Analyst Note| Preston Caldwell |
Baker Hughes experienced its typical seasonal slowdown in the first quarter. Revenue was down 13% sequentially due mostly to the turbomachinery segment, where revenue was down 24% sequentially (in line with the average first-quarter drop over the last three years). Adjusted operating margins dropped sequentially to 5.6% from 8.4% owing to the fall in volumes. Our fair value and no-moat rating are unchanged following the results.