Baker Hughes Announces Full-Year 2023 Results
Baker Hughes Company announced results today for the fourth-quarter and full-year 2023.
“As we continue our journey, 2023 proved to be a pivotal year for Baker Hughes. We successfully removed $150 million of costs, realigned our Industrial & Energy Technology (IET) segment, and recently launched actions to further streamline our Oilfield Services & Equipment segment (OFSE). Our strategy to transform the way we operate is working. In 2023, our adjusted EBITDA* was up double digits for the third consecutive year and exceeded prior cycle’s peak levels by 25%. I would like to thank our employees for their hard work and commitment to achieve our goals, delivering for our customers, and pushing the Company forward,” said Lorenzo Simonelli, Baker Hughes chairman and chief executive officer.
“During the fourth quarter, adjusted EBITDA* came in above the mid-point of our guidance range due to continued operational improvement and full realization of the $150 million of cost-out. IET orders remained strong, exceeding $3 billion for the fifth consecutive quarter. Additionally, we were awarded more than $1 billion of contractual service agreements (CSA), while we booked the previously announced 9.6 MTPA Ruwais Liquefied Natural Gas (LNG) project in the United Arab Emirates.”
“In OFSE, we continue to demonstrate solid margin improvement, with segment EBITDA margin* increasing to 17.9% and Oilfield Services EBITDA margins* now exceeding 20% – both record margins. In new energy, orders of $169 million in the fourth quarter brought the full-year total to $750 million.”
“As you can see from our strong 2023 results, Baker Hughes is on its way to becoming a leaner and more efficient energy technology company. We continue to carefully execute our plan to drive margins meaningfully higher,” concluded Simonelli.
* Non-GAAP measure. See reconciliations in the section titled “Reconciliation of GAAP to non-GAAP Financial Measures.”
| Three Months Ended | Variance | ||||||||||
| (in millions except per share amounts) | December 31, 2023 | September 30, 2023 | December 31, 2022 | Sequential | Year-over-year | ||||||
| Orders | $ | 6,904 | $ | 8,512 | $ | 8,009 | (19 | )% | (14 | )% | |
| Revenue | 6,835 | 6,641 | 5,905 | 3 | % | 16 | % | ||||
| Net income (loss) attributable to Baker Hughes | 439 | 518 | 182 | (15 | )% | F | |||||
| Adjusted net income attributable to Baker Hughes* (non-GAAP) | 511 | 427 | 381 | 20 | % | 34 | % | ||||
| Operating income | 651 | 714 | 663 | (9 | )% | (2 | )% | ||||
| Adjusted operating income* (non-GAAP) | 816 | 716 | 692 | 14 | % | 18 | % | ||||
| Adjusted EBITDA* (non-GAAP) | 1,091 | 983 | 947 | 11 | % | 15 | % | ||||
| Diluted earnings per share (EPS) | 0.43 | 0.51 | 0.18 | (15 | )% | F | |||||
| Adjusted diluted EPS* (non-GAAP) | 0.51 | 0.42 | 0.38 | 21 | % | 34 | % | ||||
| Cash flow from operating activities | 932 | 811 | 898 | 15 | % | 4 | % | ||||
| Free cash flow* (non-GAAP) | 633 | 592 | 657 | 7 | % | (4 | )% | ||||
“F” is used in when variance is above 100%. Additionally, “U” is used when variance is below (100)%.
* Non-GAAP measure. See reconciliations in the section titled “Reconciliation of GAAP to non-GAAP Financial Measures.” EBITDA margin is defined as EBITDA divided by revenue. Free cash flow conversion rate is defined as free cash flow divided by EBITDA.
Certain columns and rows in our tables and financial statements may not sum up due to the use of rounded numbers.
Quarter Highlights
The OFSE business segment secured two significant, multi-year integrated solutions contracts in Latin America for drilling, completions, and plug and abandonment services. One contract comprises offshore exploration, while the other is for land development. The awards reflect confidence in Baker Hughes’ solutions, contributing to our strategy of strengthening the core by increasing market penetration.
Strong orders performance continued across IET in the fourth quarter. In Gas Technology Equipment, momentum continues in the offshore market. Baker Hughes was awarded an important contract by SBM Offshore to provide turbogenerators, turbocompressors, electric motor-driven compressors, as well as commissioning spare parts, for a Floating Production, Storage and Offloading vessel (FPSO).
Gas Technology Equipment also secured an important contract from a consortium for one electric motor driven sour gas booster compression package, to support the development of offshore natural gas fields in the Middle East. During the fourth quarter Baker Hughes also confirmed the previously announced award to supply two electric liquefaction systems for the 9.6 MTPA Ruwais LNG project in the United Arab Emirates, one of the first all-electric LNG projects in the Middle East.
Gas Technology Services secured several orders across multiple geographies and applications, as well CSA commitments worth more than $1 billion primarily driven by LNG and offshore projects in North America and the Middle East. Also in the quarter, Gas Technology Services secured several important upgrade orders, particularly in Europe for both refinery and gas network applications to provide operators with solutions that can enable efficiency gains and emissions reduction.
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