Baker Hughes Company
BKR · Nasdaq
Sep 2026
Next quarter
Reports Oct 22, 2026.
Consensus is $0.59 EPS for Sep 2026 across 6 estimates, ranging $0.51 to $0.71.
BKR Jun 2026
- 25.49%
- +5.83%
- $0.51
- $0.64
- —
- $6.74B
Reported results
- $6.74B
- $681.00M
Highlights
- Earnings beat: Adjusted diluted EPS was $0.64 versus the $0.51 consensus, a 25.5% surprise; GAAP diluted EPS was $0.68.
- IET orders: Industrial & Energy Technology orders reached a record $7.1 billion, up 45% sequentially and more than double year-over-year, led by gas technology equipment.
- Backlog: Total remaining performance obligations rose $4.0 billion sequentially to a record $40.1 billion, including $37.1 billion in IET.
- Cash generation: Operating cash flow was $1.345 billion and free cash flow was $1.109 billion, versus $500 million and $210 million, respectively, in the prior quarter.
- Underlying profitability: Adjusted EBITDA increased 6% sequentially to $1.231 billion and 2% year-over-year, above the high end of company guidance.
- Revenue and net income: Revenue was $6.742 billion, up 2% sequentially but down 2% year-over-year; attributable net income was $681 million versus $930 million in Q1 and $701 million a year earlier.
- OFSE resilience: Oilfield Services & Equipment revenue increased 7% sequentially to $3.451 billion and EBITDA rose 7% to $605 million, despite Middle East disruption and inflation.
- Chart acquisition: Baker Hughes completed the $13.6 billion enterprise-value acquisition of Chart Industries on July 16, funded with cash, new notes and term loans.
- Portfolio actions: Baker Hughes agreed to sell Waygate Technologies to Hexagon for approximately $1.45 billion in cash and raised its full-year IET orders guidance, with Horizon 2 IET orders now expected to exceed $45 billion.
Analysis
Baker Hughes delivered a solid second quarter, with adjusted EPS of $0.64 beating the $0.51 consensus by 25.5%. Revenue of $6.742 billion rose 2% from Q1 but declined 2% from $6.910 billion a year ago, while attributable net income of $681 million fell 27% sequentially and 3% year-over-year. The cleaner operating picture was better than the GAAP comparison suggests: adjusted net income rose 12% sequentially to $640 million and 3% year-over-year, while adjusted EBITDA reached $1.231 billion, up 6% sequentially and 2% year-over-year.
The defining feature was IET demand. Orders of $7.088 billion increased 45% sequentially and 101% year-over-year, producing a 2.2 book-to-bill ratio and lifting IET RPO to a record $37.1 billion. Gas technology equipment orders were $4.913 billion, supported by LNG, power generation and data-center demand. Cash conversion was also unusually strong, with $1.345 billion of operating cash flow and $1.109 billion of free cash flow. Against that strength, OFSE remained exposed to Middle East disruption and portfolio dispositions, with revenue down 5% year-over-year and EBITDA down 11%. The quarter also preceded the closing of the Chart acquisition, which expands the portfolio but materially increases debt and integration demands.
IET orders and backlog
- Record bookings: IET orders were $7.088 billion, up $2.201 billion, or 45%, from Q1 and $3.558 billion, or 101%, from Q2 2025. The total company book-to-bill ratio was 1.6, while IET reached 2.2.
- Gas infrastructure: Gas technology equipment orders were $4.913 billion, up from $1.824 billion in Q1 and $781 million a year earlier. Gas technology services orders were $1.314 billion, up 35% sequentially and 33% year-over-year.
- Long-duration visibility: Total RPO increased $4.0 billion sequentially to $40.1 billion, with IET contributing $37.1 billion and OFSE $3.0 billion. Management expects to recognize approximately 53% of RPO within two years and 76% within five years.
- Guidance signal: Baker Hughes raised its full-year IET orders guidance and increased its 2026-2028 IET orders outlook to more than $45 billion, citing broadening demand across LNG, power generation, data centers and industrial infrastructure.
Earnings and segment mix
- Consolidated result: Revenue was $6.742 billion, compared with $6.587 billion in Q1 and $6.910 billion a year earlier. GAAP net income attributable to Baker Hughes was $681 million, versus $930 million in Q1 and $701 million in Q2 2025.
- Operating improvement: Adjusted EBITDA was $1.231 billion, up from $1.158 billion in Q1 and $1.212 billion a year earlier. Price, productivity, cost-out initiatives and foreign exchange outweighed inflation and lower volume.
- IET profitability: IET revenue was $3.291 billion, essentially flat year-over-year, but EBITDA rose 16% to $678 million and margin expanded to 20.6% from 17.8%. Higher services, industrial products and climate technology revenue offset lower equipment revenue and the PSI disposition.
- Earnings quality: Adjusted net income was $640 million, up 12% sequentially and 3% year-over-year. GAAP results included a $125 million gain from changes in equity security values, $30 million of transaction costs and $11 million of restructuring charges.
OFSE execution
- Sequential recovery: OFSE revenue increased 7% sequentially to $3.451 billion and EBITDA rose 7% to $605 million, with higher volume, pricing, cost actions and foreign exchange supporting the result.
- International exposure: International revenue rose 9% sequentially to $2.518 billion, including a 22% increase in Latin America and a 6% increase in Middle East/Asia. North America revenue was $933 million, up 1% sequentially.
- Year-over-year pressure: OFSE revenue declined 5% year-over-year and EBITDA fell 11% to $605 million. The comparison reflected the Surface Pressure Control disposition, Middle East disruption, lower volume and inflation; the Subsea & Surface Pressure Systems product line was down 14% in revenue to $678 million.
- Forward view: Management expects improvement in global upstream spending through the rest of 2026, but acknowledged that Middle East uncertainty could affect customer spending, project timing and supply-chain visibility.
Chart and portfolio reshaping
- Chart closing: Baker Hughes completed the acquisition of Chart Industries on July 16 for $210 per share and an enterprise value of approximately $13.6 billion, after the quarter ended. Chart adds thermal management, air and gas handling, compression, lifecycle services and exposure to industrial and energy markets.
- Funding and leverage: The acquisition was funded with cash on hand, the March offering of $6.5 billion of U.S. notes and €3.0 billion of euro notes, plus two $1.0 billion term loans entered into on July 15. Total debt stood at $16.253 billion at June 30, versus $6.087 billion at December 31, 2025.
- Waygate sale: Baker Hughes agreed to sell Waygate Technologies to Hexagon for approximately $1.45 billion in cash before customary adjustments. Waygate had $873 million of assets and $281 million of liabilities classified as held for sale at June 30.
- Strategic rationale: The transactions continue Baker Hughes’ shift toward a broader industrialized energy-technology portfolio, while increasing the importance of Chart integration, debt management and realization of recurring aftermarket opportunities.
Cash flow and liquidity
- Strong conversion: Operating cash flow was $1.345 billion and free cash flow was $1.109 billion, compared with $500 million and $210 million in Q1 and $510 million and $239 million a year earlier.
- Working capital support: Six-month operating cash flow reached $1.845 billion, helped by $350 million of working-capital cash generation, primarily from progress collections. Progress collections and deferred income increased to $6.598 billion at June 30 from $5.904 billion at year-end.
- Capital spending: Second-quarter capital expenditures net of asset-disposal proceeds were $236 million, including $135 million for OFSE and $85 million for IET. The company expects 2026 capital spending at a rate of up to 5% of annual revenue.
- Balance-sheet position: Cash and equivalents were $15.727 billion at June 30, up from $3.715 billion at December 31, although the cash balance and debt structure were positioned to fund the Chart acquisition. Baker Hughes paid $228 million of dividends in the quarter and repurchased no shares.
