Baker Hughes Inc. (BHI), one of the largest oilfield service companies in the world, reported fourth-quarter 2014 adjusted earnings from continuing operations of $1.44 a share, which beat the Zacks Consensus Estimate of $1.08. The bottom line also improved from the year-ago adjusted profit level of $1.02 a share.
The total revenue of $6,635 million in the quarter has risen over 13% from the year-ago level of $5,860 million. The top line also surpassed the Zacks Consensus Estimate of $6,378 million.
Full-year 2014 adjusted earnings from continuing operations of $4.22 a share, came above our expectation of $3.88 by 8.8%. Growth of 61.1% from $2.62 recorded in the prior year was also noted.
Total revenue of $24,551 million in 2014 increased 9.8% year over year and was ahead of the Zacks Consensus Estimate of $24,295 million.
Fourth-Quarter Segmental Highlights
Of Baker Hughes' total quarterly revenue, North America, Europe/Africa/Russia/Caspian, Middle East/Asia-Pacific and Latin America accounted for 50%, 17%, 18% and 9%, respectively. The remainder was generated by the Industrial Services segment.
Europe/Africa/Russia/Caspian, recorded a profit before-tax margin of 17% compared with 15% in the year-ago quarter, and for North America it came in at 15% compared with 8% in the year-earlier quarter. Pre-tax margin at the Middle East/Asia-Pacific segment also came in at 19% against 8% in the year-earlier quarter. For Latin America this margin rose to 20% from 10% in the year-ago period. The only exception was the Industrial Services segment, which registered lower pre-tax margins at 6% compared with 10% in the year-ago quarter.
Liquidity
At the end of the fourth quarter, Baker Hughes had $1,740.0 million in cash and cash equivalents, while long-term debt was $3,913.0 million, representing a debt-to-capitalization ratio of 17.3%. Capital expenditures were $503 million and depreciation and amortization expense was $468 million in the fourth quarter.
Rank
Baker Hughes, the world's third-largest oilfield services provider after Schlumberger Ltd. (SLB) and Halliburton Co. (HAL), holds a Zacks Rank #5 (Strong Sell). A better-ranked energy player is Spectra Energy Partners, LP (SEP) which sports a Zacks Rank #1 (Strong Buy) and offers value.
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