Baker Hughes stock gains after setting $2 billion stock repurchase program

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Shares of Baker Hughes Co.
BKR,
+0.28%
rallied 0.8% in morning trading Friday, after the oilfield products and services company said it set a $2 billion stock repurchase program. Based Thursday’s stock closing price of $21.18, the buyback program represents about 9.1% of the shares outstanding. The repurchases come as General Electric Co.
GE,
-2.56%
continues to sell off its stake in the company, which GE saying earlier this week that it received $1.0 billion in proceeds from the sale of Baker Hughes stock in the second quarter and expects to receive about $1.3 billion in proceeds in the third quarter. In Baker Hughes’ conference call with analysts following second-quarter results released July 21, BofA Securities analyst asked “why not do a buyback to help partially offset the continued drag on our stock from GE,” according to a FactSet transcript. Chief Financial Officer Brian Worrell responded by saying, among other things, “share repurchases can certainly be an attractive price of the capital allocation portfolio view.” Baker Hughes’ stock has edged up 2.4% year to date, while the SPDR Energy Select Sector ETF
XLE,
-1.59%
has rallied 31.8% and the S&P 500
SPX,
-0.54%
has advanced 17.1%.

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