Baker Hughes Company BKR reported third-quarter 2024 adjusted earnings of 67 cents per share, which beat the Zacks Consensus Estimate of 60 cents. The bottom line also improved from the year-ago level of 42 cents.

Total quarterly revenues of $6,908 million missed the Zacks Consensus Estimate of $7,193 million. However, the top line increased from the year-ago quarter’s $6,641 million.

The strong quarterly earnings were primarily driven by higher operational performance across both segments and improving EBITDA margins, which reached 17.5%, the highest since the company's formation.

Baker Hughes Company Price, Consensus and EPS Surprise

Baker Hughes Company price-consensus-eps-surprise-chart | Baker Hughes Company Quote

Segmental Performance

BKR was reorganized from four to two operating segments — Oilfield Services and Equipment, and Industrial & Energy Technology. The segments became operational from Oct. 1, 2022.

Revenues from the Oilfield Services and Equipment unit amounted to $3,963 million, up from the year-ago figure of $3,951 million. The reported figure was below our estimate of $4,138 million.

Operating income from the segment totaled $547 million, up 18% from $465 million reported in the third quarter of 2023. This growth was supported by favorable pricing and productivity, partially offset by a lower volume.

Revenues from the Industrial & Energy Technology unit amounted to $2,945 million, up 9% from the year-ago quarter’s $2,691 million. Our estimate for the metric was pegged at $3,110 million.

Operating income from the segment totaled $474 million, up 37% from the year-ago quarter’s level of $346 million due to higher volumes and pricing, partially offset by cost inflation.

Costs and Expenses

Baker Hughes recorded total costs and expenses of $5,978 million in the third quarter, up from the year-ago figure of $5,927 million. Our projection for the same was pinned at $6,423 million.

Orders

Orders from all business segments amounted to $6,676 million, down 22% year over year from $8,512 million. We expected the figure to be $7,901 million.

The drop was primarily due to lower order intake in the Industrial & Energy Technology and the Oilfield Services and Equipment segments.

Free Cash Flow

Baker Hughes generated a free cash flow of $754 million in the reported quarter compared with $592 million a year ago.

Capex & Balance Sheet

BKR’s net capital expenditure in the third quarter was $256 million.

As of Sept. 30, 2024, it had cash and cash equivalents of $2,664 million. The company had a long-term debt of $5,984 million at the end of the reported quarter, marking a debt-to-capitalization of 27.3%.