Baker Hughes (NASDAQ:BKR) Shares Gap Up After Strong Earnings

Baker Hughes Company (NASDAQ:BKR) gapped up prior to trading 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 trading hands.

The company reported $0.64 EPS for the quarter, topping analysts’ consensus estimates of $0.49 by $0.15. The company had revenue of $6.74 billion during the quarter, compared to analysts’ expectations of $6.51 billion. Baker Hughes had a net margin of 11.17% and a return on equity of 14.17%. Baker Hughes’s revenue for the quarter was up 2.4% on a year-over-year basis. During the same period last year, the business earned $0.63 EPS.

Baker Hughes Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Monday, August 17th. Shareholders of record on Friday, August 7th will be issued a $0.23 dividend. The ex-dividend date of this dividend is Friday, August 7th. This represents a $0.92 dividend on an annualized basis and a dividend yield of 1.5%. Baker Hughes’s dividend payout ratio (DPR) is currently 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

Wall Street Analyst Weigh In

Several research firms recently issued reports on BKR. Zacks Research raised Baker Hughes from a “strong sell” rating to a “hold” rating in a research report on Monday, June 15th. TD Cowen lifted their price target on Baker Hughes from $75.00 to $77.00 and gave the stock a “buy” rating in a research report on Thursday, July 2nd. Weiss Ratings downgraded Baker Hughes from a “buy (b)” rating to a “buy (b-)” rating in a research note on Monday, July 13th. Capital One Financial increased their price objective on Baker Hughes from $66.00 to $71.00 and gave the company an “overweight” rating in a report on Thursday, May 21st. Finally, Wall Street Zen cut Baker Hughes from a “buy” rating to a “hold” rating in a research note on Monday, July 20th. Eighteen equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company. According to MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus price target of $70.00.

Insider Buying and Selling at Baker Hughes

In related news, CAO Rebecca L. Charlton sold 5,088 shares of the firm’s stock in a transaction 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 $1,027,327.34. This trade represents a 24.13% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at 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 value of $10,599,844.73. Following the transaction, the chief executive officer owned 703,444 shares of the company’s stock, valued at approximately $41,102,232.92. This represents a 20.50% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders have sold 367,910 shares of company stock valued at $22,420,797. 0.19% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Baker Hughes

Hedge funds have recently modified their holdings of the business. Woodline Partners LP boosted its position in Baker Hughes by 40.8% during the first quarter. Woodline Partners LP now owns 83,650 shares of the company’s stock worth $3,676,000 after acquiring an additional 24,225 shares during the last quarter. Focus Partners Wealth raised its holdings in Baker Hughes by 5.6% in the 1st quarter. Focus Partners Wealth now owns 18,481 shares of the company’s stock valued at $812,000 after acquiring an additional 986 shares during the last quarter. Jump Financial LLC purchased a new position in Baker Hughes in the 2nd quarter worth approximately $2,301,000. NewEdge Advisors LLC boosted its holdings in shares of Baker Hughes by 4.0% during the 2nd quarter. NewEdge Advisors LLC now owns 46,407 shares of the company’s stock worth $1,779,000 after purchasing an additional 1,768 shares during the last quarter. Finally, Nebula Research & Development LLC acquired a new position in shares of Baker Hughes during the 2nd quarter worth approximately $1,014,000. 92.06% of the stock is currently owned by institutional investors and hedge funds.

Baker Hughes Stock Up 8.8%

The company has a quick ratio of 1.77, a current ratio of 2.13 and a debt-to-equity ratio of 0.79. The business has a 50-day moving average price of $60.00 and a 200-day moving average price of $59.97. The firm has a market capitalization of $61.81 billion, a PE ratio of 19.90, a price-to-earnings-growth ratio of 2.38 and a beta of 0.96.

About Baker Hughes

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.