Lots of companies would surrender a corporate left arm for a 23% hike in quarterly earnings. But for Baker Hughes (NYSE: BHI), that wasn't quite good enough, and the market told the company so in no uncertain terms.

For the quarter, the big Houston-based oilfield services company earned $400.5 million, or $1.26 a share, compared to $326.2 million, or $1.02 a share, in the same quarter of 2006. Revenue was up 12% to $2.74 billion. But if the Wall Street dart throwers are expecting $1.28 per share for the quarter, a two-penny shortfall can get your ears pinned back, as was the case with Baker's share price, which was thumped by nearly 8.5% on Wednesday.

The conundrum for Baker Hughes, as with virtually all other oilfield services operators, including Schlumberger (NYSE: SLB), BJ Services (NYSE: BJS), Halliburton (NYSE: HAL), and Weatherford (NYSE: WFT), is the increasing disparity between activity levels in North America and elsewhere in the world. As Baker's CEO, Chat Deaton said, "In North America we expect no more than moderate increases in spending in 2008 because strong drilling activity has brought natural gas production growth roughly into balance with demand growth."

And beyond that, while the company expects its operations in other venues to grow, the rate of expansion likely will not match the immediate past: "Outside of North America, we expect growth to continue in 2008, but at a somewhat slower pace than in recent years."

For Fools, the key then becomes the specific attractiveness of Baker Hughes under somewhat slower-growth conditions. In that connection, I'd note that, following its market drubbing on Wednesday, the company's forward P/E ratio is less than 11 times, despite a return on equity of about 26% and an operating margin of nearly 22%. At the same time, it sports a balance sheet that would induce drooling among many CEOs.

Finally, the company's share price today is about what it was a year ago -- when the price of oil was far lower and before a 2007 run-up in the sector. So, given my belief that crude prices will soon resume their upward march in response to the world's expanding petroleum demand, I judge Baker Hughes to be well worth a Foolish gander.

For related Foolishness: