Baker Hughes Q2 Results Beat Estimates
Baker Hughes Q2 Results had record IET orders and a $40.1 billion backlog, prompting a guidance raise and favoring energy-infrastructure trades.
KEY TAKEAWAYS
- Record IET orders of $7.1 billion and total Q2 orders of $10.5 billion drove the guidance raise.
- Backlog/RPO reached $40.1 billion, supporting margin expansion and a Horizon Two IET target above $45 billion.
- Raised full-year 2026 revenue to $27.4 billion and adjusted EBITDA to $4.9 billion.
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Baker Hughes Company (BKR) reported second-quarter 2026 results on July 26, beating profit and revenue estimates. Record Industrial & Energy Technology (IET) orders and a larger backlog lifted margins and prompted the company to raise its full-year revenue and adjusted EBITDA guidance.
Record Orders, Backlog, and Raised Guidance
Total company orders reached $10.5 billion in the quarter, up 49% year over year, including a record $7.1 billion in IET orders. Management attributed the surge to strong demand for LNG export equipment, gas-fired power generation, gas-processing systems, digital solutions, and data-center energy infrastructure.
Remaining performance obligations (RPO) totaled $40.1 billion at quarter end, up 19% year over year, with IET RPO hitting a record $37.1 billion. The company raised its full-year 2026 revenue guidance to $27.35 billion and adjusted EBITDA guidance to $4.85 billion. It also increased the Horizon Two IET orders target to more than $45 billion. Executives expressed confidence in reaching at least the midpoint of this guidance, citing favorable fundamentals and the expanded backlog.
Earnings, Cash Flow, and Dividend
Baker Hughes reported revenue of $6.74 billion and adjusted earnings per share of $0.64 for the quarter ended June 30, both above consensus. Adjusted EBITDA rose 2% year over year to $1.23 billion, exceeding the high end of prior guidance. The adjusted EBITDA margin reached a record 18.3%, up 70 basis points, while adjusted net income increased 3% to $640 million.
Operating cash flow improved to $1.35 billion, and free cash flow rose to $1.11 billion from $239 million a year earlier, enhancing financial flexibility. By segment, Oilfield Services & Equipment generated $3.45 billion in revenue and $605 million in EBITDA, while Industrial & Energy Technology posted $3.29 billion in revenue and $678 million in EBITDA. Management noted that the order mix and backlog support margin expansion in IET.
The board declared a quarterly cash dividend of $0.23 per share of Class A common stock, payable Aug. 17 to holders of record Aug. 7. The dividend will be funded from cash generated by operations.
Chief Executive Lorenzo Simonelli said, "We delivered another strong quarter as disciplined execution and the strength of our diversified portfolio more than offset anticipated headwinds in the Middle East." Management highlighted resilience in Brazil, Mexico, Asia-Pacific, and North America land operations, which helped offset weaker drilling activity linked to Middle East disruptions.
Together, the strong results and expanded backlog underpin the raised full-year guidance and elevated Horizon Two IET target, reflecting sustained demand for energy-infrastructure products and services.
