Image source: The Motley Fool.
DATE
Wed, Oct. 28, 2026
CALL PARTICIPANTS
- Vice President of Investor Relations – Chase Mulvehill
- Chairman and Chief Executive Officer – Lorenzo Simonelli
- Executive Vice President and Chief Financial Officer – Ahmed Moghal
TAKEAWAYS
- Total Orders — $10.8 billion, representing 31% year-over-year growth driven by broad-based demand across the portfolio.
- Adjusted EBITDA — $1.42 billion, increasing 14% year over year as Industrial & Energy Technology growth and the Chart acquisition offset a decline in Oilfield Services and Equipment results.
- Adjusted EPS — $0.70, up 2% year over year as strong operational performance more than offset higher interest expense.
- Industrial & Energy Technology RPO — $39.4 billion, a record level representing 23% year-over-year growth and enhancing long-term revenue visibility.
- Industrial & Energy Technology Orders — $5.9 billion, achieving a book-to-bill ratio of 1.7 for the quarter.
- Data Center Orders — $4.9 billion year to date, representing an approximately 500% increase year over year as the company expands its power generation footprint for AI infrastructure.
- Free Cash Flow — $769 million, including approximately $200 million of transaction-related cash costs associated with the acquisition of Chart.
- Industrial & Energy Technology Revenue — $3.48 billion, up 3% year over year despite a 3% headwind from the divestiture of the Precision Sensors and Instrumentation business.
- Oilfield Services and Equipment Revenue — $3.66 billion, increasing 6% sequentially driven by a 17% revenue increase in the Middle East.
- Chart Segment Revenue — $888 million, reflecting the company’s results for the period following the acquisition close on July 16, 2026.
- Industrial & Energy Technology EBITDA Margin — 19.7%, expanding 90 basis points year over year due to favorable price and volume.
- Oilfield Services and Equipment EBITDA Margin — 18.1%, up 50 basis points sequentially reflecting higher activity and pricing.
- Cost Synergies — $70 million, already executed toward a three-year annualized target of $325 million from the Chart integration.
- FY 2026 Adjusted EBITDA Guidance — $5.27 billion at the midpoint, updated to reflect year-to-date performance and the Chart acquisition.
- FY 2026 Industrial & Energy Technology Order Guidance — $21.5 billion to $23.5 billion, representing a significant increase from initial expectations.
- Horizon 2 Industrial & Energy Technology Order Target — $50 billion plus, raised by $10 billion to reflect accelerating demand for power and gas infrastructure.
- Mature Asset Solutions Revenue Target — at least $3 billion by 2030, with a targeted high single-digit compound annual growth rate.
- Leverage Ratio — 2.5, with management targeting a reduction to less than 1.5 by the second half of 2028 through debt paydowns.
- IET Digital Orders — $1 billion year to date, representing nearly 20% growth year over year.
- Power System Orders Target — $15 billion over Horizon 2, driven by data center and distributed power requirements.
- LNG Equipment Orders — $4 billion year to date, with potential to reach $5 billion for the full year 2026.
- Backlog Conversion Rate — 33% of the combined Gas Technology Equipment and Climate Technology Solutions backlog is scheduled to convert to revenue in 2027.
- Chart Segment EBITDA Margin Target — 22% to 23% by the second half of 2028, driven by cost synergies and operational improvements.
- Total Addressable Market — $400 billion plus, expanded following the acquisition of Chart to include thermal management and cryogenics.
Need a quote from a Motley Fool analyst? Email [email protected]
RISKS
- Moghal stated, “However, logistics have become more challenging and could create additional pressure as we continue to execute projects for customers in the region,” referring to the potential impact of Middle East disruptions on segment execution.
- Moghal noted that after a period of high activity, “we expect Middle East activity to decline sequentially in the fourth quarter,” creating a near-term headwind for the Oilfield Services and Equipment segment.
- Simonelli indicated that AI-driven power demand growth “will not be linear,” noting that permitting and infrastructure constraints can affect project development timelines.
SUMMARY
Baker Hughes Company (BKR -7.36%) reported third-quarter results highlighted by record backlog in its Industrial & Energy Technology segment and the strategic integration of Chart. Management reported total orders of $10.8 billion and updated its full-year 2026 earnings expectations to a midpoint of $5.27 billion in adjusted EBITDA. The company stated that structural demand for power generation to support AI infrastructure and the expansion of natural gas systems is driving a significant upward revision in its three-year order targets. Executives indicated that while near-term geopolitical conditions in the Middle East require a measured approach, the company remains focused on deleveraging its balance sheet and achieving long-term margin expansion through the deployment of the Baker Hughes business system across its newly expanded portfolio.
- Simonelli noted the critical importance of power availability for data centers, stating, “In many cases, the key constraint is not demand for compute capacity but how quickly customers can secure reliable power.”
- The company reported that incremental data center capacity in the United States alone could require approximately 18 billion cubic feet per day of additional natural gas supply by 2035.
- Management introduced a targeted growth plan for its Mature Asset Solutions offering, which Simonelli stated “represents a growing opportunity that expands our role across the life cycle of producing assets.”
- CFO Moghal indicated that the conversion profile of the company’s backlog is extending due to longer lead times for power systems and LNG projects, which will influence revenue linearity in 2027.
- The company confirmed that it expects global liquefied natural gas capacity to reach approximately 800 million tons per annum by 2030, supported by accelerating project final investment decisions.
- Management expects to realize more than $10 million in cost synergies from the Chart acquisition in the second half of 2026, with the segment projected to reach 22% to 23% EBITDA margins by late 2028.
INDUSTRY GLOSSARY
- RPO: Remaining Performance Obligations, representing the total amount of revenue expected from existing contracts that have not yet been completed.
- IET: Industrial & Energy Technology, a business segment focusing on gas technology, power generation, and industrial solutions.
- OFSE: Oilfield Services & Equipment, a business segment providing products and services for upstream oil and gas operations.
- MAS: Mature Asset Solutions, a suite of servic
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
