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Baker Hughes Inc. (BHI)

  • Thu, Jan. 22, 12:08 PM
    • Baker Hughes (NYSE:BHI) declares $0.17/share quarterly dividend, in line with previous.
    • Forward yield 1.17%
    • Payable March 25; for shareholders of record March 4; ex-div March 2.
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  • Wed, Jan. 21, 6:56 PM
    • Commenting on the proposed merger between Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI), Morgan Stanley thinks the oil industry downturn may help HAL overcome antitrust hurdles, as weak oil prices make it harder to argue that market share power will translate into pricing power.
    • The weaker market also is likely to increase the value of the $2B in cost synergies HAL expects to achieve from the deal, given its much more depressed earnings figures, the firm adds.
    • Stanley lowers its earnings estimates for HAL but maintains its stock price valuation of $50/share.
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  • Tue, Jan. 20, 8:37 AM
    • Baker Hughes (NYSE:BHI) +1.6% premarket after easily beating Q4 earnings estimates but warning of a difficult 2015, similar to concerns discussed today in Halliburton's earnings report.
    • "While market demand ended up being more resilient in the fourth quarter than many had predicted, the recent declines seen in rig counts will clearly affect results in 2015," BHI CEO Martin Craighead says.
    • Q4 revenue at BHI's North American segment jumped 20.4% to $3.3B, Middle East/Asia Pacific revenue rose 13%, Europe/Africa/Russia added 5%, and Latin America revenue slipped 2%.
    • BHI says it realized its best pressure pumping margins in three years and hit its goal of mid-teens operating margins in North America; international results exceeded forecasts, driven by a surge in year-end product sales.
    • Says it will lay off 7,000 employees, mostly in the current quarter, and is reviewing its facilities for possible closures; expects to book a one-time charge of $160M-$185M.
    • On Friday, activist investor ValueAct Capital Management reported a 5.1% stake in BHI, an unusual move since the company is being bought by Halliburton; ValueAct began buying the week after the deal was announced in November.
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  • Tue, Jan. 20, 6:02 AM
    • Baker Hughes (NYSE:BHI): FQ4 EPS of $1.44 beats by $0.37.
    • Revenue of $6.6B (+12.6% Y/Y) beats by $190M.
    • Press Release
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  • Mon, Jan. 19, 5:30 PM
  • Fri, Jan. 16, 3:27 PM
    • Schlumberger (SLB +5.8%) pushes to highs of the day following Q4 results that were strong operationally once the big writedowns are stripped away, with continued strength driven by record activity in North America, Middle East and Asia.
    • In today's earnings conference call, CEO Paal Kibsgaard says crude oil’s collapse is putting heat on SLB’s prices for drilling services and fracking in North America, but the upside is that shale producers now want better technologies to squeeze more oil out of the wells they have already drilled.
    • Next-generation fracturing fluids SLB introduced early last year have so far grown in sales at 4x the rate of its 2011 iteration - which was a fast grower on its own - as falling oil prices force oil companies to adopt new technologies faster and more broadly.
    • On the pending merger with Baker Hughes (NYSE:BHI), the CEO says the deal could mean a glass ceiling on SLB’s market share in some countries will fall away.
  • Fri, Jan. 16, 2:27 PM
    • The U.S. drilling rig count plunged 74 units, all on land, to settle at 1,676 rigs working in the latest week for the lowest total since Oct. 2010, Baker Hughes (NYSE:BHI) says in its weekly report.
    • The count has now fallen for seven straight weeks as it has lost 244 units, and the U.S. now has 101 fewer rigs than during the same week a year ago.
    • Most of the losses came in Texas, where the count fell 44 units to 766 to bring the state’s total to its lowest since Mar. 2011; North Dakota gave up just six units to 156.
    • Canada added 74 rigs, but still has 125 fewer rigs compared with this week a year ago.
  • Fri, Jan. 9, 3:48 PM
  • Fri, Jan. 9, 2:58 PM
    • Barclays begins coverage of Halliburton (HAL -0.9%) as its top pick in the oilfield services and equipment sector at the same time as it views the overall sector as fairly valued.
    • The firm predicts HAL will gain market share during the current downturn since it charges the cheapest prices in North America in its group, and believes HAL’s pending acquisition of Baker Hughes (NYSE:BHI) should enable it to catch up with Schlumberger (NYSE:SLB) in terms of operational aptitude and stock multiple.
    • KeyBanc is less enthusiastic on HAL, rating the stock a Hold and saying the company faces "immediate risks" related to market challenges, market share erosion, and sales of assets as conditions of the BHI deal.
    • Earlier: Barclays says North America E&P spending could drop 30% or more
  • Fri, Jan. 9, 7:55 AM
    • Oil and gas companies could cut E&P spending in North America by 30% or more this year if U.S. crude oil prices continue to trade at $50-$60/bbl, Barclays estimates on the basis of a survey of 225 oil and gas companies.
    • The firm expects U.S. onshore rig count to fall by 500 rigs over the year to ~1,250 rigs by the end of 2015.
    • Barclays says this is only the seventh time in the 30-year history of its survey that global spending is estimated to fall, adding that spending rose by more than 10% the following year after almost every decline.
    • In the oilfield services group (NYSEARCA:OIH), the firm initiates Halliburton (NYSE:HAL), Baker Hughes (NYSE:BHI), National Oilwell Varco (NYSE:NOV) and FMC Tech (NYSE:FTI) at Overweight, and Forum Energy Tech (NYSE:FET) and Dril-Quip (NYSE:DRQ) at Underweight; Schlumberger (NYSE:SLB), Cameron (NYSE:CAM), Weatherford (NYSE:WFT) and Superior Energy (NYSE:SPN) are started at Equal Weight.
  • Tue, Jan. 6, 12:32 PM
    • Oppenheimer’s James Schumm thinks investors should buy high-quality oil services stocks such as Baker Hughes (NYSE:BHI), Halliburton (NYSE:HAL), Schlumberger (NYSE:SLB) and Weatherford (NYSE:WFT).
    • Large-cap oil service stocks "should not be this volatile," Schumm writes, noting that the world consumes ~92M bbl/day of oil, and demand is still growing - albeit at a slower rate - and is relatively inelastic, which requires a high level of service investment every year; low investment levels in 2015 will have to be made up in 2016 or 2017, barring a global economic shock.
    • Earlier: "Peak pessimism" at hand for oil services stocks, Citi says.
  • Tue, Jan. 6, 10:37 AM
    • Citigroup analyst Scott Gruber says now could be time for longer-term investors to bulk up on oil services stocks (NYSEARCA:OIH), taking the contrarian view that falling capital spending forecasts and looming bankruptcies by some E&P companies could portend that the industry’s shakeout is closer at hand.
    • Meanwhile, Gruber says oil services stocks tend to stop falling as oil reaches "unsustainably low” levels, and investors appear to be through much of their selling since valuations have fallen so low.
    • Oil services companies generally have been hit twice as hard as integrated oil majors during the past three months; related tickers include SLB, HAL, NOV, BHI, CAM, ESV, FTI, HP, TS, OII.
  • Mon, Jan. 5, 3:29 PM
    • The number of rigs drilling in the U.S. falls for the fourth straight week, losing 29 for a total of 1,811, according to Baker Hughes' (NYSE:BHI) latest tally.
    • Since Dec. 5, the count has plunged by 109 units but is still 60 ahead of the count in the first week of January a year ago.
    • Canada's count is declining more rapidly than the U.S., shedding 48 units on the week to 208 and down 74 units compared with this week a year ago.
    • Jamie Webster of IHS says the supply decline will take time; U.S. shale drillers aren’t going to stop drilling altogether, but they’ll be more selective about the wells they drill as oil prices fall, he says.
  • Dec. 23, 2014, 6:19 PM
    • Although the energy sector led today's stock advance, a raft of companies downgraded by Global Hunter mostly took it on the chin - none more so than Key Energy (NYSE:KEG), which plunged 15% after shares were cut to Reduce from Neutral with a $1.50 price target that was reduced from $2.50.
    • Also downgraded to Reduce were HERO -6.1%, NBR -3.2%, DO +1.3%.
    • Lowered to Neutral were HAL +0.5%, GEOS -8.9%, HP -2.9%, BAS -2.5%, PKD -2.5%, BHI +0.6%, BBEP -0.2%, MEP +0.1%.
    • Downgraded to Accumulate: PES -3.5%, PTEN -1.1%, NGLS +2.9%.
    • The firm upgraded five stocks - ATW, NOV, OII, RES and SPN - all of which gained in today's trading.
  • Dec. 23, 2014, 10:58 AM
    • Halliburton (NYSE:HAL) yesterday disclosed details of its sometimes-tense courtship of Baker Hughes (NYSE:BHI), showing that the companies had to bridge a $3.3B gap before reaching agreement for HAL to acquire its smaller rival for cash and stock that valued BHI at $34.6B.
    • BHI wanted $36.1B in stock and cash, which was 10% above HAL’s initial offer of $32.8B, and the companies eventually met in the middle during final, over-the-weekend negotiations.
    • Separately, an email yesterday from BHI CEO Martin Craighead to all employees did not mention layoffs but noted serious business concerns, saying pricing pressure on its products and services will intensify next year, and "market conditions will demand tough decisions from us in the months ahead.”
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  • Dec. 20, 2014, 1:29 PM
    • The super majors are probably the first place to look when oil prices fall, writes Avi Salzman, as their stocks tend to slide less drastically than smaller players, and maintenance of dividends is a priority for management. Favorites: Shell (RDS.A, RDS.B) and Chevron (NYSE:CVX).
    • While smaller producers appear risky, Occidental (NYSE:OXY) came into the price plunge well-positioned with one of the industry's cleanest balance sheets.
    • EOG Resources (NYSE:EOG) could be the pick among shale drillers, says Salzman, as it's chosen drilling spots carefully and its break-even price is among the lowest in the industry. "[The] best management team in Houston," says one fund manager.
    • Oil service stocks look especially vulnerable with capex budgets being cut, but Schlumberger (NYSE:SLB) "should have protection in the downturn," writes Salzman, noting the company repurchased 1% of the float in Q3 and at 1.8% yields more than (soon to-be-merged) Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI).
    • See also: Barron's: Five oils to be wary of (Dec. 20, 2014)
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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.