Texas-Based Baker Hughes Warns Of $100-$200 Million EBITDA Risk From Tariffs In 2025

Texas-based oil and gas services provider Baker Hughes Company BKR stock is trading lower on Wednesday. On Tuesday, the company reported first-quarter FY25 revenue of $6.43 billion, flat year over year (Y/Y), which missed the consensus of $6.49 billion.

Revenue was supported by growth in the Industrial & Energy Technology (IET) segment, partly offset by a decrease in Oilfield Services & Equipment (OFSE) business.

Adjusted EPS rose 19% Y/Y to $0.51, beating the consensus of $0.48. Orders fell 1% Y/Y to $6.46 billion in the quarter, with a book-to-bill ratio of 1.0x.

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Adjusted EBITDA surged 10% Y/Y to $1.037 billion, led by higher volumes in IET business, including higher proportionate growth in Gas Technology Equipment (GTE), productivity, structural cost-out initiatives, and higher pricing in both segments.

Operating cash flow stood at $709 million, and free cash flow was $454 million in the quarter.

Dividend: Baker Hughes’ Board of Directors declared a quarterly dividend per share of $0.23, payable on May 16, 2025, to shareholders of record on May 6, 2025.

Buyback: The company bought back shares worth $188 million in the quarter.

Outlook: Looking ahead to Q2 FY25, Baker Hughes expects revenue of $6.3 billion—$7.0 billion (vs. a consensus of $6.88 billion) and EBITDA of $1.04 billion and $1.20 billion.

Also, Baker Hughes sees revenue from the IET business of $3.00 billion—$3.30 billion and from the OFSE business of $3.30 billion—$3.70 billion.

For FY25, Baker Hughes sees a ‘high degree of variability’ due to Trade policy and tariff uncertainty and a tempered outlook for 2025. In particular, the company expects tariffs to have an estimated potential impact of $100 million—$200 million on 2025 EBITDA.

Lorenzo Simonelli, Baker Hughes chairman and chief executive officer, said, “Although our outlook is tempered by broader macro and trade policy uncertainty, we remain confident in our strategy and the resilience of our portfolio.”

In February, the company disclosed that Ahmed Moghal had been appointed as its new chief financial officer.

Investors can gain exposure to the stock via iShares U.S. Oil Equipment & Services ETF IEZ and VanEck Oil Services ETF OIH.

Price Action: At the last check on Wednesday, BKR shares were trading lower by 4.37% at $36.69.

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