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Baker Hughes Incorporated Message Board

  • hard_loiner hard_loiner Oct 19, 2012 2:10 PM Flag

    New management is necessary at Baker Hughes. Enough of this already.

    It's proven that Craigshead can't run this company. He's in way over his head and should either sell the company to a stronger player or be replaced by a proven manager in the oil service space.

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    • BHI is a huge conglomerate, loss due to size, waste, slowness to react comes with the territory. They will NEVER be SLB, so accept it. The market knows that, hence why for decades BHI has
      always been priced lower on P/E, price to book, price to sales, etc. Bottom line is, as one of my favorite bands the Tower of Power stated in thier song from 1974: "Their is only so much oil in the
      ground". You think oil prices, and investor psychology, will turn around- it always has- then you can
      decide to go long any of SLB, BHI, HAL, etc. here. BHI has always been a go to for me when the cycle is right because just as it goes down farther in bad markets than SLB, it often has a higher upside on the comeback.

      Sentiment: Buy

    • Can't blame Craighead for the timing of the BJ Services purchase. No one would want to inherit that move to go all in on pressure pumping at the worst time. That tied up too much money/manpower.

    • What is negatively affecting Baker's business are small time non core businesses.

      Excerpts from:

      Baker Hughes Incorporated Management Discusses Q3 2012 Results - Earnings Call Transcript

      And finally, we've made the decision to sell our Process and Pipeline Services business, otherwise known as PPS. Accordingly, we've reclassified in all periods the revenue, expenses, cash flows and balance sheet at PPS to discontinued operations. PPS was previously a component of our Industrial Services segment, which now primarily consists of our downstream chemicals and specialty polymers businesses. We currently expect the ultimate disposition of PPS to be finalized in the coming months.

      Subtract $0.07 for international operations, primarily due to activity delays in Europe and North Africa and transitory expenses in the Middle East. Subtract $0.02 for Industrial Services, primarily due to reduced demand for specialty polymers.

      Our Industrial Services segment, which has been reclassified to now exclude our Process and Pipeline Services business, revenue was $193 million, down $6 million compared to the prior year and down $14 million sequentially. Operating profit was $14 million compared to $31 million last year and $26 million last quarter. The decrease in profit is primarily due to reduced sales in our specialty polymers business, which faced reduced demand, driven by sluggish economic conditions in the U.S., Europe and China.

      Industrial Services should see a decrease in revenue and an increase in operating profit in Q4 with margins around 10%. Process and Pipeline Services, which is now included in discontinued operations, should see its normal seasonal decline in Q4 with revenue declining approximately 25%.

      So looking ahead, as I said earlier, succeeding in this market requires differentiating technology and capital discipline. We continue to invest in the right technologies and commercialize new products and service. And we are allocating capital to the product lines and regions that provide differential earnings growth, while at the same time, we are reducing investment in product lines and geomarkets that are non-core or do not provide the required rate of return.

    • Hard, I totally agree.
      Craighead has had enough time and the board should consider replacing him.

    • I agree. Craighead has been a disaster and the stock has been in free fall since he took over.

    • BHI has made organizational moves this quarter with the closing of a chemical plant, sale of the pipeline industrial business unit, plus other initiatives stated in the quarterly report. These moves will have a positive impact in 2013.

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