Order Booking Shrank But New Projects Arrived: BKR’s total book-to-bill ratio deteriorated to 1x in Q4 from 1.3x in Q3 as orders shrank in both operating segments during Q4. Despite that, it recorded some key projects. It received $1 billion in contractual service agreements for the North American and Middle Eastern offshore projects. It booked a 9.6 MTPA LNG project in the UAE, one of the first all-electric LNG projects in the Middle East. The company received an award to provide turbogenerators, turbocompressors, and related parts to an FPSO. It bagged a Climate Technology Solutions order in the UK in new energy. It deployed its first geothermal application in the Middle East, boosting the company’s various initiatives in the geothermal application space.
Management Focused On Cost Structure In Q4: In Q4, BKR’s primary objective was to streamline its operating segments and lower the cost structure. With continued operational improvement, it realized $150 million of cost-out. It looks to “drive margins meaningfully higher” in the coming quarters.
Steady revenue growth in Gas Technology Equipment and Climate Technology Solutions led to a 7% topline rise in the Industrial & Energy Technology segment in Q4 compared to Q3. Operating profit increased by 19% here. However, the outlook for the segment is less rosy as order booking decreased severely (30% down) in Q4. In comparison, the financial results in the Oilfield Services & Equipment segment did not produce much changes in Q4. Lower revenues from North America were offset by higher volume in international operations. Improved pricing and cost productivity pulled the segment operating higher, though.
Impressive Cash Flow Growth While Leverage Falls: BKR’s cash flow from operations increased by 62% in FY2023 compared to a year ago. Its FCF more than doubled during this period. Debt-to-equity (0.39x) decreased considerably from a year ago (0.46x). 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.
