Baker Hughes (BKR) Q3 2024 earnings summary

Executive summary

• Achieved record quarterly adjusted EBITDA of $1,208 million and highest margins since 2017, with both IET and OFSE segments showing strong margin expansion and operational excellence.

• Revenue rose 4% year-over-year to $6.91 billion, driven by strong IET performance and robust OFSE results.

• Orders totaled $6.7 billion, with IET orders at $2.9 billion and RPO at $33.4 billion, reflecting strong end-market diversity.

• Free cash flow was $754 million for the quarter, with $361 million returned to shareholders, including $152 million in share repurchases.

• Major contract wins in LNG, FPSO, gas infrastructure, and digital solutions, including the largest ICL compressor award for Dubai Petroleum and collaborations with Repsol.

Financial highlights

• Q3 2024 revenue was $6.91 billion, up 4% year-over-year; adjusted EBITDA was $1,208 million (17.5% margin), up 23% year-over-year.

• Net income attributable to Baker Hughes was $766 million; GAAP diluted EPS was $0.77, adjusted EPS was $0.67, up 59% year-over-year.

• IET revenue was $2.95 billion, up 9% year-over-year; IET EBITDA was $528 million (17.9% margin), with record RPO of $30.2 billion.

• OFSE revenue was $3.96 billion; OFSE EBITDA was $765 million (19.3% margin), highest since merger.

• Net debt at September 30, 2024 was $3.37 billion; liquidity of $5.7 billion; net debt/EBITDA at 0.8x.

Outlook and guidance

• Full year 2024 revenue expected at $27.35–$27.85 billion; adjusted EBITDA guidance midpoint unchanged at $4.45–$4.60 billion.

• Fourth quarter total EBITDA expected at $1.26 billion midpoint; IET EBITDA at $590 million, OFSE at $750 million.

• Both IET and OFSE segments are targeting 20% EBITDA margins by 2026, with high-teen margins already achieved.

• Management remains confident in achieving full-year EBITDA guidance and continued growth in LNG and new energy markets.

• OFSE North America activity remains subdued, while international growth is decelerating but positive.