It's a funny world these days in energy land. One day, companies like Baker Hughes (NYSE:BHI) and Schlumberger (NYSE:SLB) are the toast of the town. The next, they're just toast. But such is the wild and wooly world of the new millennium, where politicos here and abroad flap their gums nonstop and make oil and gas prices quiver with each utterance.

At least Baker Hughes continues to post strong results. Like Schlumberger and Halliburton (NYSE:HAL), Baker Hughes is all about helping energy producers produce energy -- offering tools, fluids, services, and so on to facilitate drilling, well completion, and production.

Revenue this quarter was up 26%, as both the drilling/evaluation and completion/production businesses posted better-than-20% top-line growth. And while I hate to sound like a broken record, this strong revenue performance is outpacing the expense growth, allowing the company to exercise some meaningful operating leverage -- to the tune of 65% higher operating income.

As previously discussed, Baker is selling its part of Western Geco to Schlumberger for a nice chunk of cash ($2.4 billion), a large chunk of which Baker will then apply toward share repurchases.

The ultimate question now, as always, is this: What's going to happen with the drilling market? On the one hand, natural gas looks vulnerable because of strong production and lower-than-expected drawdowns in the winter. On the other hand, we have politicians squawking about gouging and taking away drilling tax advantages, yet pointing out that we're still rather vulnerable to foreign oil (or being cut off from said oil).

In other words, I have no clue what's going to happen with rig rates, U.S. land activity, or natural gas prices. I do know, though, that this is a hard business in which to make a long-term economic profit. So though I'm not saying, "Sell," I am saying, "Be cautious" -- particularly to those of you who are sitting on nice gains. Don't let a nice win evaporate into a sad loss because you're waiting for "just one more point up."

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).