01—Abstract
Summary
Summary of the 10-Q filed April 24, 2024. Cited figures are marked; the original filing is the authoritative source.
Baker Hughes Company reported a solid first quarter for 2024, with total revenue increasing by 12% year-over-year to $6.4 billiona.
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 millionb, 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 millionc 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.
02—Key points
Key Highlights
- Total revenue for Q1 2024 rose 12% to $6.4 billion compared to Q1 2023, driven by higher volumes in IET and OFSE.
- Income before taxes decreased by $119 million, primarily due to a lower gain on equity securities compared to the prior year.
- Operating income for OFSE increased by $50 million, and for IET by $89 million, reflecting improved segment performance.
- The company returned $368 million to shareholders in Q1 2024 through dividends ($210 million) and share repurchases ($158 million).
- Baker Hughes increased its quarterly dividend by one cent to $0.21 per share.
- Remaining Performance Obligations (RPO) stood at $32.7 billion as of March 31, 2024, indicating strong future revenue potential.
- Cash flow from operating activities was robust, generating $784 million in Q1 2024, a significant increase from $461 million in Q1 2023.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 24, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $6.42B$5.72B | +12.3% |
| R&D Expenses | $164.00M— | — |
| SG&A Expenses | $618.00M$655.00M | −5.6% |
| Operating Expenses | $5.76B$5.28B | +9.2% |
| Operating Income | $653.00M$438.00M | +49.1% |
| Net Income | $455.00M$576.00M | −21.0% |
05—Questions
Frequently Asked Questions
What were the primary drivers of revenue growth in the first quarter?
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.
Why did income before taxes decrease despite revenue growth?
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.
What is Baker Hughes' outlook for the energy markets in the remainder of 2024?
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.
How is Baker Hughes managing its capital allocation?
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.
06—Continue