Baker Hughes Company (BKR)

Baker Hughes Company Q1 2025 Financial Report

Report Date: 2025-04-30
Period Covered: Q1 2025
Form Type: 10-Q

Executive Summary

• Total Revenue: $6.427 billion (+0.1% YoY)
• Net Income Attributable: $402 million (–11.6% YoY)
• Total Debt: $6.024 billion (+0.02% vs Q4 2024)
• Operating Cash Flow: $709 million (–9.6% YoY)

Profit and Loss Analysis

The company delivered flat top-line growth but lower earnings due to:

• Non-operating losses: A $140 million fair-value write-down on equity securities versus a $27 million gain in Q1 2024.
• Segment dynamics: Strong IET volume/margin gains offset by OFSE revenue declines.
• Cost control: SG&A reduced by $41 million and R&D by $18 million, partly offset by inflationary pressures.

Debt and Liquidity Analysis

• Total debt at quarter-end was $6.024 billion, effectively flat with a 0.02% increase from December 2024.
• Undrawn $30 billion revolver maturing 2028 supports liquidity.
• Cash & equivalents of $3.277 billion, with $2.7 billion held overseas.

Capital Allocation

• Dividends: $229 million paid (23¢/share).
• Share Repurchases: $188 million (4.4 million shares).
• CapEx: $300 million, aligned with revenue.

Pros and Cons

Pros

• Accelerating IET growth (+11.2% YoY) with robust margins.
• Strong cash flow generation and disciplined capital returns.
• Balanced portfolio spanning traditional O&G and new-energy solutions.

Cons

• OFSE downturn (–7.6% YoY) driven by lower rig counts.
• Earnings pressure from equity-security revaluations and macro uncertainties.
• Exposure to oil-price volatility and geopolitical risks.

Conclusion

Baker Hughes remains financially solid, with a stable balance sheet and increasing free cash flow dedicated to dividends and buybacks. Continued diversification into industrial energy technology and new-energy solutions positions the company for mid-term growth, although cyclical headwinds in oilfield services and market volatility remain risks.

Revenue by segment and product line (Q1 2025 vs Q1 2024):

• Oilfield Service Equipment (OFSE): $3.499 B (–7.6%) – Well Construction: $892 M (–15.9%) – Completions & Intervention: $925 M (–8.1%) – Measurement & Production Solutions: $899 M (–4.9%) – Subsea & Surface Pressure Systems: $782 M (+1.4%)

• Industrial Energy Technology (IET): $2.928 B (+11.2%) – Gas Technology Equipment: $1.456 B (+20.3%) – Gas Technology Service: $592 M (–3.6%) – Industrial Products & Solutions: $703 M (–3.4%) – Climate Technology Solutions: $178 M (n/m)

Geographic OFSE revenue (Q1 2025):
• North America: $922 M (–6.8%)
• Latin America: $568 M (–10.7%)
• Europe/CIS/Africa: $580 M (–22.7%)
• Middle East/Asia: $1.429 B (+1.7%)

Remaining Performance Obligations: $332 billion (15-year weighted recognition period)

Baker Hughes is shifting its growth trajectory toward higher-margin IET operations, capitalizing on sustained LNG and new-energy demand. Its balance sheet is robust, with flat debt levels and strong liquidity to navigate cyclical oilfield service downturns. Key indicators: stable operating cash flow conversion, disciplined cap-returns, and technological diversification. Potential challenges include oil-price volatility, supply-chain constraints in aeroderivatives, and equity-security valuation swings. Opportunities lie in expanding decarbonization solutions (carbon capture, hydrogen, geothermal) and leveraging digitalization across the energy value chain.