NEW YORK (TheStreet) -- Back in May, I talked about the struggles that energy services giant Baker Hughes (BHI) continues to face in an industry that has been marred by slumping prices and weak rig counts.As with Halliburton ( HAL) and Schlumberger ( SLB), Baker Hughes showed tremendous progress in the April quarter. In fact, Baker Hughes was the only one of the three companies to post any sequentially growth. But that was as far as the advantages went. While I was willing to give management plenty of credit for the noticeable improvements, I also couldn't ignore that Baker Hughes also took a significant hit on year-over-year revenue growth and profits, which declined 2% and 30%, respectively. Credit Suisse, meanwhile, saw it another way. Despite the underperformance, Credit Suisse felt it was necessary to assign a $54 price target on shares of Baker Hughes, which (at the time) was a 25% premium from current levels -- a move that I thought was highly premature, if not a complete mistake.
Elsewhere, revenue in North America advanced 3% from the April quarter, but was flat on a year-over-year basis. Though I could go on a rant and nitpick the lackluster results in North America, this performance, however, was pretty much on par with Schlumberger. But unlike Schlumberger, Baker Hughes didn't so well on the operating side of the business as gross margin fell roughly 3% year over year, leading to a 27% decline in operating income. With the oil services sector being such a "bottom line" industry, I don't see how we can continue to ignore the bottom-line disappointments in these results. This quarter's 27% profit decline could have been excused if it didn't follow a 30% decline in the April quarter. I've said this before and it certainly merits repeating here: While it's encouraging that international markets are growing are a quick pace, Baker Hughes needs better diversification. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.