SOURCE: Five Star Equities

Five Star Equities

July 17, 2012 08:20 ET

Baker Hughes and Halliburton Continue to Navigate Sliding Oil Prices

Five Star Equities Provides Stock Research on Baker Hughes and Halliburton

NEW YORK, NY--(Marketwire - Jul 17, 2012) - Falling Oil prices and a shift in focus from natural gas to oil drilling have been some of the challenges the Oil & Gas Equipment & Services Industry have faced in 2012. "All signs point to a continued weakening in the U.S. onshore [oil-field services] market," Raymond James analysts said in a recent report. Five Star Equities examines the outlook for companies in the Oil & Gas Equipment & Services Industry and provides equity research on Baker Hughes Inc. (NYSE: BHI) and Halliburton Company (NYSE: HAL).

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The recent economic slowdowns in Europe and China have raised concerns regarding future oil demand. Falling prices have made it less profitable for oil and gas companies to drill in formations requiring more expensive drilling techniques. "I think there is considerably more uncertainty about the resilience of exploration and production capital spending" in North America, said Bill Herbert, Simmons & Co. analyst. "That's the result of diminished cash flow and cash-flow expectations."

Investors will receive a clearer picture of the industry after Schlumberger Ltd. and Baker Hughes Inc. report second quarter results at the end of the week.

Five Star Equities releases regular market updates on the Oil & Gas Equipment & Services Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous stock reports and industry newsletters.

Baker Hughes reported that it has scheduled a conference call on Friday, July 20, 2012, to discuss results for the second quarter 2012, ending June 30, 2012. The company previously reported net income for the first quarter 2012 of $379 million, or $0.86 per diluted share. This compares to $0.87 per diluted share for the first quarter 2011 and to adjusted net income (a non-GAAP measure) of $1.22 per diluted share and net income of $0.72 per diluted share for the fourth quarter 2011.

Halliburton has experienced increased costs for guar gum, an agricultural commodity used as a blending additive to its fluids utilized in hydraulic fracturing. As a result, the company now believes that its North America margins will be impacted 300 basis points more than its previous guidance of 200 to 250 basis points, for a total impact of 500-550 basis points lower than first quarter levels. The company is scheduled to release second quarter 2012 financial results on Monday, July 23, 2012.

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