How Will Baker Hughes’ Presence In North America Impact Its Operating Margins?

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Baker Hughes

Plummeting commodity prices over the last two years have caused a big hole in the pockets of oilfield service companies across the globe. The disturbance in the commodity markets resulted in sluggish exploration and drilling demand worldwide, particularly in the North American markets, resulting in a steep drop in the demand for drilling rigs and other oilfield equipment. Consequently, large oilfield service companies, such as Baker Hughes (NYSE:BHI), have witnessed a significant decline in their revenue as well as profitability.


North American oil and gas markets have been the worst hit by the commodity slump. Thus, Baker Hughes, which has a sizeable presence in these markets, has suffered a notable contraction in its earnings, particularly over the last couple of quarters. This has resulted in a declining share of North American operations in the Houston-based company’s global revenues, and operating losses to the tune of almost $1 billion in the June quarter of 2016.

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  6. Baker Hughes’ 2016 In Review: Halliburton’s Loss Is GE’s Gain


Having said that, we do believe that Baker Hughes still has an upside potential because of its strong presence in the North American markets. Though the oilfield service provider anticipates the commodity markets to remain weak even in the second half of 2016, it is expected to benefit from the gradual recovery of the North American markets.

Have more questions about Baker Hughes (NYSE:BHI)? See the links below:


1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Baker Hughes

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