Strong International Order Booking: BKR’s total book-to-bill ratio improved to 1.3x in Q3 from 1.2x in Q2 as orders grew by 14%. Some prominent oil & gas orders include a subsea equipment order in offshore Angola, two major multi-year contracts in the North Sea, and a long-term directional drilling services contract in the Middle East. In LNG, it received a Gas Technology Equipment contract for modularized LNG systems and a contract in Latin America for an FPSO. During the quarter, it also received front-end engineering and design and carbon capture and storage awards, hydrogen projects, and asset strategy consulting services in mining, specialty chemicals, and renewables.
Management Holds A Cautious Outlook As Revenue And Profit Improved In Q3: The management recognized the “economic uncertainty and geopolitical risk” in the crude oil market. However, it also expects the “LNG project pipeline to remain strong, both in the U.S. and internationally.”
Steady revenues from international geographies (except Latin America) and resilient North American sales led to revenues ticking up marginally in the OFSE segment in Q3. Operating profit increased by 11%. Revenues from the IET segment increased more sharply, by 10%, compared to a quarter ago, while the operating profit recorded a growth similar to the OFSE segment. A continued impetus from Gas Technology-related products and services helped the sales and profit growth in Q3.
Impressive Cash Flow Growth While Balance Sheet Stays Stable: BKR’s cash flow from operations more than doubled in 9M 2023 compared to a year ago. Its FCF increased tremendously compared to a year ago. Debt-to-equity (0.43x) remained nearly unchanged from a quarter ago. You may read more about the company in our previous article here.
Thanks for reading the BKR Take Three, designed to give you three critical takeaways from BKR’s earnings report. Soon, we will present a second update on BKR earnings, highlighting its current strategy, news, and notes we extracted from our deeper dive.
