Baker Hughes Inc

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BHI : NYSE : Basic Materials
$49.82 up 1.76 | 3.66%
Today's Range: 48.17 - 49.91
Avg. Daily Volume: 3,287,300
09/28/16 - 4:00 PM ET

Financial Analysis


BAKER HUGHES INC's gross profit margin for the second quarter of its fiscal year 2016 has significantly decreased when compared to the same period a year ago. Sales and net income fell significantly; although net income growth outperformed the average competitor in its industry, revenue growth did not. BAKER HUGHES INC is extremely liquid. Currently, the Quick Ratio is 2.81 which clearly shows the ability to cover any short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 21.55% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)2408.03968.0
EBITDA ($mil)-150.0459.0
EBIT ($mil)-455.025.0
Net Income ($mil)-911.0-188.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)3910.01973.0
Total Assets ($mil)20319.026018.0
Total Debt ($mil)3026.04043.0
Equity ($mil)13883.017697.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin7.121.19
EBITDA Margin-6.2211.56
Operating Margin-18.90.63
Sales Turnover0.60.82
Return on Assets-15.161.0
Return on Equity-22.191.47
Debt Q2 FY16 Q2 FY15
Current Ratio4.023.19
Debt/Capital0.180.19
Interest Expense48.053.0
Interest Coverage-9.480.47


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)427.9435.88
Div / share0.170.17
EPS-2.08-0.43
Book value / share32.4440.6
Institutional Own % n/a n/a
Avg Daily Volume3391509.04484517.0

Valuation


SELL. The current P/E ratio is negative, which has no meaningful value in the assessment of premium or discount valuation, it simply displays that the company has negative earnings. For additional comparison, its price-to-book ratio of 1.55 indicates a discount versus the S&P 500 average of 2.82 and a discount versus the industry average of 2.65. The price-to-sales ratio is below the S&P 500 average and is well below the industry average, indicating a discount. After reviewing these and other key valuation criteria, BAKER HUGHES INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
BHI NM Peers 27.49   BHI 4.86 Peers 11.99

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

BHI's P/E is negative making this valuation measure meaningless.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

BHI is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
BHI NM Peers 120.26   BHI NA Peers 0.24

Neutral. The absence of a valid price-to-projected earnings ratio happens when a stock can not be valued on the basis of a negative expected future earnings.

BHI's ratio is negative making this valuation measure meaningless.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
BHI 1.55 Peers 2.65   BHI -1268.33 Peers -338.13

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

BHI is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, BHI is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
BHI 1.75 Peers 2.61   BHI -42.85 Peers -35.95

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

BHI is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

BHI significantly trails its peers on the basis of sales growth

 

 

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