Why Are Baker Hughes Shares Trading Lower Today

Why Are Baker Hughes Shares Trading Lower Today
  • Baker Hughes Co BKR reported first-quarter revenue growth of 1% year-over-year and a 12% decline sequentially to $4.84 billion, missing the consensus of $5.03 billion.
  • Orders grew by 51% Y/Y to $6.84 billion and were up 3% sequentially.
  • Baker recorded strong orders from TPS as the LNG order cycle continued to unfold.
  • Revenues by segments: Oilfield Services $2.49 billion (+13% Y/Y), Oilfield Equipment $528 million (-16% Y/Y); Turbomachinery & Process Solutions $1.35 billion (-9% Y/Y), and Digital Solutions $474 million (+1% Y/Y).
  • Adjusted EPS improved to $0.15 compared to $0.12 in 1Q21, missing the consensus of $0.20.
  • Adjusted operating income was $348 million for the quarter, down 39% sequentially and up 29% Y/Y. Margin expanded by 155 bps to 7.2%.
  • Adjusted EBITDA was $625 million, down 26% sequentially and up 11% Y/Y, and the margin expanded by 117 bps to 12.9%.
  • BKR’s Cash flow from operating activities for the quarter totaled $72 million, compared to $678 million a year ago. Adjusted Free cash flow was negative $105 million.
  • The company held cash and equivalents of $3.19 billion as of March 31, 2022.
  • Baker acquired Mosaic Materials, a growth stage technology company.
  • Mosaic is focused on developing a proprietary direct air capture technology using Metal-Organic Framework materials that can be used to separate carbon dioxide from gas mixtures across a variety of applications. This will enhance the company’s carbon capture, utilization, and storage portfolio, enabling direct air capture with higher efficiency and lower total cost of ownership.
  • “As we look ahead to the rest of 2022, we see a favorable oil and gas price backdrop and a dynamic operating environment...We believe that we are well-positioned to benefit from an extended cyclical recovery in upstream oil & gas and longer-term structural growth trends in LNG, new energy and industrial asset management,” commented Lorenzo Simonelli, chairman, and CEO.
  • Price Action: BKR shares are trading lower by 7.49% at $33.99 on the last check Wednesday.
  • Photo Via Wikimedia Commons

Posted In: EarningsNewsMoversTrading IdeasBriefswhy it's moving