01—Abstract
Summary
Summary of the 10-K filed February 5, 2024. Cited figures are marked; the original filing is the authoritative source.
Baker Hughes Company reported a strong performance in 2023, driven by significant revenue growth and improved profitability.
The company's revenue increased by 21% to $25.5 billiona, primarily due to higher volumes in both the Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments. This growth was supported by robust demand in LNG projects and increased activity in OFSE, reflecting favorable market conditions and successful execution of cost-out initiatives. The company's strategic focus on transforming its core business, investing for growth in high-potential markets, and positioning for new energy frontiers is showing positive results.
Baker Hughes is emphasizing innovation, investing heavily in R&D, and expanding its portfolio in areas like new energy solutions, including hydrogen, geothermal, and CCUS. The company returned $1.3 billionb to shareholders through dividends and share repurchases in 2023, demonstrating a commitment to shareholder value while continuing to invest in strategic acquisitions and operational improvements.
02—Key points
Key Highlights
- Revenue increased by 21% year-over-year to $25.5 billion in 2023, driven by strong performance in both OFSE and IET segments.
- Segment operating income saw a significant increase, with OFSE up 45% and IET up 15%, reflecting improved margins and operational efficiencies.
- The company demonstrated a strong commitment to returning capital to shareholders, distributing $1.3 billion through dividends and share repurchases in 2023.
- Baker Hughes continues to invest in innovation and future growth, with $658 million spent on R&D in 2023, focusing on new energy technologies and digital solutions.
- Remaining Performance Obligations (RPO) stood at $33.5 billion at year-end 2023, providing substantial revenue visibility for future periods.
- The company successfully integrated the acquisition of Altus Intervention, strengthening its OFSE segment's well intervention capabilities.
- Despite broader economic uncertainties, Baker Hughes expressed optimism for the outlook in key areas like international OFSE activity and LNG projects.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 5, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $25.51B$21.16B | +20.6% |
| R&D Expenses | $651.00M$552.00M | +17.9% |
| SG&A Expenses | $2.61B$2.51B | +4.0% |
| Operating Expenses | $23.19B$19.97B | +16.1% |
| Operating Income | $2.32B$1.19B | +95.5% |
| Net Income | $1.94B-$601.00M | +423.3% |
| EPS (Basic) | $1.93$-0.61 | +416.4% |
| EPS (Diluted) | $1.91$-0.61 | +413.1% |
05—Questions
Frequently Asked Questions
What was Baker Hughes' financial performance in 2023?
Baker Hughes reported a significant improvement in its financial performance for 2023. Revenue increased by 21% to $25.5 billion, driven by growth in both the Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments. Net income attributable to Baker Hughes Company was $1.94 billion, a substantial increase from a net loss of $601 million in 2022. This improved profitability was attributed to higher volumes, pricing gains, and cost-out initiatives.
How is Baker Hughes addressing the energy transition?
Baker Hughes is actively participating in the energy transition through strategic investments and portfolio development. Its strategy includes investing in new energy frontiers such as hydrogen, geothermal, and carbon capture, utilization, and storage (CCUS). The company is developing and offering technologies and services that aim to reduce carbon emissions and improve energy efficiency across various industrial sectors.
What is the company's outlook for 2024?
Baker Hughes anticipates a balanced outlook for 2024, with continued strength expected in international OFSE activity and LNG projects. While acknowledging ongoing economic uncertainties and geopolitical risks, the company sees a multi-year upstream spending cycle as durable, particularly in international and offshore markets. They expect continued growth in new energy solutions as these become a more integral part of the energy mix.
How does Baker Hughes manage its financial resources and return capital to shareholders?
Baker Hughes maintains a flexible capital allocation policy. In 2023, the company returned $1.3 billion to shareholders through dividends and share repurchases. They also made strategic acquisitions, such as Altus Intervention, to enhance their portfolio. The company has access to a $3 billion revolving credit facility and sufficient liquidity to fund its operations, capital expenditures, and shareholder returns.
06—Continue