Morningstar Rating

Stock Research and Analysis

by Connie Hsu, CFA

Bulls Say

Higher spending for exploration and production in 2014, increased technology penetration in North America and overseas, and continued cost-saving efforts internally suggest a bright outlook for Baker Hughes.
The 2009 reorganization along geomarket lines and the 2010 purchase of BJ Services were great strategic moves that helped improve Baker Hughes' competitive position.
Russia is a recent success story. A few years ago, 70% of Baker Hughes' sales were products, but today, 70% of the business is services-related, which positions the firm to capture more work. Read more 

Bears Say

Baker Hughes' North American business is struggling with efficiency issues, while its international markets are struggling to keep up with peers.
Baker Hughes' international reorganization has become more complicated with the addition of BJ Services. Competitors may be able to win high-profile contracts while Baker Hughes works out the kinks in its new model.
The firm's patent portfolio strength is the weakest out of its main competitors, which casts doubt on the success of its systematic approach to technology development. Read more 

Management

For years, Baker Hughes struggled to keep up with its larger peers because of its product rather than geo-market focus. In 2009, former CEO Chad Deaton finally reorganized the company along geo-market lines and purchased BJ Services, a pressure-pumping   Read more 

Profile

Baker Hughes provides a wide variety of oilfield services, such as directional drilling, oilfield chemicals, drill bits, and electronic submersible pumping systems. It operates   Read more 

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