Baker Hughes Company Q3 2024 Earnings Call Highlights

Baker Hughes Company (NASDAQ:BKR) announced a record quarterly EBITDA during its Third Quarter 2024 Earnings Call, demonstrating strong financial performance and strategic growth across its segments: Integrated Energy Technology (IET) and Oilfield Services & Equipment (OFSE).

The company reported a 20% year-on-year EBITDA growth for the third consecutive quarter, with EBITDA margins reaching 17.5%, the highest since 2017. There was robust demand for gas infrastructure and new energy projects, aiding a positive outlook.

Key Takeaways

• Record quarterly EBITDA with a 20% year-on-year growth.
• EBITDA margins at 17.5%, the highest since 2017.
• $2.9 billion in orders for the IET segment for the eighth consecutive quarter.
• Free cash flow of $754 million, with plans to return 60% to 80% to shareholders.
• 20% growth in natural gas demand anticipated by 2040, focusing on mature asset solutions.
• Stable global upstream spending forecast for 2025 and $6-$7 billion in new energy orders expected by 2030.
• Gas infrastructure project awards are significant, with non-LNG gas technology orders expected to double from 2023 levels.

Company Outlook

• Baker Hughes aims to exceed the record of 84 MTPA set in 2022, expecting 100 MTPA of FIDs between 2024-2026.
• The company is focusing on leveraging mature asset solutions to drive growth through the expected 20% rise in natural gas demand by 2040.

Financial Performance

• Year-to-date 2024 orders at $9.2 billion.
• Anticipated slight dip in gas infrastructure orders in 2025.
• Strong momentum for gas infrastructure projects with significant awards secured.
• Q3 revenue slightly missed estimates due to project delays; recovery expected in Q4 and Q1.

Insights from InvestingPro

• Baker Hughes has maintained dividend payments for 38 consecutive years, reinforcing its commitment to shareholder value.
• The company's market cap stands at $35.74 billion, with a P/E ratio of 19.66.

Summary

Baker Hughes delivered strong Q3 2024 results with record EBITDA growth, driven by demand in gas infrastructure and new energy, with optimistic future targets.