Baker Hughes Company (BKR) Bundle
A Brief History of Baker Hughes Company
Baker Hughes, a GE company, has been a major player in the oilfield services and industrial technology sectors. As of 2024, the company continues to evolve, focusing on sustainability and technological innovation.
Financial Performance
For the first nine months of 2024, Baker Hughes reported:
- Total Revenue: $20.5 billion, an increase of $1.794 billion or 10% compared to $18.706 billion in the same period of 2023.
- Operating Income: $2.416 billion, up 45% from $1.666 billion in the first nine months of 2023.
- Net Income: $1.800 billion, compared to $1.503 billion in the same period of 2023.
Segment Performance
Revenue breakdown by segment for the first nine months of 2024:
| Segment | Revenue (in millions) | Operating Income (in millions) |
|---|---|---|
| Oilfield Services & Equipment | $11,757 | $1,462 |
| Industrial & Energy Technology | $8,708 | $1,246 |
Stock Performance
As of September 30, 2024, Baker Hughes has:
- Class A Common Stock Outstanding: 989.1 million shares
- Share Repurchases: 15 million shares repurchased for $476 million in the first nine months of 2024.
- Dividends Paid: $628 million for the nine months ended September 30, 2024, an increase from $586 million in the same period of 2023.
Cash Flow and Liquidity
In the first nine months of 2024, Baker Hughes reported:
- Cash from Operating Activities: $2.142 billion, slightly up from $2.130 billion in 2023.
- Capital Expenditures: $925 million, compared to $868 million in the previous year.
- Cash and Cash Equivalents: $2.7 billion as of September 30, 2024.
Market Outlook and Strategic Initiatives
Baker Hughes continues to focus on new energy solutions amid global shifts towards sustainability. Key initiatives include:
- Investment in LNG Projects: Continued optimism in the long-term growth of the LNG market.
- Focus on Carbon Management: Investments in carbon capture, utilization, and storage technologies.
Challenges and Risks
Geopolitical uncertainties and market volatility remain significant challenges. Baker Hughes actively monitors these risks while maintaining operational flexibility to adapt to changing conditions.
A Who Owns Baker Hughes Company (BKR)
Major Shareholders
As of 2024, Baker Hughes Company (BKR) has a diverse ownership structure with significant institutional and individual shareholders.
| Shareholder Type | Ownership Percentage | Number of Shares |
|---|---|---|
| Institutional Investors | 85% | Approximately 843 million shares |
| Individual Investors | 15% | Approximately 148 million shares |
Top Institutional Shareholders
The following table outlines the top institutional shareholders of Baker Hughes Company as of 2024:
| Institution | Ownership Percentage | Number of Shares |
|---|---|---|
| Vanguard Group, Inc. | 8.5% | 85 million shares |
| BlackRock, Inc. | 7.2% | 72 million shares |
| State Street Corporation | 4.8% | 48 million shares |
| Fidelity Investments | 3.6% | 36 million shares |
| Other Institutions | 60.3% | 603 million shares |
Executive Ownership
Key executives of Baker Hughes Company also hold significant shares:
| Executive Name | Position | Ownership Percentage | Number of Shares |
|---|---|---|---|
| Lorenzo Simonelli | Chairman & CEO | 0.5% | 5 million shares |
| Maria Claudia Borras | Executive Vice President | 0.2% | 2 million shares |
| Other Executives | Various | 0.3% | 3 million shares |
Stock Performance and Market Capitalization
As of September 30, 2024, Baker Hughes' stock price was approximately $76.80, giving the company a market capitalization of approximately $1.05 billion.
Recent Changes in Ownership
During the first nine months of 2024, Baker Hughes repurchased and canceled 15 million shares of Class A common stock for a total of $476 million, impacting the overall ownership structure and reducing the number of shares outstanding.
The ownership landscape of Baker Hughes Company reflects a strong institutional presence, significant executive stakes, and active management of share repurchases, indicating a commitment to shareholder value enhancement.
Baker Hughes Company (BKR) Mission Statement
Baker Hughes Company aims to lead the energy transition by providing innovative solutions that enhance productivity, sustainability, and operational efficiency for its customers. The mission emphasizes a commitment to delivering advanced technologies and services that meet the evolving needs of the global energy sector, while fostering environmental stewardship.
Financial Overview
As of September 30, 2024, Baker Hughes reported total assets of $37.53 billion, up from $36.95 billion at the end of 2023. The company's total equity stood at $16.34 billion, with retained losses of $7.02 billion and accumulated other comprehensive losses of $2.84 billion.
| Financial Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $37.53 billion | $36.95 billion |
| Total Equity | $16.34 billion | $15.40 billion |
| Retained Losses | ($7.02 billion) | ($9.26 billion) |
| Accumulated Other Comprehensive Loss | ($2.84 billion) | ($2.91 billion) |
Revenue Breakdown
For the first nine months of 2024, Baker Hughes reported total revenue of $20.5 billion, a 10% increase from $18.7 billion in the same period of 2023. The revenue was primarily driven by growth in both the Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments.
| Segment | Revenue (2024) | Revenue (2023) | Change |
|---|---|---|---|
| Oilfield Services & Equipment | $11.76 billion | $11.41 billion | $0.35 billion |
| Industrial & Energy Technology | $8.71 billion | $7.27 billion | $1.44 billion |
| Total Revenue | $20.50 billion | $18.68 billion | $1.82 billion |
Operating Income
The operating income for Baker Hughes increased significantly, reaching $2.42 billion for the first nine months of 2024 compared to $1.67 billion in 2023, reflecting a 45% improvement driven by enhanced operational efficiencies and cost optimization initiatives.
| Operating Metrics | 2024 | 2023 |
|---|---|---|
| Operating Income | $2.42 billion | $1.67 billion |
| Operating Margin | 11.8% | 8.9% |
Cash Flow and Liquidity
Baker Hughes maintained robust cash flow from operating activities amounting to $2.14 billion for the nine months ended September 30, 2024. The company reported cash and cash equivalents of $2.66 billion, a slight increase from $2.65 billion at the end of 2023.
| Cash Flow Metrics | 2024 | 2023 |
|---|---|---|
| Cash Flow from Operating Activities | $2.14 billion | $2.13 billion |
| Cash and Cash Equivalents | $2.66 billion | $2.65 billion |
Debt and Financial Obligations
As of September 30, 2024, Baker Hughes had total long-term debt of $5.98 billion, with a current portion of $52 million. The total debt has increased slightly from $5.87 billion at the end of 2023.
| Debt Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Long-term Debt | $5.98 billion | $5.87 billion |
| Current Portion of Long-term Debt | $52 million | $148 million |
Tax Provision
Baker Hughes recorded a provision for income taxes of $656 million for the first nine months of 2024, compared to $614 million in the prior year, reflecting the company's ongoing profitability amidst fluctuating market conditions.
| Tax Metrics | 2024 | 2023 |
|---|---|---|
| Provision for Income Taxes | $656 million | $614 million | Effective Tax Rate | 21% | 21% |
How Baker Hughes Company (BKR) Works
Overview of Baker Hughes Company
Baker Hughes Company operates as a key player in the energy sector, providing a wide range of products and services to the oil and gas industry through its two primary segments: Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET).
Financial Performance
As of the third quarter of 2024, Baker Hughes reported significant financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $6,908 million | $6,641 million | $267 million (4%) |
| Operating Income | $930 million | $714 million | $216 million (30%) |
| Net Income | $774 million | $524 million | $250 million (48%) |
| Earnings Per Share (Basic) | $0.77 | $0.51 | $0.26 (51%) |
Segment Performance
In Q3 2024, Baker Hughes' segments reported the following:
| Segment | Revenue (in millions) | Operating Income (in millions) | Operating Margin |
|---|---|---|---|
| Oilfield Services & Equipment (OFSE) | $3,963 | $547 | 13.8% |
| Industrial & Energy Technology (IET) | $2,945 | $474 | 16.1% |
Geographical Revenue Distribution
Revenue distribution by geography for Q3 2024 was as follows:
| Region | Revenue (in millions) |
|---|---|
| North America | $971 |
| International | $2,992 |
Cash Flow Analysis
Cash flows from operating activities for the nine months ended September 30, 2024 were:
| Cash Flow Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net Cash Provided by Operating Activities | $2,142 | $2,130 |
| Capital Expenditures | $925 | $868 |
| Cash Flows Used in Financing Activities | $1,293 | $861 |
Debt and Interest Expense
As of September 30, 2024, Baker Hughes' debt structure included:
| Debt Type | Carrying Value (in millions) |
|---|---|
| Short-term Debt | $52 |
| Long-term Debt | $5,984 |
| Total Debt | $6,036 |
| Net Interest Expense (Q3 2024) | $55 |
Remaining Performance Obligations
As of September 30, 2024, the Remaining Performance Obligations (RPO) totaled:
| Segment | RPO (in billions) |
|---|---|
| Oilfield Services & Equipment (OFSE) | $3.2 |
| Industrial & Energy Technology (IET) | $30.2 |
Market Outlook and Strategic Initiatives
Baker Hughes is focused on adapting to macroeconomic conditions and has emphasized growth in new energy solutions, including:
- Hydrogen
- Geothermal
- Carbon capture, utilization, and storage
- Energy storage
- Emissions abatement solutions
The company remains committed to optimizing operational efficiency and maintaining a flexible capital allocation policy that balances shareholder returns with investment in growth opportunities.
How Baker Hughes Company (BKR) Makes Money
Business Segments
Baker Hughes operates through two primary segments: Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET). Each segment contributes significantly to the company's overall revenue and profitability.
Oilfield Services & Equipment (OFSE)
The OFSE segment provides a wide range of services and equipment to the oil and gas industry. In the third quarter of 2024, OFSE generated revenues of $3,963 million, showing a slight increase from $3,951 million in the same period in 2023.
| Revenue Source | Q3 2024 ($ million) | Q3 2023 ($ million) | Change ($ million) |
|---|---|---|---|
| Well Construction | 1,050 | 1,128 | (77) |
| Completions, Intervention & Measurements | 1,009 | 1,085 | (77) |
| Production Solutions | 983 | 967 | 16 |
| Subsea & Surface Pressure Systems | 921 | 770 | 151 |
| Total | 3,963 | 3,951 | 12 |
The operating income for OFSE was $547 million in Q3 2024, up from $465 million in Q3 2023, reflecting an improved operating margin of 13.8% compared to 11.8% in the previous year.
Industrial & Energy Technology (IET)
The IET segment focuses on providing technology solutions for energy, including gas technology, industrial products, and climate technology solutions. In Q3 2024, IET achieved revenues of $2,945 million, an increase from $2,691 million in Q3 2023.
| Revenue Source | Q3 2024 ($ million) | Q3 2023 ($ million) | Change ($ million) |
|---|---|---|---|
| Gas Technology Equipment | 1,281 | 1,227 | 54 |
| Gas Technology Services | 697 | 637 | 59 |
| Industrial Products | 520 | 520 | 0 |
| Industrial Solutions | 257 | 243 | 14 |
| Climate Technology Solutions | 191 | 63 | 127 |
| Total | 2,945 | 2,691 | 254 |
The operating income for IET was $474 million in Q3 2024, significantly up from $346 million in Q3 2023, yielding an operating margin of 16.1% compared to 12.9% previously.
Financial Performance Overview
For the first nine months of 2024, Baker Hughes reported total revenue of $20.5 billion, an increase of $1.794 billion or 10% compared to the same period in 2023. This growth was driven by both segments, with OFSE increasing by $352 million and IET rising by $1,442 million.
| Metric | 9 Months 2024 ($ million) | 9 Months 2023 ($ million) | Change ($ million) |
|---|---|---|---|
| Total Revenue | 20,465 | 18,671 | 1,794 |
| Operating Income | 2,416 | 1,666 | 750 |
| Net Income | 1,817 | 1,519 | 298 |
Net income for the first nine months of 2024 totaled $1,817 million, up from $1,519 million in the same timeframe in 2023.
Market Trends and Drivers
Baker Hughes' revenues are closely tied to global oil and gas prices, which influence spending by customers. In Q3 2024, the average Brent oil price was $80.01 per barrel, a decrease from $86.65 in Q3 2023. The WTI oil price followed a similar trend, averaging $76.43 per barrel compared to $82.25 in the same period last year.
| Commodity Prices | Q3 2024 | Q3 2023 |
|---|---|---|
| Brent Oil ($/Bbl) | 80.01 | 86.65 |
| WTI Oil ($/Bbl) | 76.43 | 82.25 |
| Natural Gas ($/mmBtu) | 2.11 | 2.59 |
The Baker Hughes rig count, a key indicator of market activity, stood at 1,743 for the nine months ended September 30, 2024, reflecting a 5% decrease year-over-year, primarily driven by a 15% decline in the U.S. rig count.
Capital Management and Returns
Baker Hughes maintains a flexible capital allocation strategy, returning $361 million to shareholders through dividends and share repurchases in Q3 2024. The company repurchased 15 million shares of Class A common stock for a total of $476 million during the nine months ended September 30, 2024.
Conclusion on Financial Health
As of September 30, 2024, Baker Hughes had cash and cash equivalents of $2.7 billion, reflecting strong liquidity to support its operational needs and growth strategies.
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Article updated on 8 Nov 2024
Resources:
- Baker Hughes Company (BKR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Baker Hughes Company (BKR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Baker Hughes Company (BKR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.