Baker Hughes Company
CEO : Mr. Lorenzo Simonelli
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q2 | 25.1% YoY | -445.5% | -148.8% | 2023-07-19 |
Lorenzo Simonelli says,
Order Momentum and Operating Results
- Maintained order momentum in IET and SSPS
- Delivered strong operating results at the higher end of guidance in both business segments
- Booked almost $150 million of New Energy orders
- Generated approximately $620 million of free cash flow
Global Upstream Spending Outlook
- Expect global upstream spending in 2023 to be more durable and less sensitive to commodity price swings
- Market softness in North America expected to be offset by strength in international and offshore markets
- Strong balance sheets and disciplined capital spending driving spending cycle
- Steady activity increases from NOCs and IOCs in international and offshore markets
LNG Outlook
- Solid demand growth in LNG, led by Europe and Asia
- Contracted long-term offtake agreements slightly above previous levels
- Key driver of momentum in industry FIDs
- Expect market to exceed 65 MTPA of FIDs this year and similar activity in 2024
- Expanding pipeline of LNG opportunities tied to growing recognition of role in energy transition
Optimizing Corporate Structure and Cost Reductions
- Driving actions to optimize corporate structure and increase margins and returns
- Completed actions to achieve first $150 million of cost-out target by end of 2023
- Additional opportunities for further cost reductions in 2024 and beyond
- Goal to exceed 20% EBITDA levels for each business segment in next few years
Growth Opportunities and Energy Transition
- Well positioned to capitalize on multiple growth vectors in IET and OFSE
- Excited about new opportunities in New Energy applications leveraging unique portfolio
- Believe combination of growth opportunities and business transformation objectives will drive higher margins and returns
Nancy Buese says,
Strong Second Quarter Results
- Exceeded high-end of adjusted EBITDA guidance range
- Strong orders in both business segments
- Exceeded expectations on free cash flow
Orders and Revenue
- Total company orders of $7.5 billion, up 28% YoY
- RPO at record levels, providing volume and earnings visibility
- Revenue of $6.3 billion, up 25% YoY
Margin Improvement
- Adjusted operating income rate up 100 basis points sequentially and 250 basis points YoY
- Adjusted EBITDA margin rate of 14.4%, up 70 basis points sequentially and 150 basis points YoY
Free Cash Flow and Debt
- Generated strong free cash flow of $623 million, up $426 million sequentially
- Expect free cash flow conversion from adjusted EBITDA for the full year to be in the range of 45% to 50%
- Total debt of $6.6 billion, net debt of $3.8 billion
Cost Optimization and Margin Improvement
- Achieved $150 million cost-out target by end of 2023
- Identified additional opportunities for cost reduction in 2024 and beyond
- Objective to drive EBITDA margins for each business segment above 20%
Outlook
- Third quarter revenue expected to be between $6.4 billion and $6.6 billion
- Full-year revenue expected to be between $24.8 billion and $26 billion
- Expect sequential improvement in OFSE revenue and EBITDA in the third quarter
Q & A sessions,
Raised Guidance for IET Orders
- Guidance for IET orders raised by $1 billion
- Large pipeline of opportunities for IET
- Visibility improving for this year and next few years
Robust LNG Outlook
- LNG projects coming to FID through rest of this year and into next year
- Customer discussions for LNG projects are robust
- Natural gas and LNG playing a key role as a base load for energy mix
Strength in Offshore Activity
- Strength in offshore activity, particularly in FPSO sites
- Opportunities in offshore production
New Energy Orders
- Met full-year guidance in the second quarter for new energy orders
- Seeing opportunities in the back half of the year
Optimistic Outlook
- Optimistic outlook for 2023
- Maintaining order momentum in IET and SSPS
- Strong operating results and free cash flow
No bad stock 