
    • Oilfield service companies are in "survival mode," looking to cut costs large and small - from thousands of job cuts to capacity reductions to changing paint colors - WSJ reports.
    • Example: Technip (OTCQX:TNHPF) is cutting 6K jobs and using white paint instead of yellow on underwater equipment because adding pigment is more expensive.
    • The oil downturn has left even the world's biggest oil services company, Schlumberger (NYSE:SLB), vulnerable; in its Q3 results, the company reported big drops in earnings and revenue.
    • Next year could be even worse as producers cut more than $200B in spending this year and next; consult Wood Mackenzie expects only 10 new projects globally to attract investment commitments, which would hit a sector that typically has the capacity to support an average of 40-50 new projects a year.
    • Other relevant tickers include: HAL, BHI, CAM, WFT, AMFW, XLE, OIH, XES, IEZ
    | Nov. 6, 2015, 5:30 PM | 5 Comments
  • Nov. 6, 2015, 9:58 AM
    • Halliburton (HAL -0.9%) is pushing ahead with plans to sell $7.5B in bonds to finance its $34.6B takeover of Baker Hughes (BHI -1.3%), shrugging off concerns about potential regulatory hurdles.
    • HAL says the offering will be issued in five tranches, with a maximum 5% fixed rate for a 30-year note maturing Nov. 15, 2045.
    • "They are highly rated and a mega-deal, both of which make them attractive in this environment," says a corporate credit analyst at Janney Montgomery Scott.
    • The offering comes shortly after an analyst at Jefferies expressed less confidence in the likelihood that HAL would complete the takeover.
    | Nov. 6, 2015, 9:58 AM | 5 Comments
  • Nov. 4, 2015, 11:48 AM
    • Baker Hughes (BHI -4.1%) plunges after Jefferies says it has less confidence of a successful close to Halliburton's (HAL -2.1%) proposed acquisition of the company, as EU regulators are beginning to "ask a lot of questions" about the proposed deal, which could indicate concerns that the deal would reduce competition at the upper end of the energy services market.
    • Jefferies' Brad Handler says BHI shares would fall 25%-30% if the deal falls throughm but HAL would face limited downside risk; the analyst cuts his price target on BHI to $62 from $68 but keeps a Buy rating, while keeping a $47 price target and Buy rating on HAL.
    | Nov. 4, 2015, 11:48 AM | 10 Comments
  • Oct. 23, 2015, 3:12 AM
    • Australia's antitrust regulator is raising more concerns about Halliburton's (NYSE:HAL) proposed buyout of Baker Hughes (NYSE:BHI), in another setback for a deal that has already been hit with competition issues in the U.S.
    • Delaying its final ruling for a third time, the Australian Competition and Consumer Commission said the $34.6B takeover may "result in the merged entity being one of only a small number of suppliers that could service the relevant markets."
    • The regulator will give a final ruling on Dec. 17.
    | Oct. 23, 2015, 3:12 AM | 3 Comments
  • Oct. 22, 2015, 12:58 PM
    • Baker Hughes (BHI +2.7%) is upgraded to Buy from Hold with a $78 price target at Argus, which says currently undervalued shares offer an inexpensive way to gain exposure to the new post-merger Halliburton (HAL +3.8%).
    • Argus says the current implied takeover price is $62 per BHI share, based on the initial offer of 1.12 HAL shares plus $19 in cash for each share of BHI; as such, if the merger were completed today, BHI investors would net ~$7.60/share.
    • The firm also notes HAL's strong incentive to make any necessary divestitures, as it would have to pay BHI a $3.5B breakup fee if the deal falls through.
    • UBS reiterates its Buy rating and $70 price target for BHI following better than expected Q3 earnings.
    | Oct. 22, 2015, 12:58 PM | 4 Comments
  • Oct. 22, 2015, 12:26 PM
    • Weatherford International (WFT +10.6%) will not try to buy assets divested by Halliburton (HAL +3.3%) and Baker Hughes (BHI +2.6%), CEO Bernard Duroc-Danner said in its earnings conference call today, putting to rest questions about its involvement in the bidding process.
    • The CEO said WFT was interested in HAL’s Sperry Drilling business, which has been placed on the market as HAL and Baker Hughes seek regulatory approval for their $35B merger, but that while WFT believed that the economics of Sperry were strong, the company “could not get over the cost of capital."
    • Instead of chasing divested assets, Duroc-Danner said WFT will continue to focus on making the business more efficient and focusing on its strengths.
    • HAL said Monday it was making progress on marketing assets it has targeted for sale, and has entered the negotiation phase for the first slate of announced divestitures, including Sperry Drilling.
    | Oct. 22, 2015, 12:26 PM
  • Oct. 21, 2015, 5:02 PM
    • Baker Hughes (NYSE:BHI) declares $0.17/share quarterly dividend, in line with previous.
    • Forward yield 1.25%
    • Payable Dec. 24; for shareholders of record Dec. 3; ex-div Dec. 1.
    | Oct. 21, 2015, 5:02 PM | 1 Comment
Company Description
Baker Hughes Inc operates in the oilfield services industry. It provides products and services for drilling and evaluation of oil and gas wells, completion and production of oil and gas wells, fluids and chemicals and reservoir technology.