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HOUSTON - Baker Hughes Company (NASDAQ:BKR) reported second-quarter adjusted earnings that exceeded analyst expectations, with adjusted EBITDA rising 7% year-over-year despite a modest revenue decline. The company’s stock edged up 0.4% following the announcement.
The energy technology company posted adjusted earnings per share of $0.63, beating the analyst estimate of $0.56. Revenue came in at $6.91 billion, surpassing the consensus estimate of $6.63 billion but down 3% from $7.14 billion in the same quarter last year. Adjusted EBITDA increased to $1.21 billion, reflecting a 170 basis point improvement in margins to 17.5%.
"We delivered strong second-quarter results, with total adjusted EBITDA margins increasing 170 basis points year-over-year to 17.5% despite a modest decline in revenue," said Lorenzo Simonelli, Baker Hughes Chairman and Chief Executive Officer. "This performance reflects the benefits of structural cost improvements and continued deployment of our business system."
The company’s Industrial & Energy Technology (IET) segment showed strength with orders totaling $3.5 billion, resulting in record backlog for the segment. IET revenue increased 5% year-over-year to $3.29 billion, while the Oilfield Services & Equipment (OFSE) segment saw revenue decline 10% to $3.62 billion.
Baker Hughes announced three strategic transactions during the quarter, including the formation of a joint venture with Cactus Inc (NYSE:WHD)., the sale of its Precision Sensors & Instrumentation product line to Crane Company (NYSE:CR) for approximately $1.15 billion, and the acquisition of Continental Disc Corporation for about $540 million.
The company reported cash flow from operating activities of $510 million and free cash flow of $239 million. Baker Hughes returned $423 million to shareholders during the quarter, including $196 million in share repurchases.
Based on strong first-half performance and a positive outlook, Baker Hughes raised its full-year revenue and EBITDA guidance for the IET segment while reestablishing full-year guidance for the OFSE segment.
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