Energy equipment and services company Baker Hughes' (NASDAQ: BKR) second-quarter results produced a mixed reaction among investors. Just like its peer, , Baker Hughes served notice that lower oil and gas prices were curbing upstream and shale spending in North America.

However, there's a lot more to Baker Hughes than that, and the company beat estimates for the quarter and also raised the midpoint of its full-year guidance. What's going on, and is now the time to bail out of the stock or buy more?

It's no secret that the energy sector is a cyclical industry. High prices induce investment, which often causes overcapacity in the sector leading to a collapse in energy prices. A slump in investment follows, which causes under-capacity, and ultimately prices start rising again, so the cycle begins anew.

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Source Fool.com