Baker Hughes Company Earnings Recaps
Baker Hughes shares fell 7.4% after earnings, despite strong orders, as investors appear to have focused on the limited growth in adjusted EPS and flat year-over-year EBITDA margins rather than the order momentum. The transcript also highlights higher interest expense and significant acquisition-related cash costs, though it does not identify a specific guidance cut.
Key takeaways
- Adjusted EBITDA was $1.42 billion, with margins of 17.6%—comparable to last year; adjusted EPS was $0.70, up modestly year over year.
- Free cash flow was $769 million, including approximately $200 million of Chart integration, restructuring, and closing-related cash costs.
- Orders were strong: company book-to-bill was 1.3x, while IET recorded $5.9 billion of orders and a record $39.4 billion in remaining performance obligations, up 23% year over year.
- Management raised its full-year orders expectation to $21.5 billion–$23.5 billion and expects IET orders to exceed $50 billion over Horizon 2.
- Chart integration is underway: Baker Hughes reported $70 million of the $325 million cost-synergy target already executed, and expects Chart EBITDA margins to reach 22%–23% by the second half of 2028.
Baker Hughes’ shares rose modestly by 2.1% following second-quarter results that showed solid execution and strong order growth, but the market refrained from a larger rally, likely reflecting lingering concerns around margin pressures and regional headwinds.
Key takeaways
- Adjusted EBITDA reached $1.23 billion, surpassing the high end of guidance, driven primarily by strong OFSC execution and seasonal recovery outside the Middle East.
- Adjusted EBITDA margin expanded by 70 basis points year-over-year to a record 18.3%, supported by strong Industrial Technology (IT) segment performance offsetting inflation-related margin pressure in OFSC.
- Orders in the Industrial & Energy Technology (IET) segment doubled year-over-year to a record $7.1 billion, with a 2.2x book-to-bill ratio and 19% growth in remaining performance obligations to $37.1 billion.
- Power Systems backlog and order pipeline remain strong, with plans to expand gas turbine and generator capacity targeting up to $5 billion in annual revenue by 2029 at full utilization.
- The recent acquisition of Chart Industries enhances the portfolio, but results continue to be challenged by fluid conditions in the Middle East.
Baker Hughes reported a strong third quarter for 2025, with adjusted EBITDA of $1.24 billion and a record IET backlog of $32.1 billion, driven by significant LNG and power generation orders.
Key takeaways
- Adjusted EBITDA rose to $1.24 billion, reflecting effective business system deployment and solid U.S. land performance.
- IET orders reached $4.1 billion, with record equipment packages in LNG and new energy sectors, contributing to a robust $32.1 billion backlog.
- Significant contracts include over $800 million for LNG projects and a notable award from Dynamis for mobile power generation exceeding 1 gigawatt.
- Continued focus on integrated solutions for low-carbon energy, with progress in geothermal projects and extensive data center power generation orders.
- Full year adjusted EBITDA is expected to exceed $4.7 billion, highlighting strong operational momentum and positive market demand.