Baker Hughes, Can Earnings Shake The Week? (BHI, XOM, HAL, SLB)

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Baker Hughes Int’l (NYSE:BHI) is set to report earnings on Friday morning.  After a major meltdown like today and after the first time in recent trading where Exxon Mobil (NYSE:XOM) actually missed earnings instead of beating estimates and fell almost 5%, it is too hard to get overly excited about a single earnings report.  But Baker Hughes is widely held and is deemed one of the leaders in its sector.

We’ve already seen Schlumberger (NYSE:SLB) and Halliburton (NYSE:HAL) post earnings, and this will complete much of the circle.  Analysts, according to First Call, are expecting baker Hughes to post $1.10 net EPS on revenues of $2.48 Billion.  Last quarter earnings was a beat of estimates with $1.17 EPS and the quarter before was a net miss with earnings at $1.09 EPS. 

It’s hard to tell how effcient options are after a move and market seen today, but based on the close it looks like options traders are prepared for Baker Hughes stock to move up to about $3.00 in either direction.  Of the analysts that follow the stock, it appears that an average price target is $95.00.

Shares closed down 2.1% at $81.26, still closer to the higher-end of the $61.08 to $89.95 range seen over the last year.  The company just today noted it was maintaining the $0.13 quarterly dividend.  These guys must be paying off whatever is left of the Howard Hughes estate, because that is paltry for an industry that is reluctant to pay out more income when their base commodity price is so high.

Jon C. Ogg
July 26, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.