Baker Hughes exceeds earnings expectations in second quarter
Baker Hughes exceeded Wall Street profit forecasts for the second quarter, driven by strong demand for natural gas technology, even as the oilfield services provider warned of reduced spending by oil producers.
The Houston-based company reported adjusted earnings per share of 63 cents for the three months ended 30 June, beating analysts' estimates of 56 cents. However, total revenue fell 3% to $6.91 billion compared to the same period last year, as slower drilling activity across key markets dampened demand for oilfield equipment.
"We delivered strong second-quarter results, with total adjusted EBITDA margins increasing 170 basis points year-over-year to 17.5% despite a modest decline in revenue," said Lorenzo Simonelli, Baker Hughes Chairman and CEO.
The company's Industrial & Energy Technology (IET) segment showed resilience, with orders jumping 28% in gas technology services, lifting IET revenue to $3.29 billion. Baker Hughes has been leveraging this portfolio to expand its presence in the natural gas and LNG sectors amid rising electricity consumption driven by data centres and AI operations.
Baker Hughes joined Halliburton and SLB in warning of an industry slowdown, with North American upstream spending expected to decline in the low-double digits and international spending down in the high-single digits.
Despite these headwinds, the company is capitalising on growth areas including LNG infrastructure and data centre-driven power demand. Baker Hughes secured more than $550 million in data centre-related orders during the quarter and believes it is well-positioned to "meet or exceed" its three-year target of $1.5 billion in data centre equipment orders ahead of schedule.
The company maintained its diversification strategy through three strategic transactions announced in the quarter, including forming a joint venture with Cactus Inc. and agreeing to sell its Precision Sensors & Instrumentation product line for approximately $1.15 billion.
"We remain confident in our ability to deliver solid performance in 2025," Simonelli concluded, noting that continued IET growth would help offset weakness in more market-sensitive areas.
Shares rose over 2% in after-hours trading following the results announcement.
