Baker Hughes is an oilfield services company that sells drilling equipment and helps oil exploration & production companies to drill oil wells. The company operates in 90 countries worldwide. The company earned $9.7 billion in revenue and $421 million in net income in 2009.
While the company is focused on expanding in high-growth sectors, the success of its ventures is not guaranteed. Since the services that are expected to generate a large amount of money in the near future are very costly, oil prices must stay high in order for companies to demand risky and expensive forms of oil exploration and production like deepwater. If prices stay up, oil and gas companies will be willing to pay big bucks for BHI's services; deepwater exploration has been shown, when it yields, to pay off well. Furthermore, lower output from maturing wells has sparked industry interest in extracting from more difficult reserves, increasing demand for BHI's high-efficiency drill bit business and driving up segment margins. But the company faces threats from seasonal storms that damage expensive equipment and slow production. BHI's competitors include Schlumberger, Halliburton, and Weatherford International, all of which are focusing their energies on the same market as Baker Hughes: the Middle East.(Read more at Wikinvest )