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Baker Hughes Stock Drops After Q3 Results Lag Analyst Forecasts

Baker Hughes results were hurt by supply-chain disruption, surging chemical prices and Hurricane Ida, which limited energy production.
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Baker Hughes  (BKR) - Get BAKER HUGHES COMPANY CLASS A Report shares fell on Wednesday after the oilfield-services giant posted third-quarter results that lagged analyst expectations.

The company suffered from supply-chain disruption, surging chemical prices and Hurricane Ida, which limited energy production.

Shares of Baker Hughes on Wednesday closed at $25.35, down 5.6%. It’s still up 27% over the past three months amid the jump in oil prices.

The Houston company posted profit of $8 million, or 1 cent a share, swinging from a loss of $170 million, or 25 cents a share, a year earlier.

Adjusted earnings quadrupled to 16 cents a share but lagged the FactSet analyst forecast of 21 cents.

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Baker Hughes registered revenue of $5.09 billion, down 1% from $5.14 billion a year earlier and below the FactSet analyst consensus of $5.33 billion. 

The company’s costs and expenses fell 8% to $4.72 billion.

"As we look ahead to the rest of 2021 and into 2022, we see continued signs of global economic recovery that should drive further demand growth for oil and natural gas,"  Chief Executive Lorenzo Simonelli said in a statement.

"However, the pace of growth is being hampered by the Covid-19 delta variant, global chip shortages, supply chain issues, and energy supply constraints."

Morningstar analyst Preston Caldwell puts fair value for Baker stock at $28 and assigned it no moat prior to the earnings report.

“The kind of transformative impact from the merger [with GE Oil and Gas] that would be necessary to generate economic profits on this inflated invested capital base is not a reasonable base-case scenario,” he wrote in a commentary last month.