Tomahawk, WI 10/21/2013 (BasicsMedia) – Baker Hughes Incorporated (NYSE:BHI), with a market cap of $24.61 billion, offers its services and products in the oilfield industry. BHI’s operations are spread in more than 80 countries worldwide. As an oilfield services company, it is the third largest in the globe. When it recently posted its third quarter financial results, I noticed that there had been a 22% increase in quarterly profits. The market has responded to this news with a lot of excitement. Investors are interested in finding out whether this massive increase in profit has a long-term outlook or not.

Reasons for BHI’s Better Than Expected Results

The single reason that BHI has issued for its remarkable levels of profitability during the third quarter of 2013, is the strong international drilling activities. This activity is quite intense in regions such as Africa and the Middle East. The strong international drilling activities cited by BHI, have helped the company enjoy net income of $341 million. The third quarter profits for 2013 are much higher than what the company reported for the same quarter in 2012, $279 million. The company’s revenue in the third quarter of 2013 has risen by 8% to $5.79 billion.

A close look at the financial results announced by BHI indicates that they were better than what Wall Street analysts had predicted. Last year the company’s revenue was $5.35 billion during such a time as this. This year, the revenue has improved to $5.79 billion, signifying an increase of 8%.  I believe this figure could have been much higher if not for the restructuring work currently going on in Latin America. If not for the restructuring, BHI’s adjusted profits of $358 million, higher than the $322 million posted last year, could have been better.

Wall Street analysts expected BHI to raise $5.77 billion in revenue, compared to the actual amount of $5.79 billion. Whenever a company reports better than expected results, its shares gain considerably in the market. The company earned record revenue and showed string growth where earnings are concerned. The future prospects are quite solid and I think the company will move forward in terms of seeing its revenue and net income growing substantially. BHI saw a sequential margin increase in the four geographic segments where its operations are located.

BHI Owns the Technology and Expertise to Withstand Complexities

Oil and natural gas production, continues to grow in complexity, but this has not affected BHI. All the complexities of oil and natural gas operation fit perfectly with BHI’s strength in reservoir expertise and technology. The company has benefited a great deal from its Canadian operations, which have been quite strong in the third quarter of 2013. The onset of summer, helped BHI’s Canadian operations since the ground is now drier. The company’s revenue from Asian Pacific and Middle East regions increased by about 8% during this quarter.

The company’s shares have risen by about 5% in the last three months, and I expect this to continue now that its latest quarterly financial results are better than what analysts expected. Since the largest oilfield services company in the world, Schlumberger Ltd, also reported better results than what analysts expected, and this seems to be the norm in the industry, BHI’s profitability could be long-term.

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