Why Is Baker Hughes (BKR) Up 2.3% Since Last Earnings Report?

A month has gone by since the last earnings report for Baker Hughes (BKR). Shares have added about 2.3% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Baker Hughes due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Baker Hughes Q2 Earnings & Revenues Beat Estimates

Baker Hughes Company reported second-quarter 2026 adjusted earnings of 64 cents per share, up 2% year over year. The figure beat the Zacks Consensus Estimate of 51 cents by 25.5%.

Revenues of $6.74 billion surpassed the consensus mark of $6.49 billion by 3.9%. However, the figure declined 2% from the year-ago quarter.

Better-than-expected quarterly results reflected strong OFSE execution, firm IET profitability and record order momentum.

Orders & Backlog 

Remaining performance obligations, a measure of contracted future work, reached $40.06 billion, up 18% year over year. The increase reflected a record Industrial & Energy Technology (“IET”) backlog, which rose to $37.09 billion and an increased Oilfield Services & Equipment (“OFSE”) backlog, up 10% year over year.

Orders across all business segments totaled $10.5 billion, up 49% from $7.03 billion recorded a year ago, driven by record order intake from the IET business segment. Notably, IET orders nearly doubled from the prior-year period, supported by continued momentum in Gas Technology Equipment and Gas Technology Services.

The company posted a total book-to-bill ratio of 1.6, indicating that orders exceeded current-quarter revenues.

Baker Hughes' IET Momentum Strengthens

Industrial & Energy Technology revenues were $3.29 billion, flat year over year. Lower Gas Technology Equipment and Industrial Solutions revenues, including the effect of the PSI disposition, affected segment results in the quarter, offset by growth across the other product lines.

Segment EBITDA increased 16% from the year-ago quarter to $678 million. The EBITDA margin expanded 280 basis points to 20.6%, driven by pricing, productivity, cost-out initiatives and favorable foreign exchange movements. The positives were partly offset by lower volume and inflation.

BKR's OFSE Execution Tops Guidance

Oilfield Services & Equipment revenues fell 5% year over year to $3.45 billion, mainly due to the SPC divestment and Middle East disruptions. North America revenues increased 1%, while International revenues declined 6% year over year.

OFSE EBITDA declined 11% to $605 million, while the margin contracted 120 basis points to 17.5%. Sequentially, however, revenues and EBITDA each rose 7%, driven by higher volume, pricing, cost actions and foreign exchange.

Baker Hughes Expands Margins and Cash Flow

Adjusted EBITDA increased 2% year over year to $1.23 billion. The adjusted EBITDA margin improved 70 basis points to 18.3%, with company-wide results exceeding the midpoint of management's guidance.

Operating cash flow was $1.35 billion compared with $510 million in the corresponding period of 2025. Free cash flow in the second quarter totaled $1.11 billion compared with $239 million a year earlier. Net capital expenditures were $236 million, including $135 million for OFSE and $85 million for IET.

BKR's Balance Sheet Reflects Chart Funding

BKR ended June with cash and cash equivalents of $15.73 billion. Long-term debt stood at $15.48 billion at the end of the second quarter, reflecting the financing associated with the all-cash Chart Industries acquisition.

The company paid $228 million in dividends during the second quarter and made no share repurchases. Management remains focused on deleveraging after the Chart closing and targets net debt to adjusted EBITDA of 1x-1.5x within 24 months.

Baker Hughes Broadens Its Industrial Portfolio

The company completed the Chart acquisition, adding thermal management, air and gas handling, compression and lifecycle-service capabilities. Baker Hughes expects Chart to become a third reporting segment beginning in the third quarter of 2026.

Management expects run-rate cost synergies of $95 million in year one, $230 million in year two and $325 million in year three. The integration plan also targets commercial benefits from a larger installed base, expanded aftermarket reach and broader digital penetration.

2026 Expectations

For the third quarter of 2026, Baker Hughes expects revenues of $6.57-$7.17 billion and adjusted EBITDA of $1.12-$1.30 billion. OFSE revenues are projected at $3.40-$3.70 billion, while IET revenues are forecast at $3.17-$3.47 billion.

For 2026, the company now expects revenues of $26.65-$28.05 billion and adjusted EBITDA of $4.6-$5.1 billion. IET order guidance was raised to $17.5-$19.5 billion, and the Horizon 2 IET order target increased to more than $45 billion for 2026-2028.

The outlook excludes guidance for the Chart segment. It assumes that Middle East activity remains broadly consistent through year-end and that logistics inflation and supply-chain challenges remain in line with recent trends.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 17.06% due to these changes.

VGM Scores

Currently, Baker Hughes has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Baker Hughes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Baker Hughes belongs to the Zacks Oil and Gas - Field Services industry. Another stock from the same industry, Halliburton (HAL), has gained 7.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Halliburton reported revenues of $5.71 billion in the last reported quarter, representing a year-over-year change of +3.7%. EPS of $0.55 for the same period compares with $0.55 a year ago.

For the current quarter, Halliburton is expected to post earnings of $0.58 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -0.5% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Halliburton. Also, the stock has a VGM Score of D.

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This article originally published on Zacks Investment Research (zacks.com).

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