Baker Hughes targets Horizon 2 IET orders above $45B as it forecasts $27.35B 2026 revenue and integrates Chart
View original at seekingalpha.comBaker Hughes targets Horizon 2 IET orders above $45B as it forecasts $27.35B 2026 revenue and integrates Chart Earnings Call Insights: Baker Hughes (BKR) Q2 2026 MANAGEMENT VIEW * Chairman, President & CEO Lorenzo Simonelli framed Q2 as a quarter where “disciplined execution and the strength of our diversified portfoli…
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Q3 2026 guidance is company revenue of $6.87 billion and adjusted EBITDA of $1.205 billion, assuming Middle East activity remains broadly unchanged through year-end
60% confidenceAsked about the drivers of record IET orders and margins on recent orders
60% confidenceBaker Hughes is not providing Chart segment guidance today and will provide updated guidance ahead of Q3 earnings
60% confidenceUncertainty centers on project timing, local supply chains, Gas Tech equipment backlog conversion, and the aeroderivative supply chain; free cash strength reflected milestone and advanced payments, with working capital driving quarter-to-quarter variability
60% confidenceGAAP diluted EPS was $0.68; excluding $0.04 of adjusting items, adjusted diluted EPS was $0.64
60% confidenceOFSE revenue was $3.45 billion, EBITDA $605 million, margin 17.5%, a significantly stronger-than-anticipated quarter despite Middle East disruptions
60% confidenceData centers are one of the clearest near-term commercial opportunities with Chart, alongside actionable gas infrastructure opportunities across hydrogen, helium, CO2, nitrogen, oxygen, and longer-term adjacencies in space, geothermal and mining
60% confidenceChart will operate as Baker Hughes' third reporting segment with integration driven through 18 work streams
60% confidenceOFS outperformance came from stronger activity outside the Middle East, better-than-anticipated Middle East product revenue, and SSPS revenue up about 10% sequentially
60% confidenceIET orders doubled year-over-year to a record $7.1 billion with a 2.2x book-to-bill ratio and RPO up 19% to an all-time high of $37.1 billion
60% confidenceAsked what drove OFS outperformance and the moving parts for the second half
60% confidenceAsked about capacity expansion plans through 2029 and implications for mix, pricing, and CapEx
60% confidenceDisciplined execution and diversified portfolio offset anticipated Middle East headwinds
60% confidenceGiven longer GTE cycle times, a meaningful portion of the GTE order mix extends beyond 2027
60% confidenceNew gas turbine/generator capacity coming online by 2029 could support nearly $5 billion in annual Power Systems revenue opportunity at full utilization
60% confidenceAsked about puts/takes for IET in the second half and why free cash flow conversion was unchanged
60% confidenceThe expected $5 billion of annualized revenue capacity by 2029 implies roughly a 3-4x increase versus ~$1 billion last year, with paybacks below 2 years and gas turbines representing roughly half the opportunity
60% confidenceHorizon 2 IET orders are now expected to exceed $45 billion, up from a prior expectation of exceeding $40 billion, supported by $12 billion of IET orders year-to-date
60% confidenceFY2026 revenue and adjusted EBITDA are now expected to modestly exceed prior expectations, guided to $27.35 billion revenue and $4.85 billion adjusted EBITDA
60% confidenceIET revenue was $3.3 billion, EBITDA $678 million, margin 20.6%, driven by favorable backlog pricing and Baker Hughes Business System execution
60% confidenceFollowing the Chart acquisition, leverage will temporarily increase, with a return to 1-1.5x net leverage expected within 24 months
60% confidenceAdjusted EPS was $0.64 with a record 18.3% adjusted EBITDA margin
60% confidenceFull-year IET orders guidance raised to $17.5-$19.5 billion, with IET revenue midpoint at $13.5 billion (assuming Waygate closes at year-end) and IET EBITDA midpoint of $2.725 billion
60% confidenceAsked about commercial synergies with Chart
60% confidenceQ2 adjusted EBITDA was $1.23 billion, exceeding the high end of guidance
60% confidenceRecord IET orders were driven by data centers, LNG, and gas processing, including $2.6 billion of Power Systems orders (~150 gas turbines), with data centers accounting for $2.2 billion of Power Systems orders; pricing discipline supports IET margins in 2027 and beyond
60% confidenceTotal company bookings were $10.5 billion with free cash flow of $1.1 billion and net debt to adjusted EBITDA declining to 0.1x
60% confidence