Baker Hughes Delivers Record IET Backlog and 54% Surge in Orders Despite Middle East Disruptions
In its first-quarter 2026 results, Baker Hughes (NASDAQ:BKR) emerges with significant milestones—highlighted by a record $33.1 billion backlog in the Industrial & Energy Technology (IET) segment and a 54% year-over-year jump in IET orders. Notably, these achievements come amid persistent supply chain challenges and disruptions in the Middle East.
Record IET Orders Position Baker Hughes for Long-Term Growth
The IET segment demonstrated exceptional resilience, posting $4.89 billion in Q1 orders—a 21% increase sequentially and a 54% jump year-over-year. This marks the third straight quarter of IET orders exceeding $4 billion, underscoring strong momentum in key markets like LNG, power systems, and climate technologies. The IET book-to-bill ratio climbed to 1.5x, pushing its backlog to an all-time high.
| Key Metric | Q1 2026 | Q1 2025 | YoY Change |
|---|---|---|---|
| IET Orders ($M) | 4,887 | 3,178 | +54% |
| IET Revenue ($M) | 3,350 | 2,928 | +14% |
| IET Backlog ($B) | 33.1 | - | Record |
Portfolio Strategy Strengthens Balance Sheet
Baker Hughes executed on its portfolio management plan, closing strategic deals and divestitures that are expected to bring in approximately $3 billion gross proceeds in 2026. Highlights include the sale of Waygate Technologies to Hexagon for $1.45 billion and a joint venture in surface pressure control, along with the sale of its Precision Sensors & Instrumentation line. These moves bolster liquidity and enhance focus on high-growth segments.
Underlying Profitability Improves Year-over-Year
Despite a sequential dip tied to asset sales and business mix in OFSE, Baker Hughes delivered solid earnings quality with net income of $930 million and adjusted EBITDA up 12% year-over-year. The adjusted diluted EPS rose 13% from a year ago. Free cash flow and operating cash flow saw a retrenchment, primarily due to the divestiture impacts and working capital shifts, but the company’s cash position sharply improved with $14.76 billion on hand following recent transactions.
| Financial Metric | Q1 2026 | Q4 2025 | Q1 2025 |
|---|---|---|---|
| Net Income ($M) | 930 | 876 | 402 |
| Adjusted EBITDA ($M) | 1,158 | 1,337 | 1,037 |
| Adjusted Net Income ($M) | 573 | 772 | 509 |
| Adjusted Diluted EPS ($) | 0.58 | 0.78 | 0.51 |
| Operating Cash Flow ($M) | 500 | 1,662 | 709 |
| Free Cash Flow ($M) | 210 | 1,341 | 454 |
OFSE Faces Pressure, But Key Contracts and Regional Growth Shine
Oilfield Services & Equipment (OFSE) orders were down both sequentially and year-over-year, mainly reflecting the surface pressure control divestiture and ongoing regional headwinds. However, Baker Hughes secured major contracts with Petrobras, YPF, Marathon Petroleum, and international players in Turkey, Kenya, and Argentina. Subsea and Surface Pressure Systems orders rose 22% year-over-year, spotlighting demand resilience in select segments.
Technology Awards Fuel IET Backlog and Market Reach
The IET segment led multiple strategic technology deployments—supplying critical compressors, turbines, and power generation solutions to LNG projects in Qatar and the U.S., advanced geothermal projects, grid stability in Australia, and major AI-powered data centers. Collaboration with Google Cloud on AI-enabled power optimization and new contracts in emerging carbon capture, geothermal, and hydrogen markets are aimed at unlocking future revenue streams.
Takeaway: Strong Strategic Execution Amid Global Uncertainty
Baker Hughes’ first-quarter 2026 performance underscores its ability to balance operational discipline and growth investments, despite industry disruptions in the Middle East. With record IET backlog, a solid balance sheet, and a steady stream of innovative project wins, Baker Hughes looks positioned for continued momentum—even as macro and geopolitical risks linger. Investors may want to watch how new technology partnerships and divestitures shape future quarters, as the company’s strategic pivot could drive incremental value ahead.
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