Baker Hughes Earnings: Solid Results Indicative of Strong Performance Over Next Several Years

Baker Hughes had a strong second-quarter performance, thanks to continued strength in international and offshore oil and gas markets as well as elevated liquefied natural gas contracting activity worldwide. Total revenue jumped $6.3 billion with an adjusted EBITDA margin of 14.4%, up 25% and 144 basis points year over year, respectively. We maintain our outlook regarding Baker Hughes’ growth prospects over the next five years and forecast average annual revenue growth of 9% with an average adjusted EBITDA margin of 17%. Our $34 per share fair value estimate and no-moat rating are unchanged following results.