Baker Hughes Co (BKR, Financial) released its 8-K filing on October 22, 2024, detailing its financial performance for the third quarter of 2024. As a global leader in oilfield services and equipment, Baker Hughes operates in markets such as artificial lift, specialty chemicals, and completions, with a significant presence in industrial power generation and liquid natural gas markets.
Performance Overview
In the third quarter of 2024, Baker Hughes reported revenue of $6.9 billion, a 4% increase year-over-year but a 3% decline sequentially, missing the analyst estimate of $7,219.28 million. The company's attributable net income was $766 million, with a GAAP diluted EPS of $0.77, surpassing the estimated EPS of $0.60. Adjusted diluted EPS stood at $0.67.
Financial Achievements and Challenges
Baker Hughes achieved an adjusted EBITDA of $1,208 million, marking a 23% increase year-over-year. The company also generated $1,010 million in cash flows from operating activities and $754 million in free cash flow. These achievements underscore Baker Hughes' operational efficiency and ability to generate cash, crucial for sustaining growth in the volatile oil and gas industry.
We delivered another quarter of record EBITDA, highlighted by exceptional operational performance across both segments. Our margins continue to improve at an accelerated pace, with total company EBITDA margins increasing to 17.5%," said Lorenzo Simonelli, Baker Hughes Chairman and CEO.
Segment Performance and Strategic Initiatives
The Industrial & Energy Technology (IET) segment reported revenue of $2,945 million, a 9% increase year-over-year, driven by strong performance in Climate Technology Solutions and Gas Technology. The Oilfield Services & Equipment (OFSE) segment saw revenue of $3,963 million, a slight increase from the previous year.
Key strategic initiatives included securing significant contracts for gas infrastructure and FPSO projects, as well as expanding the adoption of digital solutions like Leucipaâ„¢ and launching CarbonEdgeâ„¢ to support decarbonization efforts.
Income Statement and Balance Sheet Insights
Operating income for the quarter was $930 million, a 30% increase year-over-year. The company's book-to-bill ratio was 1.0, indicating balanced order intake and revenue recognition. Remaining Performance Obligations (RPO) stood at $33.4 billion, with IET RPO reaching a record $30.2 billion.
| Metric | Q3 2024 | Q2 2024 | Q3 2023 | Year-over-Year Change |
|---|---|---|---|---|
| Revenue | $6,908 million | $7,139 million | $6,641 million | 4% |
| Net Income | $766 million | $579 million | $518 million | 48% |
| Adjusted EBITDA | $1,208 million | $1,130 million | $983 million | 23% |
Analysis and Outlook
Baker Hughes' performance in the third quarter reflects its strategic focus on operational efficiency and market expansion. The company's ability to exceed EPS expectations despite revenue challenges highlights its resilience in a competitive industry. However, the sequential decline in revenue and orders indicates potential headwinds that may require strategic adjustments.
Overall, Baker Hughes Co (BKR, Financial) continues to demonstrate strong financial health and strategic foresight, positioning itself well for future growth in the energy sector.
Explore the complete 8-K earnings release (here) from Baker Hughes Co for further details.
