Baker Hughes Company

What they do

Baker Hughes operates two segments: Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET). OFSE serves upstream oil and gas customers with drilling, evaluation, completion, and production products and services. IET provides gas turbines, compressors, and related services for LNG, gas infrastructure, power generation, and industrial applications.

Revenue drivers

• IET Equipment Orders — IET orders were $7.1 billion in Q2 2026, doubling year-over-year, driven by power systems and LNG; IET revenue was roughly flat year-over-year at about $3.6 billion.
• Gas Technology Services (GTS) — GTS revenue increased 11% (up $79 million) in Q2 2026, contributing to IET's year-over-year flat performance.
• OFSE Revenue — OFSE revenue decreased 5% year-over-year in Q2 2026 to about $3.1 billion, impacted by the Surface Pressure Control disposition and lower international revenue.
• New Energy Solutions — Includes hydrogen, CCUS, geothermal, and clean power; Climate Technology Solutions revenue grew 31% (up $49 million) in Q2 2026.

Recent performance

In Q2 2026, Baker Hughes reported revenue of $6.7 billion, down 2% year-over-year, and attributable net income of $681 million, roughly flat. Adjusted EBITDA was $1,231 million, exceeding guidance; operating cash flow was $1,345 million. GAAP diluted EPS was $0.68, while adjusted diluted EPS was $0.64. Orders reached $10.5 billion, including a record IET RPO of $37.1 billion.

Strategy

The company is executing on three pillars: transforming the core to improve margins and cash flow, driving profitable growth in LNG, gas infrastructure, power generation, data centers, and industrial manufacturing, and delivering results in new energy. Management emphasizes portfolio management, including the completed Chart Industries acquisition (enterprise value ~$13.6 billion) and the announced sale of Waygate Technologies for ~$1.45 billion. The company is expanding capacity in response to strong demand, particularly in power generation.

Risks

• Geopolitical disruption in the Middle East — Disruptions, including in the Strait of Hormuz, may impact customer spending, project timing, and supply chain visibility.
• Downstream oil price weakness — A decline in oil prices could lead to reduced upstream spending, particularly in North America and international markets.
• Integration risk from Chart acquisition — The large acquisition may pose execution, integration, or financing risks.
• Competitive technology pressure — Failure to deliver competitive and innovative technology on schedule and cost could hurt market share and pricing.

Outlook

Management expects upstream spending to improve in the remainder of 2026, with a decline in Middle East spending but broadly stable North American and international spending. IET order guidance has been raised, with Horizon 2 (2026-2028) IET orders outlook increased to more than $45 billion. The company expresses confidence in achieving the midpoint of full-year guidance.