Key Highlights

  • Baker Hughes reported third quarter revenue of USD 8.0 billion, with adjusted diluted earnings per share of USD 0.70, above estimates.
  • Total orders reached USD 10.8 billion, including USD 5.9 billion from the Industrial and Energy Technology segment.
  • Remaining performance obligations hit a record USD 46.4 billion, including record IET backlog of USD 39.4 billion.
  • Adjusted EBITDA rose 14% year over year to USD 1,415 million, supported by the Chart Industries acquisition and cost initiatives.

Record Backlog Builds on Strong Order Intake

Baker Hughes (NASDAQ:BKR) reported third quarter revenue of USD 8.0 billion and attributable net income of USD 411 million, or USD 0.41 per diluted share on a GAAP basis. Adjusted diluted earnings per share were USD 0.70, while adjusted EBITDA reached USD 1,415 million, up 14% year over year and 15% sequentially.

Total orders for the quarter were USD 10.8 billion, including USD 5.9 billion from the Industrial and Energy Technology segment, which the company described as its second largest order quarter on record. Remaining performance obligations ended the quarter at a record USD 46.4 billion, up USD 6.4 billion sequentially, including record IET backlog of USD 39.4 billion.

Segment Performance and Raised Order Outlook

The Industrial and Energy Technology segment secured broad based commercial wins across power generation, compression and lifecycle service capabilities, including a major order to supply 1.1 gigawatts of power generation equipment for a large U.S. technology company to support data center and advanced computing infrastructure. The Oilfield Services and Equipment segment reported improved international momentum, including a notable pickup in Middle East activity.

Based on this order momentum, the company raised its full year IET order guidance and its longer term IET order outlook to more than USD 50 billion. Cash flow from operating activities was USD 1,005 million for the quarter, with free cash flow of USD 769 million, while capital expenditures totaled USD 236 million across the company's three segments.

Integration Progress and Market Risk Factors

The recently acquired Chart Industries business delivered what the company described as a solid first quarter as part of Baker Hughes, with integration efforts progressing and early cost synergy actions identified. Net income declined from the prior year period, reflecting a combination of segment mix shifts and acquisition related items layered into the current period's results.

Continued strength in data center, LNG and gas infrastructure demand could sustain the order momentum behind the raised IET outlook, while a slowdown in large scale industrial capital spending or delays in project awards could affect the pace at which the record backlog converts into recognized revenue over coming quarters.

Backlog Conversion to Track Ahead

The pace at which the record USD 46.4 billion in remaining performance obligations converts into revenue, continued progress on Chart Industries integration and related synergies, and further updates on the raised IET order outlook above USD 50 billion are among the data points the company has pointed to for coming quarters. Oilfield Services and Equipment momentum in international markets, particularly the Middle East, is a separate trend the company has flagged.