Baker Hughes Q4 Earnings Beat Estimates on IET Segment Performance

Core Insights - Baker Hughes Company (BKR) reported fourth-quarter 2025 adjusted earnings of 78 cents per share, exceeding the Zacks Consensus Estimate of 67 cents, and increased from 70 cents in the previous year [1] - Total quarterly revenues reached $7,386 million, surpassing the Zacks Consensus Estimate of $7,056 million, and also increased from $7,364 million in the year-ago quarter [1] Segment Performance - The company reorganized its operations into two segments: Oilfield Services and Equipment (OFSE) and Industrial and Energy Technology (IET) as of October 1, 2022 [3] - Revenues from the OFSE unit were $3,572 million, an 8% decrease from $3,871 million a year ago, and below the Zacks Consensus Estimate of $3,608 million [3] - EBITDA from the OFSE segment totaled $647 million, down 14% from $755 million in the fourth quarter of 2024, attributed to lower volume despite cost-cutting initiatives [4] - Revenues from the IET unit amounted to $3,814 million, a 9% increase from $3,492 million in the previous year, exceeding the Zacks Consensus Estimate of $3,468 million [4] - EBITDA from the IET segment was $761 million, up 19% from $639 million a year ago, driven by productivity, volume, and favorable pricing and foreign exchange movements [5] Financial Overview - Total costs and expenses for the fourth quarter were $6,858 million, higher than $6,572 million in the previous year [6] - Orders from all business segments totaled $7.9 billion, a 5% increase from $7.5 billion a year ago, surpassing the Zacks Consensus Estimate of $6.9 billion [7] - Free cash flow generated was $1.34 billion, compared to $894 million a year ago [8] Capital Expenditure and Balance Sheet - Net capital expenditure in the fourth quarter was $321 million [11] - As of December 31, 2025, cash and cash equivalents stood at $3.7 billion, with long-term debt of $5.4 billion and a debt-to-capitalization ratio of 24.3% [11] Outlook - The company expects IET orders to remain in line with 2025 levels, supported by growth in LNG, FPSO, and gas infrastructure projects, along with strong demand for power systems [12]