Baker Hughes Earnings: International Oil and Gas Activity Will Strengthen Its 2023 Performance

No-moat Baker Hughes posted a solid start to 2023 as strong offshore activity offset the seasonal weakness typically reflected in first-quarter results and as the firm converts its everincreasing gas technologies backlog. Total revenue was $5.7 billion, up 18% year over year and down 3% sequentially. Firmwide adjusted EBITDA margin also declined slightly—about 240 basis points quarter over quarter—due to seasonally depressed oilfield service demand, a higher mix of lower-margin equipment revenue, and continued supply chain challenges. Despite modest near-term headwinds in the quarter, our longer-term outlook is unchanged, and we maintain our $34 fair value estimate following the results.