Baker Hughes (NASDAQ:BKR) Shares Gap Up Following Earnings Beat

Baker Hughes Company (NASDAQ:BKR) shares gapped up before the market opened on Monday following a stronger than expected earnings report. The stock had previously closed at $57.25, but opened at $60.63. Baker Hughes shares last traded at $62.41, with a volume of 2,379,040 shares traded.

The company reported $0.64 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.49 by $0.15. Baker Hughes had a return on equity of 14.17% and a net margin of 11.17%.The company had revenue of $6.74 billion during the quarter, compared to analysts’ expectations of $6.51 billion. During the same period in the prior year, the business earned $0.63 EPS. The firm’s quarterly revenue was up 2.4% on a year-over-year basis.

Baker Hughes Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Monday, August 17th. Stockholders of record on Friday, August 7th will be given a dividend of $0.23 per share. The ex-dividend date of this dividend is Friday, August 7th. This represents a $0.92 annualized dividend and a dividend yield of 1.5%. Baker Hughes’s payout ratio is presently 29.39%.

Key Baker Hughes News

Here are the key news stories impacting Baker Hughes this week:

• Positive Sentiment: Quarterly results exceeded expectations. Baker Hughes reported adjusted EPS of $0.64, beating the $0.49 consensus estimate, while revenue of $6.74 billion topped expectations by $230 million and increased 2.4% year over year. Baker Hughes non-GAAP EPS and revenue results
• Positive Sentiment: Orders and backlog reached strong levels. Second-quarter orders totaled $10.5 billion, including $7.1 billion from IET, while remaining performance obligations rose to $40.1 billion. Record IET RPO of $37.1 billion provides greater revenue visibility. Baker Hughes second-quarter results
• Positive Sentiment: A major LNG technology order strengthens the growth narrative. Venture Global selected Baker Hughes to provide a comprehensive liquefaction solution for its CP2 LNG expansion in Louisiana. The order was booked during the second quarter and reinforces demand for Baker Hughes’ LNG equipment and services. Baker Hughes Venture Global LNG order
• Positive Sentiment: Shareholder returns remain supported. The board declared a quarterly dividend of $0.23 per share, payable August 17 to shareholders of record August 7, equivalent to a $0.92 annualized payout and an approximate 1.6% yield. Baker Hughes dividend announcement
• Neutral Sentiment: Chart Industries deal synergies could add upside, but execution matters. Analysis points to record IET orders and potential benefits from the Chart transaction as reasons for a more constructive outlook, while investors will likely monitor integration progress and the pace at which backlog converts into revenue. Baker Hughes orders and Chart deal analysis
• Negative Sentiment: Oilfield activity remains a concern. Reuters reported that lower drilling activity, partly linked to Middle East disruptions, pressured the oilfield services business. Strength in the industrial and energy technology segment offset this weakness, but a prolonged slowdown in upstream spending could limit near-term gains. Baker Hughes second-quarter earnings Reuters report

Analyst Upgrades and Downgrades

A number of equities analysts have commented on the stock. Wall Street Zen downgraded shares of Baker Hughes from a “buy” rating to a “hold” rating in a research note on Monday, July 20th. Barclays dropped their price target on shares of Baker Hughes from $74.00 to $72.00 and set an “equal weight” rating for the company in a research note on Thursday, July 16th. Capital One Financial raised their price target on shares of Baker Hughes from $66.00 to $71.00 and gave the stock an “overweight” rating in a report on Thursday, May 21st. Jefferies Financial Group reaffirmed a “buy” rating on shares of Baker Hughes in a research report on Thursday, July 9th. Finally, HSBC upped their price objective on Baker Hughes from $67.00 to $85.00 and gave the company a “buy” rating in a report on Monday, April 27th. Eighteen analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company’s stock. According to MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $70.00.

Insider Transactions at Baker Hughes

In related news, CAO Rebecca L. Charlton sold 5,088 shares of the stock in a transaction that occurred on Wednesday, June 3rd. The shares were sold at an average price of $64.22, for a total transaction of $326,751.36. Following the completion of the transaction, the chief accounting officer owned 15,997 shares of the company’s stock, valued at approximately $1,027,327.34. This trade represents a 24.13% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Lorenzo Simonelli sold 181,411 shares of Baker Hughes stock in a transaction that occurred on Monday, June 22nd. The shares were sold at an average price of $58.43, for a total transaction of $10,599,844.73. Following the completion of the sale, the chief executive officer owned 703,444 shares of the company’s stock, valued at $41,102,232.92. This trade represents a 20.50% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders have sold 367,910 shares of company stock valued at $22,420,797. Company insiders own 0.19% of the company’s stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently modified their holdings of BKR. Bleakley Financial Group LLC raised its holdings in shares of Baker Hughes by 0.6% in the 1st quarter. Bleakley Financial Group LLC now owns 25,485 shares of the company’s stock valued at $1,556,000 after buying an additional 163 shares during the period. Resolute Wealth Strategies LLC boosted its holdings in Baker Hughes by 2.7% during the 1st quarter. Resolute Wealth Strategies LLC now owns 6,597 shares of the company’s stock valued at $403,000 after acquiring an additional 172 shares during the period. Deseret Mutual Benefit Administrators boosted its holdings in Baker Hughes by 10.5% during the 4th quarter. Deseret Mutual Benefit Administrators now owns 1,884 shares of the company’s stock valued at $86,000 after acquiring an additional 179 shares during the period. Krilogy Financial LLC grew its position in Baker Hughes by 3.2% in the 4th quarter. Krilogy Financial LLC now owns 5,722 shares of the company’s stock valued at $261,000 after acquiring an additional 180 shares in the last quarter. Finally, 3Chopt Investment Partners LLC grew its position in Baker Hughes by 0.5% in the 4th quarter. 3Chopt Investment Partners LLC now owns 42,679 shares of the company’s stock valued at $1,944,000 after acquiring an additional 203 shares in the last quarter. 92.06% of the stock is currently owned by hedge funds and other institutional investors.

Baker Hughes Stock Performance

The company has a debt-to-equity ratio of 0.79, a quick ratio of 1.77 and a current ratio of 2.13. The company has a market capitalization of $61.81 billion, a price-to-earnings ratio of 19.90, a P/E/G ratio of 2.38 and a beta of 0.96. The firm has a 50-day simple moving average of $60.00 and a two-hundred day simple moving average of $59.97.

Baker Hughes Company Profile

Baker Hughes is an energy technology company that provides a broad portfolio of products, services and digital solutions for the oil and gas and industrial markets. Its offerings span oilfield services and equipment — including drilling, evaluation, completion and production technologies — as well as turbomachinery, compressors and related process equipment used in midstream and downstream operations. The company also supplies aftermarket services, field support and integrated solutions designed to improve asset performance and uptime across the energy value chain.

The firm’s roots trace back to the merger of Baker International and Hughes Tool Company, and more recently it combined with GE’s oil and gas business in 2017 to form Baker Hughes, a GE company (BHGE); subsequent changes in ownership restored Baker Hughes as an independent publicly traded company.