Baker Hughes Co (NASDAQ:BKR) Turnarounds To Profit

Baker Hughes Co (NASDAQ:BKR) stock rose 2.36% (As on Jan 21, 12:11:07 AM UTC-4, Source: Google Finance) after the company reported an adjusted quarterly profit compared with a year-ago loss, as producers took advantage of a rise in crude prices that fueled demand for oilfield service equipment. Oil prices surged more than 50% last year on hopes of a global economic recovery from the COVID-19 pandemic and as OPEC+ cut supplies, even as coronavirus infections around the world continued to surge. The higher crude prices encouraged U.S. producers to ramp up drilling activity, with the U.S. rig count rising to 586 at the end of the fourth quarter, compared with 348 at the close of the December quarter in 2020, according to Baker Hughes data. Adjusted net income stood at $224 million, or 25 cents per share, in the three months ended Dec. 31, compared with a loss of $50 million, or 7 cents per share, last year.

Further, orders for the quarter were $6,656 million, up 24% sequentially and up 28% year-over-year. The sequential increase was a result of higher order intake in Turbomachinery & Process Solutions, Digital Solutions, and Oilfield Services, partially offset by lower orders in Oilfield Equipment. Equipment orders were up 38% sequentially and service orders were up 12%. Year-over-year, the increase in orders was a result of higher order intake in Turbomachinery & Process Solutions, Digital Solutions, and Oilfield Services, partially offset by lower orders in Oilfield Equipment. Year-over-year equipment orders were up 42% and service orders were up 17%. The Company’s total book-to-bill ratio in the quarter was 1.2; the equipment book-to-bill ratio in the quarter was 1.4. Remaining Performance Obligations (RPO) in the fourth quarter ended at $23.6 billion, an increase of $0.1 billion from the third quarter of 2021. Equipment RPO was $8.2 billion, up 9% sequentially. Services RPO was $15.3 billion, down 4% sequentially.

BKR in the fourth quarter of FY 21 has reported the adjusted earnings per share of 25 cents, missing the analysts’ estimates for the adjusted earnings per share of 29 cents, according to Zacks Investment Research. The company had reported flat revenue to $5.52 billion in the fourth quarter of FY 21, beating the analysts’ estimates for revenue of $5.5 billion. This is driven by higher volume in Oilfield Services, offset by Oilfield Equipment and Turbomachinery & Process Solutions.

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