On its third-quarter 2026 earnings call, held on Oct. 28, 2026, Baker Hughes (BKR -1.11%) raised its full-year earnings guidance as data center expansion fueled demand for power generation equipment. For long-term investors, the pivot beyond traditional oilfield services toward industrial power infrastructure creates a broader customer base with long-duration visibility.
Three things management said stand out.
1. Data Center Power Demand Drives Horizon Order Targets Higher
Rapid growth in artificial intelligence workloads is driving demand for on-site power generation. As power grid constraints persist, customers are purchasing gas turbines within the Industrial and Energy Technology (IET) segment to secure reliable electricity.
Since introducing the Horizon 2 IET order target, approximately a year ago, we have increased it by $10 billion to more than $50 billion.
— Lorenzo Simonelli, Chairman and Chief Executive Officer
2. Integration of Chart Delivers Cost Savings Ahead of Plan
The acquisition of Chart expands the company’s addressable market to $400 billion across thermal management and carbon capture. Early operational integration is already reducing overhead expenses while unlocking cross-selling opportunities across combined customer accounts.
We have already executed actions representing approximately $70 million of annualized savings. We remain on track to achieve $325 million of annualized cost synergies within 3 years of closing the acquisition.
— Ahmed Moghal, Executive Vice President and Chief Financial Officer
3. Mature Asset Services Provide High-Margin Recurring Revenue
Upstream energy producers are shifting capital toward maximizing production from existing fields. Baker Hughes is capitalizing on this shift through its Mature Asset Solutions (MAS) offering, targeting a high single-digit compound annual growth rate (CAGR) by combining subsurface analysis with production technology to extend field life.
Our growing pipeline and disciplined approach gives us confidence in the long term growth potential of MAS. We are targeting a high single digit CAGR in MAS-related revenue achieving at least $3 billion by 2030.
— Lorenzo Simonelli, Chairman and Chief Executive Officer
Looking Ahead
Record order backlogs are locking in visibility past 2027. While longer equipment lead times mean revenue converts across a multiyear horizon, expanding manufacturing capacity and monitoring supply chain execution position Baker Hughes to convert orders into revenue.
The strength in orders continues to drive backlog higher and enhance our visibility into future revenue.
— Ahmed Moghal, Executive Vice President and Chief Financial Officer
By expanding into high-growth power infrastructure and industrial cooling markets, the business is building a resilient revenue model that depends less on short-term commodity cycles.
Now our focus is execution and converting the full potential of Baker Hughes into durable earnings growth and meaningful long-term value for our shareholders.
— Lorenzo Simonelli, Chairman and Chief Executive Officer
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Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
