Baker Hughes Reports Strong Q1 Earnings, Orders Up 26%, Advances Portfolio Divestitures
Summary
Baker Hughes reported strong first-quarter results with significant order growth and advanced its portfolio management strategy through major divestitures, despite a decline in cash flow.
Key Events
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Strong First Quarter Financial Performance
Baker Hughes reported Q1 2026 revenue of $6.6 billion (up 2% year-over-year), GAAP diluted EPS of $0.93 (up 131% year-over-year), and adjusted diluted EPS of $0.58 (up 13% year-over-year). Adjusted EBITDA increased 12% year-over-year to $1,158 million.
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Significant Order Growth and Record Backlog
Total orders for the quarter reached $8.2 billion, marking a 26% increase year-over-year. The Industrial & Energy Technology (IET) segment achieved record orders of $4.9 billion, contributing to a record IET Remaining Performance Obligations (RPO) of $33.1 billion.
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Advancing Portfolio Management with Major Divestitures
The company announced the sale of its Waygate Technologies business for approximately $1.45 billion and completed the sale of its Precision Sensors & Instrumentation (PSI) product line for $1.15 billion, among other transactions. These divestitures are expected to generate approximately $3 billion in gross proceeds in 2026, strengthening the balance sheet.
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Decline in Cash Flow
Cash flows from operating activities decreased to $500 million (down 29% year-over-year and 70% sequentially), and free cash flow declined to $210 million (down 54% year-over-year and 84% sequentially).
Analysis
Baker Hughes delivered a strong first quarter, with significant year-over-year growth in orders, revenue, and profitability, driven by robust performance in its Industrial & Energy Technology (IET) segment. The company also made substantial progress on its portfolio management strategy, announcing and closing several divestitures expected to generate approximately $3 billion in gross proceeds, which will significantly strengthen its balance sheet. While operating and free cash flow saw sequential and year-over-year declines, and the company acknowledged ongoing disruptions in the Middle East, the overall results and strategic actions position Baker Hughes for continued growth and improved financial flexibility. This positive news comes as the stock is trading near its 52-week high, reflecting investor confidence in the company's direction.
At the time of this filing, BKR was trading at $64.02 on NASDAQ in the Energy & Transportation sector, with a market capitalization of approximately $64B. The 52-week trading range was $34.56 to $67.00. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.