NEW YORK (TheStreet) -- Oil prices are falling, causing a panic among some of the top names in the energy sector, but Schlumberger(SLB) - Get Report still managed to deliver fourth-quarter and full-year results Thursday, raising the bar for rival Baker Hughes (BHI) . But Baker Hughes, the world's third-largest oilfield services company by market cap, won't be left behind when it reports its own results Tuesday.
While shares are up about 1% year to date, which beats the broader market, the Houston-based company has lost 23.5% of its value in the last six months. During that span, the Dow Jones Industrial Average (DJI) and the S&P 500 (SPX) have gained 2.41% and 2.08%, respectively.
Schlumberger's fourth-quarter results caught the market by surprise. But a beat by Baker Hughes on Tuesday shouldn't be, especially since Schlumberger said despite the slowdown in the oil sector, it saw record North American revenue during the quarter. This bodes well for not only Baker Hughes, but also Halliburton(HAL) - Get Report -- a former rival with which Baker Hughes recently agreed to merge.
Part of the reason to be bullish on Baker Hughes is because the company has a much larger North American exposure than Schlumberger. North America accounts for 52% of Baker Hughes' total revenue.
Plus, following the release of its third-quarter results in October, Baker Hughes said it expects the North American segment to "deliver increased revenue and margins as activity levels return to normal in the Gulf of Mexico and profitability continues to improve in our pressure pumping business."
And if Baker Hughes' pressure pumping business -- which includes hydraulic fracturing, cementing, stimulation, and coil tubing -- has grown as Schlumberger's own results suggest, Baker Hughes is poised to outperform in 2015. Not to mention the fact that Baker Hughes' revenue from North America is already growing at a rate of 10.5% year over year, almost doubling its international growth rate of 5.5%.
On Tuesday, analysts expect Baker Hughes to deliver $1.07 a share earnings on revenue of $6.41 billion, representing year-over-year growth of 72% and 9%, respectively. For the full year, earnings are expected to be $3.87 per share, up 48% year over year, while full-year revenue is projected to be $24.3 billion, up 8.7% year over year.
The 48% jump in full-year earnings stands out, and it's the key reason why Baker Hughes has a consensus buy rating among the analysts that cover the company. Its mean 12-month price target is $70.50, suggesting gains of 25% from current levels.
The company is projected to grow earnings at an annual rate of 28% over the next five years, making Baker Hughes -- which pays a dividend yield of 1.2% -- a solid investment ahead of earnings.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.