10-QPeriod: Q1 FY2024

Baker Hughes Co Quarterly Report for Q1 Ended Mar 31, 2024

Filed April 24, 2024For Securities:BKR

Summary

Baker Hughes Company reported a solid first quarter for 2024, with total revenue increasing by 12% year-over-year to $6.4 billion. This growth was primarily driven by higher volumes in the Industrial & Energy Technology (IET) segment, particularly in Gas Technology Equipment, and improved activity in the Oilfield Services & Equipment (OFSE) segment. Despite the revenue growth, income before taxes decreased by $119 million, largely due to a significant year-over-year drop in the gain from equity securities. The company also highlighted its commitment to returning capital to shareholders, increasing its quarterly dividend and returning a total of $368 million through dividends and share repurchases in the quarter. Baker Hughes remains optimistic about the energy markets, expecting continued upstream spending growth, especially in international and offshore areas, and a strong outlook for LNG projects, while also acknowledging geopolitical uncertainties.

Financial Highlights

42 data points
Beta

Revenue

$6.42B

Net Income

$455.00M

7.1% Net Margin

Total Assets

$37.14B

Cash & Equivalents

$2.72B

Free Cash Flow

$784.00M

Financial Statements
Beta
Revenue$6.42B
R&D Expenses$164.00M
SG&A Expenses$618.00M
Operating Expenses$5.76B
Operating Income$653.00M
Net Income$455.00M

Key Highlights

  • 1Total revenue for Q1 2024 rose 12% to $6.4 billion compared to Q1 2023, driven by higher volumes in IET and OFSE.
  • 2Income before taxes decreased by $119 million, primarily due to a lower gain on equity securities compared to the prior year.
  • 3Operating income for OFSE increased by $50 million, and for IET by $89 million, reflecting improved segment performance.
  • 4The company returned $368 million to shareholders in Q1 2024 through dividends ($210 million) and share repurchases ($158 million).
  • 5Baker Hughes increased its quarterly dividend by one cent to $0.21 per share.
  • 6Remaining Performance Obligations (RPO) stood at $32.7 billion as of March 31, 2024, indicating strong future revenue potential.
  • 7Cash flow from operating activities was robust, generating $784 million in Q1 2024, a significant increase from $461 million in Q1 2023.

Frequently Asked Questions

Revenue growth was primarily driven by increased volume in the Industrial & Energy Technology (IET) segment, specifically from Gas Technology Equipment project backlog execution, and improved activity in the Oilfield Services & Equipment (OFSE) segment.

The decrease in income before taxes was primarily due to a significant reduction in the gain from the change in fair value of certain equity securities compared to the first quarter of 2023. This was partially offset by higher volumes and pricing in both segments, as well as cost-out initiatives.

Baker Hughes anticipates a multiyear upstream spending cycle, with expected growth in international and offshore markets for OFSE, and remains optimistic about the long-term outlook for natural gas and LNG projects within IET. They also expect continued growth in new energy solutions.

The company maintains a flexible capital allocation policy, balancing returning cash to shareholders with investing in growth. This includes increasing its quarterly dividend and engaging in share repurchases, as demonstrated by the $368 million returned to shareholders in Q1 2024.