Baker Hughes (BKR) 19 Oct 222022 Q3 Earnings call transcript

Good day, ladies and gentlemen and welcome to Baker Hughes Company Third Quarter 2022 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Mr. Jud Bailey, Vice President of Investor Relations. Sir, you may begin.

you. Thank and call. Baker everyone XXXX third to conference earnings welcome morning, Hughes the quarter Good

me our release with website CFO, today Here are be at Brian and Lorenzo can Worrell. our bakerhughes.com. Simonelli; The on earnings found we earlier Chairman issued our and CEO,

and provide of risks As reminder, filings future that of our involve number of will performance assumptions. discussion course These Please statements SEC conference call, of results and for a statements. this are and the review cause the could we to during a forward-looking website not guarantees a materially. differ factors actual

over As measures Lorenzo. operating can of release. income non-GAAP in found GAAP call our earnings to will you to know, be I With and reconciliations that, other the turn

and multiple Jud. in for generally results Good We were third everyone managed with performance with strong you, successfully us. challenges. morning, pleased TPS joining our quarter while thanks OFS, Thank

saw well strong performance also momentum continued with TPS. as We OFE as orders in

quarter demand deal softens of In inflationary even we an weight durable which higher we I likely inflationary of multiyear pressures believe global grown is rising Operators more oil in price have remain discipline, strongest the spending. that a around volatility these financial in during a the As continued upstream global sizable mentioned global with commodity and interest price for the gas environment. face in on challenges, the dealing great currencies. expect world earnings our unpredictable the XXXXs, environment upturn and cycle and uncertain. as call, pressures. The of expect into interest economic and market, increasingly a to growth since outlook remain fluctuations economy has constructive the supportive macro we the spending rate of outlook under upstream Despite second rates a oil the fundamentals translate underlying shown

exceptionally gas This In natural weakness. discipline increased regions already and for levels are global to in an surging high elevated should tighter record LNG upstream could market tight XXXX. redirected situation from XXXX. global prices also other from and conducive switching that a as an created has has slowed that Europe’s but in gas in demand to get on gas largely down demand double-digit However, prices, coal This of resulted even a is to offset over market. factors markets, gas’ developing the cargoes any supply next some production natural countries. stressed constraints investment believe in of and to remained driving the support energy LNG X LNG transition. ensure significant position we multitude has that key expect as the still required XX price part years growth We spending tensions to

also the this attractive LNG facing current However, is while is projects, industry new in new price inflationary the demand pivotal a price-related for and time for for cost markets projects. of destruction and developers higher capital pressures occurring with environment a some

navigate the years. established scale, players to in and Those projects particularly maybe and As shifting risks believe result, and the advantaged projects favor maybe the a LNG financial faster-to-market landscape brownfield with modular that in uncertainties. coming with the diversity utilize of lines strength we

impactful Inflation likely Reduction development. In front, particularly Europe the energy development U.S., clean movements should the recent significant Act energy and United support CCUS hydrogen, direct in air be are new the capture. policy a of On in green accelerating in States help increase the and to the

sizes ultimate the of changed addressable areas, expected While attractive previously incentives we for our have market expectations tax the ahead these could accelerate in not development forecast.

new of conditions our bill portfolio the that create We economic will for also favorable energy investments. believe

of team. the announced changes our the better focus, within and will business and the scale execution, capitalize structure and our backdrop, position macro Baker sharpen is a into new streamline our markets. and for management resegmentation also IET. month, executing resegmentation the OFSE the Hughes This leadership will on and Baker elevate a preparing on range dynamic of simplify restructuring These economies out better reduction on structure scenarios changing we operational of improve executive in This organizational will what segments. and cost two segments: to million Hughes while the and at Given two with XX% $XXX energy focused new control. company flexibility is reporting of Last quickly creating least across

and customers these investments as continue we changes Baker for Hughes to growth invest early-stage shareholder markets expect to and Importantly, tuck-in In increase Baker to optionality energy through evolve. we in and Hughes the continue our opportunities new M&A. long-term improve portfolio and value parallel,

Integrity investments to year, most earlier announced the is the our of that addition ESP, Generation the and early-stage the like positions Access Global technologies strategic In notable will Power well portfolio. technology ESP our HIF the to Other our we Mosaic, recent in and and enhance more position. enhance the include in acquisitions broadens acquisition division NET Perhaps our of capabilities portfolio Group, Power which quarter complement acquisitions strategic BRUSH third of several Quest and participate also which this electrification. directly us current transactions inspection in

of update the these as sector shifting all and win. continues activity combination and growth In drilling Mexico business remain are well while expected West Brazil continue Saudi chain they are the growth strengthening, execute more XXXX pressures clearly Latin and the seeing in the to for increases East. growth and moderate. growth by pricing is segments. markets, Now East, region, countries West are services is are optimistic on positioned gradually net team multiple well noticeably Oilfield completions Latin favor best and we move improving. Internationally, capture the offshore and exhibiting I the beyond. be supply led our America, markets. Africa an Arabia Africa, with to in UAE and In projects to In Similarly, we into region. international of to visibility continues while the our also near-term now the Middle best In trends will Guyana The Middle outlook on give in America, the you offers offshore Services, in each of of forward in that

last the and off this pricing growth we Looking double-digit XXXX. portfolio year years. continued ahead, growth are remains America, activity end international after our and over through North drilling across of expect to growth beginning firm in while In significant the X level completion

will of fourth driven Operationally, by with our the our opportunity track OFS this achieve the to operators. and in an we XXXX. prices, on generally Although quarter activity modest remains more in is growth public solid well business XXXX and of the of U.S. XX% market EBITDA through end year dependent be dynamic levels executing oil target expect on for

the and year, completions, Over wireline. services, the drilling artificial generated of have solid we margin course including lift lines, across improvement product multiple

enhancement has has key quarters. and a margin margin in by supply generated now rate production of driver improvement the been our After improvement quarters inflation, business. chain Importantly, chemicals for continued consecutive sequential chemicals difficult several impacted two

a back levels of Although to to margin rates in be and not more sight to increases are XXXX. further normalized prior line levels, we at expect yet have

Moving to TPS.

to billion and delivered in driver several TPS performance orders. billion and represented We XXXX. results projects market continued to in where LNG, XXXX expected $X Operationally, in on the pressure TPS services. orders for TPS XXXX remain primary solid on despite forward to in pressure challenges The euro continues further to be for third are and XXXX. and move FID growth quarter another multiple in The $X on generate track solid navigated

our inflationary FID expectation Although have MTPA interest progress pressures projects, XX and reaching XXX comfortable of to XXX reached including some the rising the FID of on by remain year-to-date. has costs that with end slowed MTPA we XXXX,

projects pleased XXXX to During various by support the deploy we of technology orders. with of have another quarter awarded New third Fast received for be Hughes’ order to have represents we their facilities the Energy were project. Fast across X the order Baker LNG This NFE we New now and quarter, globe. Fortress booked second since the LNG offshore MTPA will Fortress

power for Additionally, major equipment generation to an LNG a project we awarded North in were deliver America. order

maintenance which first ENI-led the awarded operations coast the quarter, Coral to XXXX. also This FLNG we for service new the Hughes announce facility Mozambique. equipment were deepwater monitoring floating contract off LNG FLNG, to turbomachinery at of service agreement builds in an the and contract new operating During existing Coral is pleased Baker a of on

As services Nevada’s based part suite supplied trains capabilities to of the LNG, the last as the digital award Jafurah unconventional follows a received its providing technology. scope, to additional Outside total Aramco’s for gas motor-driven Saudi System award diagnostic support Baker compressors a electric other well services order of project. bringing Hughes project. will Bently and quarter, Jafurah This growing XX fully leverage of on monitoring gas TPS remote X as to processing compressor similar XX an supply to by

collaboration grow Hydrogen Arabia. complex Edmonton, at Air in green with Products, hydrogen to supply contracts NEOM ammonia the also Alberta We energy continued securing technology high-pressure project a for compressor the process zero and advanced turbine ratio in net for generator steam the our Green to Saudi

energy million. from With still Air new so million. $XXX orders orders expect far for to this these total over year XXXX awards around our be We $XXX Products, new energy

with orders of Next, should another next trend offshore years. continues quarter over maintain growth OFE. couple and in subsea year-to-date. and to Equipment, Flexible order The order on as in the Despite well the China saw momentum Flexibles key positive Oilfield continued disappointed remain these positively billion orders with in solid profitability in record business the markets Brazil for the customers. retaining team $X as we with incumbency over winning in underlying trends, OFE

layers rectify including $XX Update in highlighted and savings management have actions OFS. issues, removing an announced we several from As integrating capabilities cost in with to month, multiple million initial last our Strategy and we functions these

deficiencies OFSE the Beyond engineering the by across we further expect margin leveraging program, drive resources facilities the improvement supply organization. chain border of right-sizing and footprint, to cost-out addressing OFE’s shared

wholesale scale a the are for this of which reassessment part will of subsea determine process, and and business. this size costs we out business, well equipment the the appropriate drive into As

confident identified ability and to business. We have this profitability feel already improve multiple rationalization opportunities increasingly the facility in about

provide update an XXXX. expect on the of We first strategic half of in the review SPS to

electrical continues Finally, challenged the the operating ongoing in to quarter, chains and in Digital for chips Solutions, order activity by resilient to the remained environment be third supply components. disruption but

to training. by award growth well expanding X agreement as software secured plant-wide enterprise Bently potential its and SaaS cloud-based our base and project powered in as first the Augury Augury the multiyear existing alliance marks the brings together offerings. During Nevada software deliver installed through drive hardware The analytics the solution across quarter, to customer’s services demonstrates Europe. scope and This digital entire advanced differentiated with a System

uncertain, remains side, improvement of allocation timing and team’s seen we operational effectively which the delivery on restricting chips, while our have is and to execute of some efficiently On backlog. size the ability availability in of

For qualify circuit control, the as aspects we to boards the chips. utilize additional suppliers standardized has to redesigning moving acted, more well team as

issues, we to addressing supply DS also Beyond recently create technology. combination the announced TPS chain energy industrial and with of portfolio the the

integrating early and end we cost the TPS, of at to We XXXX. layers of are million of $XX the functional in portfolio savings stages by with initial the removing generate which least expect

and We across has integration energy and to and enable that complex. important lower for for closer driven several challenges expect significant unique presented solutions Hughes and positioned position evolving Baker the commercial better carbon the an to uniquely will reliable, XXXX landscape. company and IET more decisions be technological some from efficient benefits energy industrial believe

while we towards we recent with we that for navigate confident our volatile class are these team. As challenges corporate support XXXX, can preparing and world from our the environment, are we a head actions

spending improving cycle intently execution, unfolding our on We multiyear wave FIDs. and focused upstream capitalizing on operational of are the LNG the

Brian years would I in of finance transformation and and formation experience Replacing XX about I After more Brian CFO turn X XXXX. Brian November I’d team. over mining years has Hughes our CFO, experience the our Brian our XX and transform sectors Worrell be not value. of role Nancy the believe will to the make to continue thank has strategy of and Buese, instrumental who increase announcement accounting but will I years that, instrumental than in over the of has leadership sectors We Nancy’s like Brian. as an as will with Brian, and for separation in leaving played call key Baker Baker be company GE. the X Baker driving multiple CFO, Hughes. effective many our and call we will the energy all executive Before our to like in a as to only also Hughes been to as from over be shareholder leader aspects years that he well public turn With experience.

segment and partially move four TPS. driven $X.X begin XX% will Solutions and driven into for by by total up segments. Thanks, Year-over-year, increases a orders details. offset billion, the by Lorenzo. Digital OFE in I decrease then the up sequentially the were Orders company quarter with X% results OFS all and across were

We in RPO at billion, in of are orders was following obligation $X.X performance sequentially. up pleased X% ended at the performance the quarter sequentially. year. orders RPO up sequentially X% the $XX.X with half services flat first Equipment the strong billion, ended and $XX.X billion, Remaining

Adjusted million was cost as and Digital well X% company and million. partially XX% Operating the which in sequentially restructuring million, excludes was projects was quarter restructuring, OFE for global businesses. equipment announced Adjusted was X.X up by our operating income the $XXX X.X. Revenue across the reduction quarter recently primarily XX% the Solutions and impairment, up billion, by revenue was income of lower book-to-bill optimization X% by driven charges and year-over-year. OFS for income charges. in total book-to-bill TPS and as the were segments. in up for other sequentially was offset $XXX ratio OFS The our operating Our up driven driven footprint volumes quarter in third increases by in the was reorganization $XXX Year-over-year, and all quarter quarter $X.X separation OFE.

up rate the sequentially million up sequentially. our costs in quarter XXX operating points. X.X%, in XX% XXX XXX XX% was adjusted Year-over-year, Corporate up up up income basis quarter. XX.X%, million, income Adjusted the rate Our $XXX was were up was the rate EBITDA quarter operating and basis sequentially points points adjusted points year-over-year. Adjusted EBITDA and XXX year-over-year. $XXX basis for was basis

costs expense quarter be the For and flat Depreciation expect million corporate levels. third we fourth to $XXX to quarter, quarter. compared the was amortization in

million. slightly per quarter, levels. loss GAAP million. million loss. our from $XX Included value D&A change expect $XXX to $X.XX. in expense Income quarter fair loss a non-operating is increase GAAP Net fourth $XX investment diluted was loss in share, we which the in the the per was earnings was in For interest tax expense net $X.XX. Adjusted of CX.ai, in share third was quarter from recorded share was per other

was cash the quarter Turning statement, flow cash the flow to free in $XXX million.

by we expect to For improve sequentially earnings the cash higher fourth driven and seasonality. quarter, flow primarily free

year. highlighted EBITDA quarter, cash million we repurchasing expect shares XX.X $XXX Hughes average program, share execute per second quarter, million in As our below repurchase of $XX.XX the still to we for we be price for to free flow the share. third conversion Class the Baker an A adjusted continued XX% at In on from

segments, to our and which OFSE like into the we go fourth results, to on business the X. I business I in that remind into would went into and quarter October be Before will effect changing segment everyone which IET, the went OFSE structure reporting segments, two IET,

from to reporting our two, the provide across segments go to more aim will different four is transparency businesses. we Although

we OFSE revenue, Going be and income will reporting forward, operating total EBITDA.

revenue provide the also X business of and subsea solutions four will and completions across lines surface production We well pressure construction, intervention systems. Tier and measurements, disclosures

OFSE Africa. Europe, Middle will provide breakout North and America; CIS, Sub-Saharan of revenue Asia; We geographic America; regions: East, into Latin a four

IET EBITDA. operating revenue, total reporting We be will income and

six provide equipment, business services, gas will lines disclosure gears other. monitoring, of inspection, industrial Tier We and X and valves condition across tech tech also revenue pumps, the gas

historical X During financials years in will of format. provide the fourth quarter, this restated we

Latin Revenue up the thoughts in was led International offset you I East, billion, X% basis Operating in XX.X%, through and sequentially. up America Operating cost Starting revenue double-digit margin by revenues margin North rate growth with XX% Caspian in XXX America walk our results income North was Asia forward. Middle volumes, Oilfield quarter you inflation. partially pricing primarily Russia increases outlook will land. low higher the margins increased in the offset Europe. and with up on the driven higher $X.X and quarter points. up by points was lower revenue sequentially. sequentially. by rate in Now X% going were Services. give $XXX increasing detail segment more margins in and XXX sequentially, by XX% with the was America, Year-over-year, sequentially The Pacific basis million, was partially increased

activity As we prospects quarter, underlying leveling look improve with ahead to fourth continue with North the fundamentals America growth to but internationally strong off.

increase depending in revenue of expect business. completing expect our Russia and quarter, a and XX% the still For sequential solid EBITDA we timing XX% rates sale the margin on OFS between of fourth

initial would market how in broad D&C Overall, the increase I all some to OFS is Although market international the total In still basis. across believe early, year-over-year on the we spread mid-double continued it to regions. like digits expect see you virtually geographic in likely on we we XXXX. a international is that give thoughts growth low market, spending to

market We macro prices risk activity those factors. America, add In oil in public on therefore, and, in and exit North longer on being dependent growth some international less would to double-digit increase decrease rate areas. prices. activity the said, of or impact drive still more global visibility, to nature we private oil modestly operators to scenarios. is while expect their cycle a be there could spending will expect modestly operators number XXXX negatively far of That depending Our dynamics

potentially should year exit be margin fourth generate rate solid than the in to macro in in spending level this XXXX. line in would As believe OFS growth D&C revenue will of double-digit growth the With we rate. a in of to XXXX into type result, translate mid we digits OFS and high North backdrop, XXXX. full the with expect this higher for activity margin America type double quarter EBITDA

lower Equipment. $XXX the Orders decrease and strong SPS by removal Oilfield up lower to cost loss Revenue as driven lower driven the quarter in OFE’s year-over-year removal down Operating $XX year-over-year volume, operating and and SPS SPS lower growth in was in well partially and driven of by down services, SDS, and offset offset XX% and by X% quarter Flexibles driven million, million $XXX from subsea of drilling SPC million, in was a the services. for results. from by SDS. as inflation a Moving consolidated million, was primarily $X primarily partially of systems removal primarily increase year-over-year by the were Flexibles, SPC the rate cost productivity. margin by volumes

For the slightly fourth cost flat operating the with higher income under breakeven absorption suspension due quarter, to be we expect following revenue of recent contracts. to to still sequentially below

Looking to basins recovery further set as several we XXXX, to ahead offshore expect is continued in activity strengthen.

mid and backlog growth to revenue growth in by services. OFE in high expect subsea single-digit driven conversion We

by We and the expect with upside potential breakeven of the restructuring for be operating timing to driven efforts. around our income year any cost-out

up in contracts, Equipment America. by XX% revenue mix for foreign for Operating $X.X versus in and in award down in Next, basis quarter flat Services movements. offset orders was orders, was a was increase XX LNG productivity Orders NFE by equipment up year-over-year I for currency conversion inflation. equipment by upgrades, favorable for and partially major billion, and offset Operating North by billion, million, awards liquefaction by in services driven power currency the the were down for lower services XX% were Turbomachinery. up driven cost Service X% by TPS equipment down and decrease in year-over-year will quarter project driven lower by cover year-over-year. transactional upgrades. revenue an partially services down the Revenue generation margin year-over-year rate contractual $X.X orders on primarily movements. backlog by the quarter X% points XX.X%, supported X% were and X% was contractual foreign services increases offset an Equipment $XXX was a year. income prior driven year-over-year year-over-year.

strong the fourth in to orders still be $X and quarter expect billion quarter, expect billion another range. in to TPS we the orders $X For XXXX

XXXX. volume quarter this on from revenue We year-over-year TPS to rates moderately TPS be basis by the mix revenue backlog a higher increase outlook, a expect With the a equipment driven in double-digit a expect basis quarter conversion. fourth to fourth due we year-over-year higher lower to of planned compared in margin on equipment

billion Looking continued we to range $X production. by onshore offshore into XXXX, and orders in in TPS LNG expect strength supported the billion $X

XXXX the to primarily expect We in grow TPS revenue XX% by backlog driven low in conversion. equipment range

by However, well any similar growth backlog this revenue to as movements. year, will in movements be impacted also project currency foreign as

margin higher and to IAM to step-up in expect side, margin the as technology modestly in well spending our as we a in equipment due areas mix new commercialization. decline XXXX operating On to growth drive CTS rate income R&D

in up orders for year-over-year and by Controls Solutions, was Nexus X% saw year-over-year. offset Sequentially, partially were PSI, XX% driven was XX% down lines. operating Digital Sequentially, lower largely and volume million, $XXX product quarter offset in and continue power in markets, partially transportation for all driven as Nevada. was million, driven volume driven Finally, by for up orders. $XXX and lower all by by markets volume. million, by higher income electronic to oil shortages, $XX the Bently X% in quarter inflation through cost end industrial across end higher partially was down by the cost orders gas quarter Digital up income improvements we offset We Operating Revenue Solutions Sequentially, were with XX% volumes. lower. revenue volumes the higher X% year-over-year work lower and by productivity up higher

expect quarter, and fourth we revenue margin growth the in rates. a sequential operating increase strong strong For to see

energy and weakness. to businesses global likely expected into due by will DS remain we improvements our expect offset assumes revenues be conversion chip XXXX, backlog from partially shortages declines across mid-single as increase This digits, robust. all markets revenue economic Looking to which ease growth industrial

drive expect these margins. in solid operating to volume increases growth We

condition Baker move a & a merger GE Hughes the on Gas years. over strong has will the transformation a and energy outstanding we to the great turn to balance technology It with and team well sheet to Oil Hughes long company. financial of positioned has Lastly, continued and you. support way call This With finance team. over I execute come since all the leading Lorenzo is for with their a before and would in the company thank pleasure Baker with Q&A, like Jud. all I is that, to work into been back to

Brian. Thanks, questions. call Question-and-Answer Operator, let’s the Session open for

Instructions] Evercore. [Operator question from our you. from Thank And first comes West James

Your line is open. now

Hey, Jud. good and morning, Lorenzo, Brian

Hi, James.

Hey, James.

a as you Brian, depart Hughes. Baker Thanks companies these to see all [indiscernible] work all for together. And sad last your putting help hard the and years several

in Yes. Thanks, And being Great. down Hill I’ll James. the you down. see Chapel at

Perfect. Exactly.

Looking forward to it.

So Lorenzo, and a oil of formation market, curious we much in capital bit seen a there hasn’t the uncertainty think as about cycle. of but the here, obviously, gas cycle is

terms we’re the me significant wonder international markets, remarks. years the kind on of as a customer your customer And and in to ‘XX you as expand growth what for it you’re looks several there of I particularly you further your conversations, so the in in offshore in that if your activity and of beyond? like and into highlighted where outlook prepared little seeing bit could go we

as you And in global and into reporting And mentioned overall it’s where going you’ve as from the maybe off broader let’s as you pre-prepared at challenges James. likely an as constructive. continued we’re not kick the weakness and free energy well economic is volatility industrial as two remarks, positioned at XXXX. definitely constraints in started. chain in supply segments, the seen look Sure, Yes. look I outlook feel technology you And Baker company, activity. Hughes, very we the But

Services we XXXX. spending and upstream in Oilfield spending a upstream On again, and the double-digit Equipment, multiyear see in growth upturn global

seen look back, you UAE. Middle Latin as offshore, the well at look you as with again, the market, come East Saudi As we’ve at America as international

X some see we look So mentioned on to a and feel it track in then good new next uptick remains the technology, we $X front, multiyear to as billion energy XXXX. movements energy the forward. at accelerate recent that you development. CPS look the generate on and LNG XXXX over the the And to energy XXX support some And as of new before as clean U.S.A. see We’ve the that likely we in MTPA orders to billion industrial upcycle. the XXX at go is years. – policy are the we upstream the $X in you regulations continue and and of to help Europe

And again, technology million the least from positions is us announced focus, constructive. and market. market provides an execution on sharpens our of then improves energy capitalize $XXX out. restructuring quickly better perspective So energy operational changing cost It to at our

So these we’ve heading we confident we are we’re into market volatility, preparing for the the while ‘XX, negate and can got backdrop.

past quite and for both great. and would That’s hydrogen the Okay. on kind on the I those frankly, two the if the thinking clean bill And in, how and hydrogen follow-up have and play IRA green the just significant I the markets. I you and for a of capture hydrogen that maybe both, you’re carbon and in dig could for side, if change kind benefits Does energy DCS of know timelines development debated of out. of versus kind or

you for And earlier hydrogen, for CCUS We positive as Reduction the be James. it provides look that, and also in green it conjunction investment Act, past think direct capture. decarbonization Infrastructure Yes. the again, with investments technologies. the significant Act, particularly Inflation critical will Jobs Sure, deployment at and and of incentives air

per gets the blue credit establishes $X up green You act mentioned hydrogen, a new kilogram to for kilogram. on and production per $X from hydrogen, and tax

of the to looking carbon factor increasing a credits a see how these out the capture storage And ton intensified also projects I be meaningful and bill will per per number CCUS, see that It’s attracting significant actually and there think the for have what we geologic from direct of Likewise XXQ. improvement Inflation tell passing the metric on $XX they a ton to can Reduction was you already XXX metric on capital. we proceed. So Act. makes capture. for tax in discussions since that that And are customer air

around and see conversations our air again, advances, direct conversations area, So with got in you these we’ve investments have more know, as standpoint technology a increasing that seen And we in particular, from capture. customers.

look for again, new above that orders end as XXX already we’ve So we XXX. we good And at for feel at at or XXXX. seen XXXX, energy, the going we’re to

Alright. Thanks, Lorenzo.

question And Bank you. from of America. Chase comes next thank from Mulvehill And our

now is open. line Your

morning, good Hey, everyone.

Chase. Hey,

morning, Good Chase.

Hi, Wall know to I Look, speak hate be you’re at and is Baker, to sad everybody you Street. I I day. I deeply see on Brian. going everybody, missed. everybody really go. mean, for know this I

can something there. So out really hate we before leave. or hopefully, drink a But you of grab to see get you

Chase. Definitely,

Yes. kind question about of I and pace quarter. I you in that at of guess same the capital every Obviously, kick XXX have about a continued you will allocation. buybacks, range ask off

step into free going the get is business continue going at base flow conversion better. to look it’s you get to cash better. to XXXX Obviously, You

– some with, could it’s do should pace have dividend, you flow cash the free So to continue it’s excess you cash of And continue with dividend, whether should what decide base buybacks. whether that special the continuing increasing have to to expand. whether it’s

of So think allocation how forward? about we should capital go we kind as

shareholders. here about no we how Chase. financial Look, real Yes, philosophy of returning our think change terms of policies capital in to in and terms

and of still are our stock XX% flow to committed We cash to XX% dividends to both shareholders back through free repurchases. returning

this worth strong record come or of to And that payout the since of And $XXX As you in got a we in if about quarter. fourth level $X.X out, first out, that months combine as year. the we X more with program to had is Hughes forming for as pointed our billion more exceeded we’ve bought in the and shareholders pretty you pointed shares, buyback Baker this we’ve million there year $XXX dividend healthy about already a back We’ve return will and new around annual likely coming XXXX. together track this you million, over year. or

look, now, back. see attractive cash So stock of that as buying right free an I our use flow,

strong see have forward, you’ll of shareholder this attractive I buyback consistent going as and is as not use some believe is cash As continue looking you to at buyback to time increased return dividend know, well think program right we time. the a us really to And stable, the we generate a combination continue as it. increases combination dividend about Ultimately, way think fluctuate free And an flow. a the policy. I in over

So right think like combo Baker given the as to I our going we’ve forward that past especially forward. is in strength as the what well of way investors feedback. And saying the and for it listened looks flow cash generation been what taking Hughes, this free portfolio and have the

makes It sense. Alright.

one is question, follow-up a As this Lorenzo. for maybe

to been business, has little been softer. past maybe strong. the you’ve a strategy On the the bit kind a business the Maybe subsea Flexibles of for business. Obviously, this announce potentially ultimately, business. of different strategy subsea to into obviously, looking at new has alternatives half had business, the SPS at you a look going you’re year of pretty do in with potentially next the first But what or

you’re what’s options what kind of exploring So some could when with business do potentially this business? we for the and go-forward it, this you lay of potential of about think could just out and you

as underway. Yes. Chase. SDS is of are And our have stated, Sure, a wholesale we business, doing reevaluation which we

and that increasingly rationalization feel identified a options we already evaluating of in the smaller, range facility strategy part this multiple more have We about our ability analysis two the a for And look major players. improve to we you confident are business. of opportunities. to first at good includes And balance profitability update XXXX. could a the that We other be complete this focused

clearly we feeling and got move visible to the to profitability. are So, looking about that progress, have synergies good the

multiple Yes. remember, orders quarters record we here row. business. of pipe well are in incredibly this will with thing incredibly flexible strong, got And And that’s sort doing a only of systems an two there franchise have just add here Chase, I parts the is

is So, with strategy And a it here. it are recently have what we by is bifurcated far am we in portfolio so made. changes the encouraged that the seeing I

to start updating little guys So, look you as more more. execute we a forward to

Great. Okay.

Sounds good. I will turn it back over.

from Jayaram JPMorgan. our you. question from And And [Operator Instructions] thank next Arun comes

now open. line Your is

we Hughes, to as appreciate have years. Brian, wish side the depart all the you over provided the the Firstly, Baker you we support but sell best you

Great. Thanks Arun.

questions. of couple A

this global First, is services being just the the recently in customers out a where my you question strength prices. given guess pushed of talked by about LNG on side, work your some LNG lost LNG first I have guys was revenue dynamic could And the of for for there perhaps, could as work XXXX? Lorenzo, mean for in rises, or is opportunity of maintenance Baker, this base perhaps what installed frame LNG? terms term a you in the segment longer catch-up services LNG Baker’s

not in look, there out bit. that we with customers forward. is be tailwind mean going look the a it the the coming right everything Arun, Hughes. well, on I This are services be service likely that as should revenue thing look, And just working through XXXX sitting in a that now push to contractually. anticipate out, add, big will The And revenue things But to can outages for all for We operators as that capitalize little given obviously higher started that LNG look is have some some lost on around here will of is fourth I happen and XXXX in up the commodity on our the of to a has transactional window CSAs, it’s start revenues lost did catch that for But do I to they push-outs that elevated in just to schedules not be as prices. generally move today should Yes. some out. we I maintenance. largely, six-month XXXX. well customers that. will If push services see will that Baker seen. start three-month based to look, in things wanted would there of see quarter I in as likely

have associated we guarantees those. with As you know,

place, those window keep to is there. a in there So,

a of transactional of it in sorts recommendations risk little in the side, terms they a flexibility, On things. have and bit of more excess things running a is those of but

past, the we have get those out actually revenue So, I in actually of where unexpected because more happen. things get seen service things when types pushed

see lost coming then I term business in again, are massive revenue. in I increase not is that longer and cycle let base a installed revenue So, And outlook the this definitely will with longer here seeing. is and what we Lorenzo comment on the

Yes. you again, the future, positive. LNG is at Arun, as look outlook

going MTPA this are comfortable that, more the years, Already LNG As I also year, into over of X coming we pipeline seen of LNG next XXX that’s ‘XX. course MTPA ‘XX have of see MTPA you XX and projects FIDs XXX to through mentioned, the the and projects.

You have base seen services. us Christi. announce at because installed goes XX%. look the the future, by that’s Corpus good Plaquemines, XXXX you for And the And up our Cheniere

mentioned, that. that As comes in Brian after

for that’s growing our is and beyond base and business. XXXX installed an positive So,

a maybe Lorenzo, follow-up. Great.

You of XXX reiterated couple MTPA MTPA XXX over your outlook to the next years.

did inflation think You financing are how and seeing you mention challenges, from some impacts about Driftwood.

context could see have just if or these opportunities of expect to some we you so offset And I challenges that into the you wanted put of some brownfield seen? do to

I would of environment become has acknowledge the independent in for the developers. more Again, challenging, that Yes. some particular,

cost mentioned, in financial fastest I say may coming LNG inflation, are diversity, utilize market Also chain uncertainties. favor established you to to the bottlenecks. in and be and risks shifting those design that As scale, placed generally, would landscape more years. the supply would better navigate particularly modular the see strength projects and brownfield advantaged with we the of And players, the projects

is more smoother in over course cycle the it pace, confident change XXX prolonged. plausible of MTPA and again, some MTPA build that becomes more years. the X But next the the projects feel to I XXX So,

Thank much. you very

Marc next And question you. thank [Operator Bianchi from Instructions] Cowen. from comes And our

open. now is line Your

better go start – it to back quarter, do Hey. we ‘XX? $XXX can think level below were with is of to looks the see they that in bit a you. of where and needed margins that here they those Thank XXXX get understanding in couple quite getting digital you were still maybe to back revenues million to perhaps going. like get back fourth if likely wanted and is of get I where a years. are If and kind where how we in margins What you those margins a

a weakness. Yes. industrial I growth some I orders revenue XXXX, increase revenues we and from digit remain do to specifically we robust. look the in into start some chip mid-single assumes which due a Marc, improvements the think the I would businesses see pullback economic energy say as from to conversion and would bit of if likely range, backlog I DS of revenue to shortages of in terms ease markets see of may the expect

look, year, stabilized electronics that output. them while next the will levels I all don’t balancing are level to getting have of given that, level better next markedly we So, conversion margins just getting see the I those right mean and year. back don’t ‘XX see of the of now, I

to absorption And that ability hampered So, impacts the output. we going are there. drive to probably cost be by growth obviously margin and

doing higher not to that there costs no is side issues levels to are reason should back We completely a take chain be supply lot cost some we to the this us. continue But behind on get out. of once or business these those

outlook worked thing he when in a of The get have chips long-term to I things now, lot about the and on right can supply get chain talked the it So, redesign. is electronics still this being story it, to highlighted terms But we will able one through output. we and the is good. so pretty Lorenzo a say, of

We have programs. done engineering

new from suppliers. resourcing are We

situation been And demand they everything on. have the So, that’s global as changes, control, you there. some see to give team the will I think improvement within executing our have credit, I

And so I Super. just you your will Okay. what for much others said, time. echo have Brian. Thank

going to you. are We miss

Thanks Marc.

for question – you Next bet.

Next question for Lorenzo.

in term from press And from You ‘XX curious, just what’s should then this mentioned how of acquisition opportunity? the that the remarks in and business think power prepared I announced about gen sort we ‘XX? longer release, in am like the BRUSH. you the contribution

it Hughes we are capabilities playing as industrial very energy bring it technology. we into Look, Baker role And electromechanical an see and BRUSH enhances our excited Yes. within portfolio. important the to

that significant as role procure in you process various with upstream critical we provided for at as and gas If decarbonizing applications. many within years. the a It’s portion us And a the playing look BRUSH, electrification oil been we motors trusted it’s for sector industrial sector. supplier electric well the see of

to So, an chain part the we to it’s going that of value address. important be wanted

of work is shape generation motors. together can BRUSH electric in-house, the that Now next to we

power supply, distributed and also gas, oil of and storage. eLNG, duration at specific applications power long energy You look the

the And it’s us we perspective UK, it’s to diversifying to continue if across that, technology Eastern got the have going and So, covered presence view as Republic, in to BRUSH to of in Europe adds and facilities spectrum allow located holistic LNG Czech from well. Netherlands. got its a leverage solutions

feel future the contributions company. the and to its So, good about elements

would as million I if I $XX And Yes. some you look the got around of as in say be at $XX mark. should have specifically would to first increased at revenue range. EBITDA, an costs the acquisition, in depreciation integration XXXX, well million it’s year amortization million I And there. and Marc, $XXX the probably expect remember, looking But

to probably going million that is $XX range. the million $XX to level in be So,

get income So, you are those looking you the once relatively at things, very nice the early level some accounting definitely operating purchase margins but have some And coming you small, through strong and of integration through EBITDA. this. some

have So, technology to excited we this are now. really in-house

good. you much. Very Thank so

Goldman from Instructions] Sachs. next Neil question our comes [Operator And you. And thank from Mehta

you working Thank a you, Brian. pleasure been It’s here. with

question modeling-specific. first is The more

segment-by-segment through it You modeling think as we into but key put help you think be have us together provided different if could and sequentials would I and thought next the quarter. by components components XQ it go about helpful all segment, of guidance

And in that slightly as plays will team should they be And of firm the that in sale a really revenue within clearly mid-single-digit at done the result swing would have as said, of some last should that pretty higher are take margin and starting chemicals solid range. quarters. to would revenue expect happen Neil, here XX%. in On of of increase timing the rates improve the the towards the and the and look, line leveling they strong to would timing Yes. expect backlog step not Russia and of sequentially done fourth and as couple that If look, which only quarter end XX% activity with But how And I flat is and out, from off look XX% fourth business, for be see say to back we have Claudia growth say, just North the outstanding at there. Maria the between I to I reason America, a a International the OFE, the an I based sequential year. quarter. what quarter is prospects the overall, EBITDA standpoint, OFS. of the have continues job especially from will conversion. the be XX%, sight on I

lower Switching we to still that talking me to business, backlog we income, be that will on Solutions, been primarily what breakeven you growth in given suspension the given due of given increase below the Russia a strong gears and really the about, cost where under-absorption Digital talked and that in strong levels XXXX. through margin little through. We the we the fourth of question contracts then year-over-year rate. come have coming bit, we a basis a compared here would quarter sequential I we expect should in to turbo, see about growing operating backlog double I the are to year-over-year from revenue strength be that talked rates digit due services And And to see there. conversion in to and well. likely have will show look, higher modestly revenues up Marc’s expect a But operating mix equipment would heard be equipment fourth margin an basis. as the standpoint, quarter on

with be I what to are how overall and looks the out that from on So, adding it moving an see there and up all based of today. pieces, quarter in folks standpoint the about thinking line

is real managing through. significant getting and of team lot the moving pieces here, no So, that change a but

FX. super, I FX the the euro about maybe talk was as just had the what’s could only other around model helpful. has business, meant just question The Yes. to changes That move you super was for in in And and sensitize how just well. the

the at have – was in all if a $XXX back $XX about in or step And about and the we turbomachinery what think haven’t year-over-year of roughly seen look exchange the look, Sequentially seen And in in will like at think $XXX revenue was million I and time. mean a it was I pressure. we Look, agree the we that I bulk anything Yes. standpoint, million. long take that rate, XXX I change a it around euro impact turbo, year-over-year from that revenue million so. of recently,

the you you remember, do income have dollars from And that translation So, hedge from lower so euros, in perspective you in economically. coming on income line. lower top gives have But obviously, standpoint, a we that.

moves. given And some hedges of those in those money actually where hedges just the were – are everything

around, the some at the net Baker line. the is will the manageable segment but as in that. choppiness than you results much bottom level less largely does move see impact overall FX at But So, potential

the bigger impact see You revenue. in

team. Thanks Perfect.

Neil. Thanks

from And comes you. question thank next Instructions] And our from [Operator Dave Anderson Barclays.

open. Your line now is

Dave. Hi

So, the fast in projects the you for New LNG two track mentioned release, Fortress.

You compressor have modular supplying also trains Venture been Global. to

that seem would aside of any of least financial this at quicker could your but technology your it a wondering, liquefaction. just am customers, I think enable a larger build-out technology So, kind considerations I LNG or from build-out would of

about and XXX figure You the ton the overall have for XXX per talked XXX size. annum ultimate to million

But push LNG So, my I about number could could question ‘XX, potentially change how we favor? thinking presumably potentially market your is, that trains do that mean smaller, ‘XX. you higher? talk in just faster are

forward, we likely well Dave. we projects XXX the that coming I modular mentioned in fast advantaged projects Definitely, stated as And particularly and the going brownfield also design are XXX as to to those outlook. the again, at you market And LNG as good Yes. that feel utilize years. about mentioned, look be

going found also and gas to we would situation. I continue we XXXX. we more traction gaining go of now. players coming lead you right tons look still I different complete and have to right energy at as this off we solution definitely, could the will fast to for a aspect As monitor need field is look LNG offering and said as are that that on always million is And say to XXX it continues. the time, modular now, the LNG. it, being have for at are outlook into by those reserves at capitalize the the And wouldn’t look

portfolio the it’s you it’s if modular, And helpful. that if that think fast, solution if having if is the in if Yes, very set. about would think Lorenzo it’s add stick Dave, it’s in what build, frame, that large Hughes just mentioned, I Baker I has

the can some So, there. of see the And we as help to as fast global LNG are could positioned markets you and demand. think well I ultimately, certainly modular well alleviate ultimately lead having more the pressure in offering

that just it’s it’s early tailwind just I volatility of definitely, to think we the kind think right a now, I call are seeing. Baker. overall But given too for

trains equipment into That’s what of I I on in in but XX – OFS the have just Saudi. the necessarily really the that was talked the you the can I have relationship I was wouldn’t Basin would the wondering there? about where drilling side just on be equipment side. and sort I understand And fit take you Because growth prospects. now for And versus start huge there, am a does been the us kind the also getting sort that normally see alongside if equipment East thought would the of business have ADNOC the compressor But thought business, still also at. sticking side, kind Jafurah could the if in account have bigger would you OFS Baker’s you to have Middle growing bigger of but OFS. help I of opportunity

a frame little So, bit? that just us for could you

again, long offshore standpoint. other from and our Dave, compression look as regards you to both and as Saudi as in presence, with a the well and generation we in equipment history onshore have UAE at East, again, countries got Middle both Yes, the a power

both being going the So, forward. that again, of considerable we business both of have going like we again, we look And very at and positive the business the there, have positioning prospects forward. growth sides

you. Thank Okay.

would you. Q&A our And to last Lorenzo to now Simonelli call question. over remarks. was closing thank back of like I And that turn the for End

everyone to you joining today. our for call Thank earnings Great.

to Operator, multiple end endeavors. strategy. from and the And forward with wanted strong third our we pleased challenges OFS, in the and again, we to successfully results Baker wish call. navigate preparing are with actions we that with and call, OFE look strong and a challenges with to Overall, our in I Baker Before some X. Thank you on well taking him Nancy thoughts. leadership, also, you our of long-term quarter continues in TPS these Hughes confident our performance while orders soon. can performance close also we team. managing TPS. were closing leave to with support his both thank for and welcoming world-class execute I support environment, recent volatile Hughes want may future are for again for the the to you his forward corporate you team on out and November speaking to the I all friendship now time I look Brian we

Ladies and you participating the thank gentlemen, program. for in

Everyone, You may great disconnect. day. have all a