Baker Hughes tops Q3 profit and revenue estimates on Chart deal

Baker Hughes Company (BKR) said on Oct. 27 that third-quarter adjusted earnings and revenue topped analyst estimates, as orders rose and the company completed its Chart Industries acquisition. Shares were little changed in after-hours trading as of 6:08 p.m. ET.

Baker Hughes is an energy technology company that provides solutions to energy and industrial customers in over 120 countries, according to the release.

Adjusted diluted earnings per share were 70 cents, topping the 62-cent consensus estimate compiled by Finnhub. Revenue of $8.03 billion also topped the $7.78 billion estimate.

Here's how the company did:

• Adjusted EPS: 70 cents vs. 62 cents expected, according to Finnhub
• Revenue: $8,025 million vs. $7,010 million a year earlier
• GAAP diluted EPS: 41 cents vs. 61 cents a year earlier
• Adjusted EBITDA: $1,415 million vs. $1,238 million a year earlier
• Free cash flow: $769 million vs. $699 million a year earlier

Revenue rose 14% from a year earlier, mainly because of the Chart acquisition. The company said it acquired Chart on July 16. Orders were $10,764 million, up 31% from a year earlier.

Segment results

Industrial & Energy Technology (IET) orders were $5,886 million, up 42% from a year earlier. IET revenue was $3,477 million, up 3% from a year earlier.

Venture Global awarded Baker Hughes an order for the Cloud Connector Pipeline project, including 13 Frame 5/2E gas turbine-driven compression systems. A separate IET order covers 1.1 gigawatts of power for a U.S. technology company, including 43 NovaLT and Frame 5 gas turbine packages.

Oilfield Services & Equipment (OFSE) revenue was $3,660 million, up 1% from a year earlier. Segment EBITDA was $659 million, compared with $671 million a year earlier.

Chart, which the company acquired on July 16, booked $831 million of orders and generated $888 million of revenue from the acquisition date through the end of the quarter. Its segment EBITDA was $156 million.

Orders and backlog

Remaining performance obligations were $46.4 billion at the end of the quarter, up $6.4 billion from the second quarter. IET remaining performance obligations were $39.4 billion.

The company raised its Horizon 2 IET order outlook to $50 billion plus, from more than $45 billion it gave on July 27, according to the release. Horizon 2 covers 2026 to 2028.

Simonelli said, "The resulting backlog growth provides greater revenue visibility while expanding our installed base and long-term aftermarket opportunity."

Costs and charges

GAAP net income attributable to Baker Hughes was $411 million, compared with $609 million a year earlier. Interest expense, net was $177 million, compared with $56 million a year earlier.

Other expense, net was $157 million, primarily from transaction-related costs tied to business disposals and acquisitions. Restructuring charges were $28 million in the quarter.

Operating cash flow was $1,005 million, and free cash flow was $769 million, compared with $699 million a year earlier.