Baker Hughes provides operational update for the Q4, provides Q4 EPS guidance below consensus; repurchases $350 mln in common stock
Co provides the following update for the fourth quarter of 2013:
Q4 guidance
Co issues downside guidance for Q4 (Dec), sees EPS of $0.78-0.80, excluding non-recurring items, vs. $0.83 Capital IQ Consensus Estimate.
Operations update pertaining to guidance
Following the disruption to its business in Iraq during the fourth quarter, Baker Hughes resumed operations by the end of December. Due to the lost revenue related to this event, expenses associated with personnel movements and security measures, and other nonrecurring items, the pretax and after-tax profit impact from the disruption in Iraq during the fourth quarter is ~$80 mln, or $0.18 per share.
In the U.S. and the North Sea, activity declined primarily due to weather delays late in the quarter. As a result, North America and Europe/Africa/Russia Caspian operating profit margins declined sequentially.
As a result of the operational items highlighted above, adjusted earnings per share (a non-GAAP financial measure) are estimated to be between $0.60-0.62 per share for the quarter. The estimated adjusted earnings per share exclude $29 mln in after-tax severance costs, or $0.06 per share, incurred during the quarter. If not for the Iraq disruption, the estimated adjusted earnings would be between $0.78-0.80 per share.
Stock Repurchase Update
During the fourth quarter Baker Hughes repurchased ~6.3 mln shares of common stock, totaling $350 mln.