I'm somewhat uncertain whether to call this a turnaround or a miraculously rapid healing. After a couple of disappointing quarters, Houston-based oilfield services company Baker Hughes
For the quarter that ended in March, the company generated income from continuing operations of $374.7 million, or $1.17 per share, compared with $318.8 million, or $0.93 a share, a year ago. Revenue for the quarter was up 20% to $2.47 billion, compared to $2.06 billion in the first quarter of 2006. The EPS line beat consensus expectations by about $0.07.
In announcing his company's results, Chad Deaton, the company's chairman and CEO, said, "Our profitability increased sequentially in the quarter due to recent actions taken to improve near term results. North America revenues were up 3% despite a weaker-than-expected rig count in Canada. Outside North America revenue reflected continued activity expansion offset by the seasonal decline in direct sales and Russia/CIS activity."
A quarter ago, soft activity levels in North America constituted the culprit in the failure to meet expectations, and management said they were executing a "West to East" program to better align operations with the most active energy horizons.
Looking ahead, the company said it expects full-year revenue generated outside North America to increase approximately 19% to 21%. The areas in that projection include Latin America, Europe, Africa, the Middle East, Asia Pacific, and Russia and the Caspian Sea. Assuming that U.S. drilling activity doesn't vary appreciably from the first-quarter level, the company expects domestic revenue to increase about 7%.
"The global oil market remains strong and Baker Hughes is well positioned to benefit from increased drilling and completion activity around the world." Deaton also said. He pointed to Brazil, Northern Africa, the Middle East, Russia, and India as specific areas of increased demand for the company's goods and services.
Baker Hughes is in a league with other large oilfield services companies like Schlumberger
My very strong belief is that the sort of growth that Baker Hughes sees for 2007 ultimately will represent something of the tip of the iceberg as worldwide energy demand increases steadily -- and perhaps dramatically -- in the years and decades to come. I therefore believe that any of the companies included above can serve to strengthen most Foolish portfolios.
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Fool contributor David Lee Smith is the proud owner of shares -- albeit fewer than he'd like -- in Schlumberger. Alas, not in the other companies mentioned. He welcomes your questions or comments. The Fool has a disclosure policy.