Baker Hughes (NASDAQ:BKR) reported third-quarter results marked by stronger orders, record remaining performance obligations in its Industrial & Energy Technology business, and early integration progress following its acquisition of Chart Industries.
Chairman and CEO Lorenzo Simonelli said the company generated $10.8 billion in total orders during the quarter, producing a 1.3x book-to-bill ratio. Revenue rose 14% year over year to about $8 billion, while adjusted EBITDA increased 14% to $1.42 billion. Adjusted diluted earnings per share were $0.70, up 2% from the prior year, and free cash flow totaled $769 million despite roughly $200 million in Chart-related integration, restructuring and closing costs.
“We delivered another exceptional quarter,” Simonelli said, citing disciplined execution, cash generation and continued progress toward making the company more solutions-led across energy and industrial markets.
IET Orders Reach Record Levels
Industrial & Energy Technology, or IET, recorded $5.9 billion in third-quarter orders and a 1.7x book-to-bill ratio. Orders included $1 billion of LNG equipment awards and $2.2 billion of Power Systems orders, led by data-center demand. IET remaining performance obligations rose 6% sequentially and 23% year over year to a record $39.4 billion.
Management raised its full-year IET orders outlook to a range of $21.5 billion to $23.5 billion. Simonelli also said the company now expects IET orders to exceed $50 billion during its “Horizon Two” planning period, up from a prior target introduced about a year earlier.
Data-center awards totaled $4.9 billion year to date, including a major order to provide 1.1 gigawatts of generation capacity for a U.S. technology company and another order representing about 500 megawatts for AI infrastructure. Simonelli said Power Systems orders could approach $7 billion this year and about $15 billion over Horizon Two.
LNG remained another major driver. Baker Hughes booked approximately $4 billion of LNG equipment orders year to date, which management said could rise to roughly $5 billion for the full year. The company expects LNG equipment orders could again approach $10 billion during Horizon Two.
Among other commercial wins, Baker Hughes cited LNG and pipeline awards from Venture Global, an integrated FPSO equipment package for an offshore development, a long-term service agreement with SBM Offshore covering 27 LM2500 gas turbines, and a control-valve order across six nuclear reactor units in Europe.
Chart Integration and Margin Targets
The third quarter was the first reporting period to include Chart after the acquisition closed July 16. Chart contributed $888 million in revenue and $156 million in EBITDA, for a 17.6% margin. Orders were $831 million, reflecting the timing of a large dry-cooler award that moved into the fourth quarter, according to Chief Financial Officer Ahmed Moghal.
The company said it has executed actions representing approximately $70 million of annualized savings toward its target of $325 million in annualized cost synergies within three years of the transaction’s closing. It expects more than $10 million of synergies in the second half of 2026, including $3 million realized in the third quarter.
Management expects Chart’s EBITDA margins to reach 22% to 23% in the second half of 2028. Moghal said the improvement is expected to come from cost synergies, a more favorable project mix as lower-margin work rolls off and LNG volumes increase, and operational and commercial improvements under the Baker Hughes Business System.
“I would not expect the progression to be perfectly linear,” Moghal said, adding that a more meaningful step-up is expected in 2028.
OFSE Performance and Mature Asset Strategy
Oilfield Services & Equipment revenue increased 6% sequentially to $3.66 billion, supported by activity in Latin America, Europe and the Middle East. Middle East revenue increased 17% sequentially. OFSE EBITDA was $659 million, while margins improved 50 basis points sequentially to 18.1%.
Simonelli highlighted Mature Assets Solutions, or MAS, as an expanding opportunity for the company’s upstream business. The offering combines subsurface, well, production, digital and selected IET capabilities to help customers improve recovery, extend productive asset life, maintain infrastructure and manage decommissioning or repurposing.
The company cited a multiyear contract with Pakistan’s OGDC involving more than 120 mature wells and an integrated program in Libya covering approximately 50 wells. Baker Hughes is targeting high-single-digit compound annual revenue growth from MAS-related business and at least $3 billion in revenue by 2030.
Outlook, Cash Flow and Middle East Considerations
For the fourth quarter, Baker Hughes forecast company revenue of $8.25 billion and adjusted EBITDA of $1.46 billion. The company expects IET revenue of $3.55 billion and EBITDA of $715 million; OFSE revenue of $3.6 billion and EBITDA of $640 million; and Chart revenue of approximately $1.1 billion with EBITDA of about $195 million.
Management raised the midpoint of its full-year EBITDA outlook to $5.265 billion and expects free-cash-flow conversion of 45% to 50%. At quarter-end, leverage stood at 2.5x, largely due to debt used for the Chart acquisition. Moghal said Baker Hughes expects to begin reducing debt in the fourth quarter, aided by free cash flow and proceeds from the announced Waygate divestiture, and remains confident it can reduce net leverage below 1.5x by the second half of 2028.
The company expects Middle East activity in OFSE to decline sequentially in the fourth quarter and return broadly to second-quarter levels. Simonelli said Baker Hughes remains constructive on the region’s long-term outlook, though the pace of normalization remains uncertain amid regional tensions.
For 2027, Moghal said the company expects company-wide revenue growth and EBITDA-margin expansion, with IET organic revenue growth in the low- to mid-single-digit range, similar growth at Chart from its second-half 2026 annualized base, and low- to mid-single-digit growth in global upstream spending led by international and offshore markets.
About Baker Hughes (NASDAQ:BKR)
Baker Hughes Company (NASDAQ: BKR) is an energy technology company that provides products, services and digital solutions for the oil and gas industry and other energy-related markets. Its offerings support the exploration, drilling, completion, production and maintenance of energy assets across the lifecycle of a project.
The company’s oilfield services and equipment business provides technologies such as drilling systems, well completions, artificial lift, subsea equipment, production chemicals and well intervention services.
