Baker Hughes (BKR) 25Q3 Update

BKR reported 25Q3 GAAP diluted EPS of $0.61 vs. 24Q3’s $0.77 and my estimate of $0.66.  Net income was lower than expected due to transaction-related costs and a negative swing in the fair value of equity securities (Abu Dhabi National Oil Company).  Total revenue of $7.01 billion was up 1.5% from a year ago and 1.8% above my estimate.  Operating income rose 1.9% to $948 million on higher goods gross margin, which more than offset a decline in services gross profit, and was 5.8% above my estimate.  Non-GAAP EPS was $0.68, compared with $0.67 last year and my estimate of $0.65.  Adjusted EBITDA was $1.23 billion, up 2.0% from 24Q3 and 3.3% above my estimate.

The company booked orders of $8.21 billion in the quarter, up 22.9% YOY, due mostly to a 64.5% surge in Gas Technology orders to $3.1 billion.  Oilfield Services & Equipment (OFSE) orders rose 6.9% to $4.1 billion.  Other orders, namely Industrial Technology and Climate Technology Solutions, increased 6.8% to $1.07 billion.  The company recorded more than $4.0 billion in Gas Technology orders for only the third time in its history, while Subsea Surface and Pressure System orders of $1.2 billion, included in OFSE, were a record.

BKR continues its portfolio optimization actions.  In July, it agreed to acquire Chart Industries, a specialist in gas and liquids process technologies for industrial and energy markets, for $13.6 billion. In August, it completed the $540 million acquisition of Continental Disc Corporation, expands its pressure management solutions within the flow control products business.  The divestitures of its Precision Sensors & Instruments business and nearly all of its stake in its Surface Pressure Control business for total proceeds of $1.5 billion are expected to close by year end.

Management raised the midpoint of its 2025 revenue guidance by $300 million to $27.4 billion and the low end of its adjusted EBITDA guidance from a range of $4.45-$4.90 billion to $4.63-$4.85 billion.  My 2025 projections anticipate total revenue of $27.8 billion, adjusted EBITDA of $4.75 billion, GAAP diluted EPS of $2.46 (vs. $2.51 previously) and non-GAAP EPS of $2.55 (vs. $2.52).  For 2026, my projections, which do not reflect portfolio actions, show revenues of $29.2 billion, GAAP EPS of $2.85 (vs. $2.86 previously) and non-GAAP EPS of $2.82 (vs. $2.83).

Since my last report on July 24, BKR’s stock is up 3.7%, underperforming the S&P 500’s 7.3% gain and the OSX’s 18.1% gain.  At $46.92, BKR is valued at 19 times projected 2025 GAAP EPS and 18.3 times projected non-GAAP EPS.  Its forward multiples on projected 2026 earnings are 16.4 and 16.6, respectively.  Its recent underperformance vs. peers partially reverses a two-year period of outperformance  Based its continuing strength in orders, I am raising my price target from $44 to $46, which equates to about 16 times projected 2026 GAAP and non-GAAP EPS.  With the potential total return of only 0.3%, I am maintaining my performance rating at “3” (Neutral).

This is a summary of my recent update report on Baker Hughes Company (BKR). To obtain a copy of the report, please reach out to me using the contact information provided below.

December 17, 2025 (Report published on December 15, 2025.)

Stephen P. Percoco
Lark Research
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