Financial Data and Key Metrics Changes - Adjusted EPS for Q4 2025 was $1.53, up 21% year-over-year, driven by a 5.4% core sales growth [5][29] - For the full year 2025, adjusted EPS increased by 24%, reflecting strong performance and customer satisfaction [5] - Core FX neutral backlog increased by 14% year-over-year, indicating strong demand [29] Business Line Data and Key Metrics Changes - Aerospace and Advanced Technologies segment sales reached $272 million, a 15% increase, primarily organic growth [30] - Process Flow Technologies segment delivered sales of $309 million, flat compared to the previous year, with core sales down 1.5% [31][20] - Adjusted segment margin for Aerospace and Advanced Technologies expanded to 23.6%, up 50 basis points from the previous year [31] Market Data and Key Metrics Changes - The commercial aerospace market remains strong, with Boeing and Airbus ramping up production [15] - Defense procurement spending is solid, with a focus on strengthening the defense industrial base amid global uncertainties [15] - Chemical markets remain subdued, impacting the Process Flow Technologies segment [18] Company Strategy and Development Direction - The company aims for 4%-6% core sales growth and 35%-40% core operating leverage, with a focus on delivering shareholder value [4] - Recent acquisitions, including Druck, Panametrics, and Reuter-Stokes, are expected to enhance growth and support existing and new customers [6][9] - The company plans to widen its strategic focus in the Aerospace and Advanced Technologies segment, looking for adjacent market opportunities [8][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong performance and resilience, anticipating continued growth in 2026 [11] - The guidance for 2026 includes an adjusted EPS of $6.55-$6.75, reflecting a solid growth outlook despite challenges [12] - Management noted that while the first quarter of 2026 may be seasonally soft, the overall outlook for the year remains positive [35] Other Important Information - The company has a planned succession timeline, with Alex Alcala set to become CEO in April 2026, while Max Mitchell will transition to Executive Chairman [10][11] - The integration of recent acquisitions is progressing well, with expectations for these businesses to be slightly accretive to earnings in 2026 [22] Q&A Session Summary Question: What are the pricing opportunities at Druck in 2026 and 2027? - Management indicated significant pricing opportunities and expects improvements starting this year, with no obstacles to achieving goals [39][40] Question: Can you clarify guidance related to cost takeout at PSI? - Management confirmed no changes to previously discussed cost takeout targets, with productivity and commercial growth being key elements [41][42] Question: Can you discuss the impact of the government shutdown on military programs? - Management noted no significant changes in orders or funding due to the government shutdown, although some flight tests were delayed [77][78] Question: What is the expected performance for the aerospace segment in 2026? - Management anticipates strong growth in commercial OEM and mid-single digits for military OEM, with aftermarket volumes also expected to remain strong [76][77]

Financial Data and Key Metrics Changes - Adjusted EPS for Q4 2025 was $1.53, up 21% year-over-year, driven by a 5.4% core sales growth [5][30] - For the full year 2025, adjusted EPS increased by 24%, reflecting strong performance and customer satisfaction [5] - Core FX neutral backlog increased by 14% year-over-year, indicating strong demand [30] Business Line Data and Key Metrics Changes - Aerospace and Advanced Technologies segment sales reached $272 million, a 15% increase, primarily organic growth [30] - Process Flow Technologies segment sales were $309 million, flat compared to the previous year, with core sales down 1.5% [33][34] - Adjusted segment margin for Aerospace and Advanced Technologies expanded to 23.6%, up 50 basis points from the previous year [33] Market Data and Key Metrics Changes - The commercial aerospace market remains strong, with Boeing and Airbus ramping up production [16] - Defense procurement spending is solid, with a focus on strengthening the defense industrial base amid global uncertainties [16] - Chemical markets remain subdued, impacting the Process Flow Technologies segment [34][56] Company Strategy and Development Direction - The company aims for 4%-6% core sales growth and 35%-40% core operating leverage, with a focus on long-term value creation [4] - Recent acquisitions, including Druck, Panametrics, and Reuter-Stokes, are expected to enhance growth and support existing and new customers [5][9] - The company plans to expand its Aerospace and Advanced Technologies segment by exploring adjacent markets and technologies [8][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength and resilience of the company’s team and portfolio, anticipating strong performance in 2026 [11] - The guidance for 2026 includes an adjusted EPS of $6.55-$6.75, reflecting a solid growth outlook [12] - The company expects core sales growth in Aerospace and Advanced Technologies to be at the high end of the long-term growth assumption of 7%-9% [16] Other Important Information - The company has a planned succession timeline, with Alex Alcala set to become CEO on April 27, 2026 [10] - The integration process for recent acquisitions is underway, with expectations for these businesses to be slightly accretive to earnings in 2026 [22][23] - Corporate expenses for 2026 are anticipated to be in the range of $80 million-$85 million [36] Q&A Session Summary Question: What are the pricing opportunities at Druck in 2026 and 2027? - Management indicated significant pricing opportunities and expects improvements starting this year, with no obstacles to achieving goals [41][42] Question: Can you clarify what guidance contemplates regarding cost takeout at PSI? - Management confirmed that there are no changes to previously discussed cost takeout plans, which include productivity improvements and leveraging growth [43][44] Question: Can you discuss the strategic direction of the Aerospace and Advanced Technologies segment? - Management explained that the renaming to AAT reflects a broader focus on adjacent technologies and strategic growth opportunities [52] Question: What is the outlook for the chemical market in 2026? - Management expects the chemical market to remain sluggish, with no strong uptick anticipated in 2026 [56][58] Question: What are the expected synergies from the recent acquisitions? - Management stated that while synergies are not included in the initial financial model, they anticipate growth synergies from the acquisitions over time [101][104]

Core Insights - Baker Hughes Company (BKR) has completed the divestiture of its Precision, Sensors and Instrumentation (PSI) unit to Crane Company (CR) for $1.15 billion in cash [1][5] - The divestment includes technology, tools, physical locations, and approximately 1,600 employees from the PSI unit [2][5] - This strategic move aligns with Baker Hughes' focus on asset management, operational efficiency, and disciplined investment [2][5] Financial Impact - The divestiture is expected to generate cash that can be reinvested into more profitable business areas, thereby strengthening Baker Hughes' balance sheet and increasing investor appeal [2] - The current business environment for Baker Hughes is influenced by crude oil prices, with West Texas Intermediate crude oil prices below $60 per barrel, impacting revenues from oil and gas exploration and production companies [3] Industry Context - Other players in the oil and gas equipment and service industry, such as Halliburton Company (HAL) and Cactus, Inc. (WHD), are similarly affected by crude price volatility [4] - Halliburton currently holds a Zacks Rank 3 (Hold), while Cactus has a Zacks Rank 1 (Strong Buy) [4]

Core Viewpoint - Baker Hughes has announced the sale of its Precision Sensors & Instrumentation (PSI) product line to Crane Company for approximately $1.15 billion, aligning with its strategy of portfolio optimization and capital reallocation [1][3][4]. Group 1: Transaction Details - The PSI product line includes brands such as Druck, Panametrics, and Reuter-Stokes, which specialize in sensor-based technologies for various industries [2]. - The sale includes all assets of the PSI business, encompassing intellectual property, manufacturing facilities, and resources, with approximately 1,600 employees involved [2]. - The transaction is expected to close by the end of 2025 or early 2026, pending regulatory approvals [5]. Group 2: Strategic Implications - This divestiture is part of Baker Hughes' focus on enhancing its core competencies in rotating equipment, asset performance management, flow control, and decarbonization [3][4]. - The CEO of Baker Hughes emphasized that the transaction reflects the quality of the PSI product lines and their potential under Crane's management, reinforcing the company's commitment to long-term shareholder value [4]. Group 3: Advisory and Background - Evercore is serving as the financial adviser for Baker Hughes in this transaction [5]. - Baker Hughes operates globally, providing energy technology solutions and has a history of over 100 years in the industry [6].