Order Booking Shrank But Large Projects Arrived: BKR’s total book-to-bill ratio remained unchanged at 1x in Q1 2024 compared to Q4 2023. It received multi-year awards for onshore and offshore services from Petrobras in Brazil. It will use its advanced rotary steerable service Lucida in three contracts in the US onshore. It received orders for Saudi Arabia’s Master Gas System project (or MGS3) to supply centrifugal compressors. In Canada, it received an order for an electric-driven liquefaction technology solution. It secured three onshore and offshore production orders in Abu Dhabi. Total orders in the IET segment amounted to $2.9 billion in Q1.

In the Climate Technology Solutions (or CTS) business, BKR  received an award from Snam for compression trains driven by hydrogen-ready turbines to support a new gas compressor station in Italy. It also secured a CTS order to refurbish steam turbines and centrifugal compressor trains. Cordant, the company’s digital solutions, received several multi-year awards in the Middle East and Latin America.

Revenue And Margin Weakened In Q1: In the Industrial & Energy Technology segment, revenues decreased by 8% quarter-over-quarter, while operating profit fell by 20%. The revenue visibility is not encouraging either, as order booking decreased by 4% in Q1. The financial results in the Oilfield Services & Equipment segment also weakened in Q1. Order booking declined (6% down) in this segment. Lower revenues from North America and volume decline in Latin America, the Middle East, and Asia caused the financial results to deteriorate.

Despite the setback in Q1 on a quarter-over-quarter basis, the company’s management plans to achieve its full-year guidance as momentum from FY2023 builds into 2024.

Cash Flow Growth; Unchanged Leverage: BKR’s cash flow from operations increased by 70% in Q1 2024 compared to a year ago. Its FCF increased by 2x during this period. Debt-to-equity (0.39x) remained unchanged compared to December 31, 2023. 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.