Baker Hughes Inc.NYSE
Wed, Oct. 19, 8:21 AM
- Halliburton (NYSE:HAL) +0.9% premarket after posting a surprise Q3 profit, as it begins to win back business from oil producers that are beginning to ramp up operations.
- HAL says sales in its primary North American market gained 9% Q/Q to $1.66B, its first North American sales boost since the downturn began in late 2014, and operating results rose by $58M, which represents 41% incremental margins; CEO Dave Lesar cites improving rig count growth and “relentlessly managing costs."
- HAL's sales in the U.S. and Canada had plunged by more than two-thirds during the downturn as customers cut spending; despite the Q/Q improvement, Q3 North American sales still were 33% lower than ay ear ago.
- Lesar, who has talked about a turnaround on the horizon, says HAL is cautious about Q4 activity due to holiday and seasonal weather-related downtimes, but "it does not change our view that things are getting better for us and our customers.”
- Schlumberger (NYSE:SLB) is scheduled to report earnings on Thursday, and Baker Hughes (NYSE:BHI) is expected to report next Tuesday.
Tue, Oct. 11, 12:49 PM
- Norwegian oil service workers have ended a three-week strike that halted operations on 17 drilling rigs after the Industri Energi union won its pay demands with employers.
- The strike at subcontractors to the oil industry included workers at Schlumberger (SLB -0.9%), Halliburton (HAL -1.4%), Baker Hughes (BHI -0.9%) and Oceaneering (OII -0.8%).
- An extended strike had threatened closure of Statoil's (STO -2.1%) Melkoeya liquefied natural gas plant and Royal Dutch Shell's (RDS.A, RDS.B) Nyhamna gas processing plant.
Wed, Sep. 28, 3:19 PM
- The energy sector (XLE +4%) bursts to the top of the leaderboard after OPEC announces a planned production cut to 32.5M bbl/day at the informal OPEC meeting in Algiers.
- Among individual energy stocks: XOM +3.8%, CVX +2.7%, RDS.A +2.8%, BP +3.4%, TOT +2.4%, PBR +4.5%, COP +6.4%, MRO +8%, MPC +1.4%, PSX +1.9%, VLO -0.1%, EOG +6.2%, PXD +6.4%, OXY +4.5%, DVN +7.9%, CLR +8.3%, APA +6.2%, NOV +8.1%, SLB +3.3%, BHI +3.6%, HAL +4.3%, KMI +3.4%, ENB +2.6%, EPD +1.9%, ETP +2.9%.
Wed, Sep. 21, 10:21 AM
- More than 300 Norwegian oil service workers are on strike after wage talks broke down, hitting operations of subcontractors to the country's oil and gas industry including Schlumberger (SLB +1%), Halliburton (HAL +2.3%), Baker Hughes (BHI +2%) and Oceaneering (OII +1.5%).
- The conflict will force oil companies to halt drilling of some wells on Norway's continental shelf and later could cut into the country's production of ~2M bbl/day of oil, condensate and natural gas liquids; state-controlled Statoil (STO +0.8%) is Norway's largest oil firm.
- Brent crude recently was 1.6% higher at $46.58/bbl and WTI had jumped 2.1% to $45, sparked by the strike and API data showing a surprise drop in U.S. crude inventories.
- ETFs: USO, OIL, UWTI, UCO, DWTI, SCO, BNO, DBO, DTO, USL, DNO, OLO, SZO, OLEM
Wed, Sep. 7, 2:34 PM
- Baker Hughes (BHI -0.3%) Chairman and CEO Martin Craighead says in a presentation at the Barclays CEO Energy-Power Conference that the company believes sustainable oil prices in the upper $50s/bbl are needed for a recovery in North America.
- Craighead says BHI remains optimistic on the long-term outlook for its industry, although current North America activity growth is limited to core acreage, and the oil price recovery is being "dampened by shale producers' ability to quickly ramp up production."
- BHI also expects it will exceed its $500M cost reduction target for 2016 amid progress on its North America land pressure pumping plans, and says it is "building a steady pipeline of revenue growth" through new sales channels, some of which it sees "materializing as early as Q1 2017."
Wed, Sep. 7, 3:03 AM
- Don't expect too much out of Q3 oil services results, Credit Suisse says. "While an impressive move off the bottom, the U.S. horizontal rig count is still only 31% of its 2014 average. Not going down anymore is fabulous. But it doesn’t translate into doing well very quickly."
- Still, CS says investors should be more aggressive in buying stocks that miss earnings estimates.
- Firm notes that the focus on efficiency continues. "Sand has replaced land rigs as the under-utilized fixed-cost-base leveraged play on the recovery." Recommends SLCA and HCLP.
- Says that technology and a more efficient client base makes HAL the top “demographic” play over SLB in the near term.
- "BHI and WFT are self-help stories in different stages of improvement, but both have reasons to be in energy portfolios. Manufacturing is challenged with its focus on deepwater, which drives FET as our top pick in the group."
Thu, Jul. 28, 5:37 PM
Thu, Jul. 28, 2:47 PM
- Baker Hughes (BHI +2.6%) is higher despite posting a wider than expected Q2 loss on 39% less revenue Y/Y, as the company says it expects margins to improve across its businesses due to recent job cuts and other restructuring actions.
- Capital One analyst Luke Lemoine was positive on the results, saying BHI's Q2 "clean" EBITDA came in at ~$61M, close to expectations of $65M, $500M in cost-cutting is on track, and that the company repurchased $500M in shares in the quarter, a third of its buyback program.
- However, CEO Martin Craighead is less optimistic about Q2 than rivals Schlumberger (SLB -1%) and Halliburton (HAL -0.2%), saying he does not expect a substantial recovery in drilling and pricing in North America this year and that oil prices "in the upper $50s at a minimum are required for a sustainable recovery."
- BHI cut ~3K jobs in quarter, after eliminating 2K in Q1 and 18K last year.
Thu, Jul. 28, 7:11 AM
Wed, Jul. 27, 5:30 PM
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Wed, Jul. 20, 7:57 AM
- Halliburton (NYSE:HAL) CEO Dave Lesar says the U.S. rig count bottomed out during Q2, and he expects to see a modest uptick during H2: "We believe the North America market has turned. With our growth in market share during the downturn, we believe we are best-positioned to benefit from any recovery, including a modest one."
- HAL +0.7% premarket after reporting a lighter than expected Q2 loss on revenues of $3.84B, down 35% Y/Y, but North American revenues fell 15% while the continent’s rig count fell by a steeper 23%; HAL, which derives ~40% of its revenue from North America, is more exposed to the region than rivals Schlumberger (NYSE:SLB) and Baker Hughes (NYSE:BHI).
- The U.S. rig count "reached a landing point" during Q2 after falling 78% from the November 2014 peak, improving by 26 over the past several weeks, "reflecting operator confidence in stabilizing commodity prices."
- HAL booked $3.52B of costs related to terminating the Baker Hughes merger, as well as $423M of other impairments and charges during the quarter; HAL's unadjusted Q2 net loss was $3.21B, or $3.73/share, vs. a profit of $54M, or $0.06/share, in the year-ago quarter.
- "The outlook was the most important thing," Edward Jones analyst Rob Desai says, since Q2 expectations for HAL were so low.
Mon, Jul. 11, 11:19 AM
- Baker Hughes (BHI +1.1%) is upgraded to Hold from Underperform with a $41 price target, raised from $38, at Jefferies, which says demand growth in U.S. completions through the recovery is "likely to be powerful and is not fully reflected in shares."
- Jefferies also believes that "downside risk to near term estimates, in large measure a function of a delay in effecting cost savings, may be anticipated by shareholders, and in any event is not likely to have a large impact on shares given the downturn and the potential to cut costs" in H2 2016.
Fri, Jun. 10, 5:36 PM
Mon, Jun. 6, 3:39 PM
- Weatherford (WFT +8.3%) is upgraded to Overweight from Equal Weight with an $8 price target, raised from $7, at Barclays following last week's $1.1B convertible debt issue and the settling of the Zubair change order claim for $150M meaningfully shifted the narrative away from the balance sheet, removing considerable downside risk.
- "With near-term liquidity issues resolved, shares of WFT should start to recapture substantial YTD underperformance as focus starts so shift towards potential recovery amid low expectations," Barclays writes.
- However, the firm says WFT remains challenged with a highly levered balance sheet and a weaker operational position vs. the big three oil services companies, as it does not possess the scale in either North America or internationally to compete in markets that are becoming increasingly integrated.
- Oil service (OIH +6.2%) peers also are posting strong gains: SLB +4.5%, HAL +4.6%, BHI +6.8%.
Sat, Jun. 4, 9:05 AM
- Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI) are downgraded at Moody's, roughly a month after their planned merger fell apart due to U.S. and European antitrust concerns.
- Their senior unsecured credit ratings were dropped from A2 to Baa1, which reflects moderate credit risks and an uncertain business environment.
- Debt incurred to finance its failed bid to acquire Baker Hughes together with the negative impact on profitability and cash flow of the very weak oilfield services environment have eroded Halliburton’s credit metrics to levels which no longer support its A2 rating,” Moody’s writes on HAL.
- The failed deal also was cited in the BHI downgrade, as well as elevated leverage and developing business model.
Wed, Jun. 1, 3:54 PM
- Land-based oil drillers "all look overvalued," Credit Suisse analysts say as they downgrade Helmerich & Payne (HP -2.1%), Patterson-UTI Energy (PTEN -2%) and Precision Drilling (PDS -4.6%) to Underperform from Neutral, and Nabors Industries (NBR -3.8%) to Neutral from Outperform, predicting current spot rates likely will fall when incremental rigs go to work.
- Among the group, the firm sees HP as "the worst offender" on valuation, with overly optimistic assumptions for $35K spot market dayrates and forgiveness of deferred tax liabilities still not enough to justify the current price based on its rig count, while NBR is "the relative winner due to its international exposure."
- The firm prefers Baker Hughes (BHI +0.1%) and Halliburton (HAL -0.1%) in the sector due to their North American exposure and expectations of execution, while Schlumberger (SLB -0.6%) "has valuation headwinds and issues with exploration, deepwater and international exposure, but longer-term exposure to the stock is essential."
- Now read Moody's: Drillers will be the last to recover in the oil patch (May 16)