10-QPeriod: Q1 FY2023

Baker Hughes Co Quarterly Report for Q1 Ended Mar 31, 2023

Filed April 19, 2023For Securities:BKR

Summary

Baker Hughes Company reported a significant increase in revenue and net income for the first quarter of 2023 compared to the same period in 2022. Total revenue rose to $5.72 billion from $4.84 billion, driven by higher activity in both the Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments. Net income attributable to Baker Hughes Company surged to $576 million ($0.57 per diluted share) from $72 million ($0.08 per diluted share). The company benefited from a substantial gain of $392 million from the change in fair value of certain equity investments, which significantly boosted other non-operating income. The OFSE segment showed strong growth, with revenue up 19% and operating income increasing considerably due to higher volume and pricing. The IET segment also saw revenue growth of 18%, though its operating income remained flat year-over-year due to inflationary pressures and higher R&D costs. The company maintained a strong balance sheet with $2.4 billion in cash and cash equivalents and an undrawn revolving credit facility, demonstrating solid liquidity.

Financial Highlights

41 data points
Beta

Revenue

$5.72B

Net Income

$576.00M

10.1% Net Margin

Total Assets

$35.04B

Cash & Equivalents

$2.42B

Free Cash Flow

$461.00M

Financial Statements
Beta
Revenue$5.72B
SG&A Expenses$655.00M
Operating Expenses$5.28B
Operating Income$438.00M
Net Income$576.00M

Key Highlights

  • 1Total revenue increased by 18% year-over-year to $5.72 billion.
  • 2Net income attributable to Baker Hughes Company dramatically increased to $576 million, or $0.57 per diluted share, compared to $72 million, or $0.08 per diluted share, in Q1 2022.
  • 3Operating income improved to $438 million from $279 million, driven primarily by the OFSE segment.
  • 4The company recorded a significant non-operating gain of $392 million from the change in fair value of equity investments.
  • 5Both the Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments experienced revenue growth.
  • 6Cash flow from operating activities was robust, reaching $461 million, a substantial increase from $72 million in the prior year's quarter.
  • 7The company maintains strong liquidity with $2.4 billion in cash and cash equivalents and no borrowings on its $3 billion revolving credit facility.

Frequently Asked Questions

The substantial increase in net income was primarily driven by a strong operational performance across both segments, leading to higher revenue and operating income. Additionally, a significant non-operating gain of $392 million from the change in fair value of certain equity investments greatly contributed to the net income.

The OFSE segment demonstrated robust growth, with revenue increasing by 19% year-over-year to $3.58 billion. This was largely due to increased activity both in North America and internationally, supported by higher global rig counts. Operating income for OFSE saw a significant rise, driven by higher volumes and pricing, despite some offset from cost inflation.

Baker Hughes maintains a strong liquidity position with $2.4 billion in cash and cash equivalents as of March 31, 2023. The company also has a $3 billion revolving credit facility, on which there were no borrowings outstanding at the end of the quarter, indicating ample financial flexibility.

Baker Hughes expects the global oil markets to tighten throughout 2023, supported by China's recovery and OPEC+ actions. The company sees the current spending cycle as more durable than previous ones, with a continued shift towards natural gas and LNG projects. While anticipating potential economic volatility, the company believes its diversified portfolio is well-positioned to navigate these conditions and benefit from long-term energy demand.