Baker Hughes In Q4: TAKE THREE

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Q4 Order Booking Summary: Baker Hughes's (BKR) FY 2024 orders totaled $28 billion, led by an impressive order growth in the Industrial & Energy Technology (or IET) segment, while its total book-to-bill ratio was unchanged at 1.0x in Q4 2024 compared to Q3. During Q4, its Gas Technology Equipment continued to secure orders, including gas infrastructure orders for a Jafurah unconventional gas field in Saudi Arabia for Aramco. In LNG, it received multiple project awards. This included a contract to provide a modularized LNG system and power island to Venture Global. Another award includes providing refrigeration compressors and expander compressors. Its Gas Technology Services business signed a 25-year services agreement with a NextDecade affiliate.

In the Oilfield Services & Equipment segment, BKR received a multi-year contract from Eni to utilize its AutoTrak eXact rotary steerable drilling system. In the Middle East, it plans to provide artificial lift services. In Brazil, it received a flexible pipe systems award from Petrobras. In digitalization and artificial intelligence, it signed an agreement to launch the AI Rate of Penetration.

Revenue Strengthened In Q4 : In the IET segment, revenues increased by 19% quarter-over-quarter, driven primarily by Gas Technology. Operating profit went up by 23% in Q4. Higher sales volume in the GTE business and a favorable impact on pricing and productivity led to better financial performance in this segment. Revenues in the Oilfield Services & Equipment segment were relatively weak in Q4. In Europe, CIS, and Sub-Saharan Africa, sales declined. Lower volume affected profitability. However, better pricing and productivity from structural cost-out initiatives partially offset the downside.

During Q4, BKR's EBITDA margin progressed to achieve its 20% target. The company's management expects to achieve this by 2026. It also expects "2025 to demonstrate another strong year of EBITDA growth, led by our IET segment."

Cash Flow Stabilized; Leverage Improved : BKR's cash flow from operations increased by 9% in FY 2024 compared to a year ago. Its FCF increased by 12% during this period. Debt-to-equity (0.35x) improved compared to December 31, 2023. During FY 2024, It repurchased shares worth $484 million. 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.

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