Baker Hughes Company (BKR) — 2Q 2026 Earnings Preview

1. Earnings Preview

Key Takeaway: The setup into BKR’s 2Q print is constructive but asymmetric — IET orders are the single biggest swing factor and consensus is sitting at a level the company has beaten by 30–40% in each of the last three quarters, while OFSE remains the known drag with Middle East disruption baked in.

Baker Hughes heads into its 2Q 2026 print with a bar that looks beatable on IET but appropriately cautious on OFSE. Management guided 2Q total revenue of $6.5 billion and adjusted EBITDA of $1.13 billion on the April 24 call, with IET EBITDA specifically guided to $670 million and OFSE EBITDA to $540 million — both reflecting a meaningful Middle East headwind that assumed the conflict continued through end-June without further escalation. Consensus has barely moved since that guidance was issued (current 2Q revenue consensus of ~$6.50 billion vs. guidance of $6.5 billion; EBITDA consensus of ~$1.136 billion vs. guidance of $1.13 billion), suggesting the Street is essentially anchored to management’s own numbers rather than pricing in upside. IET orders are the real wildcard: consensus sits at ~$3.64 billion for 2Q, well below the $4.9 billion record set in 1Q 2026 and the $4.0–$4.9 billion range of the prior three quarters — a reset that may prove too conservative given management’s explicit confidence in achieving at least the $14.5 billion full-year midpoint. The stock has given back roughly 11% over the past three months (vs. XLE flat to slightly positive), compressing the NTM EV/EBITDA multiple from ~13.2x to ~10.95x, which means the stock is no longer pricing in a beat — it is pricing in execution risk. The wildcard is the Chart Industries acquisition, which closed July 16, 2026 — just 11 days before this print. Management will face intense scrutiny on integration costs, pro-forma leverage, and the revised combined-company financial framework. Any incremental color on synergy realization pace or the updated IET order target (management signaled >$40 billion for Horizon 2) could be the most market-moving element of the call, independent of the 2Q numbers themselves.

2. KPIs & Consensus Expectations

Key Takeaway: Consensus is a low bar on IET orders (~$3.64B vs. $4.9B actual last quarter) and essentially in-line with management guidance on revenue and EBITDA — the bigger swing factor is whether IET order momentum has sustained above $4B for a fourth consecutive quarter, and whether OFSE margins held better than the guided 16.7% amid Middle East disruption.

Table 1 — 2Q 2026 Current Quarter Snapshot (All Key KPIs)

Sources: Visible Alpha Consensus and Actuals Data (Total Revenue, Adj. EBITDA, Adj. EPS, IET Orders, IET EBITDA Margin, OFSE EBITDA Margin, Free Cash Flow); BKR 1Q 2026 Earnings Call transcript (April 24, 2026) for management guidance figures. Note: 2Q 2026 Adj. EPS consensus of $0.485 reflects the EPS revision momentum series (July 2026 snapshot). IET EBITDA Margin consensus of 20.5% and OFSE EBITDA Margin consensus of 16.9% are from Visible Alpha as of July 24, 2026.

Table 2 — Beat/Miss History: Last 8 Quarters (Top 2 KPIs: Adj. EBITDA & IET Orders)

Pattern: BKR has beaten Adj. EBITDA consensus in all 8 of the last 8 quarters (avg. surprise ~+5.7%), and has beaten IET Orders consensus in all 8 of the last 8 quarters with an average surprise of ~+18.6% — the Street has consistently underestimated IET order momentum, and the 2Q 2026 consensus of $3.64B implies the same pattern may repeat. Source: Visible Alpha Consensus and Actuals Data.

3. Guidance & Commentary Evolution

Key Takeaway: Management’s guidance posture has been unchanged since the April 24 earnings call — no formal revision to 2Q or FY2026 guidance has been issued — but the May 27 Bernstein conference added important qualitative color: the data center order target is being revised upward (from $3B over 2025–2027 to a higher figure), and management expressed increasing confidence that the Horizon 2 IET order target will exceed $40 billion.

Sources: BKR 1Q 2026 Earnings Call transcript (April 24, 2026); BKR Bernstein Strategic Decisions Conference transcript (May 27, 2026); Visible Alpha Consensus and Actuals Data (current consensus figures).

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates for 2Q 2026 have been essentially flat since the April 24 earnings call — revenue consensus moved only +$0.1B and EBITDA consensus moved only +$0.1B from the post-print baseline — indicating the Street has not revised up despite management’s confidence language. For FY2026, estimates have moved modestly higher, suggesting analysts are building in some IET upside for the back half while keeping 2Q anchored to guidance.

The estimate revision picture is notably static: 2Q 2026 revenue and EBITDA consensus have barely moved from the post-print baseline, confirming the Street is anchored to management’s own guidance rather than independently modeling upside. The one exception is IET Orders, where consensus has risen +9.4% since the April 30 baseline — still well below the $4B+ run-rate of the prior three quarters, suggesting meaningful upside optionality if order momentum has sustained. FY2026 estimates have drifted modestly higher (+0.7% revenue, +1.0% EBITDA), consistent with analysts building in some 2H IET recovery while keeping OFSE cautious. Source: Visible Alpha Consensus and Actuals Data.

5. Stock Performance

Key Takeaway: BKR’s post-1Q rally (+10% in the first week) has been fully reversed — the stock is down ~8.4% since the April 23 earnings date vs. XLE +5.5% and S&P 500 +3.9% — driven almost entirely by multiple compression (NTM EV/EBITDA from ~13.2x to ~10.95x) as OFSE Middle East risk and Chart acquisition leverage concerns weighed on sentiment, not by estimate cuts.

BKR vs. XLE vs. S&P 500 — Indexed Performance Since 1Q 2026 Earnings (April 23, 2026 = 100)

Sector ETF used: XLE (Energy Select Sector SPDR Fund) — appropriate for BKR’s energy technology and oilfield services sub-sector. Indexed to 100 at April 23, 2026 (1Q 2026 earnings date). Source: Yahoo Finance / Stock Price Data.

Performance Decomposition (NTM EV/EBITDA): Over the 3-month window, BKR’s stock declined ~11.2% while NTM EV/EBITDA compressed from ~13.2x to ~10.95x (-17.2%), indicating the stock’s decline was driven by multiple contraction rather than estimate cuts (NTM EBITDA estimates were actually revised slightly higher over the period). The 12-month picture is more constructive: BKR +28.2% with NTM EV/EBITDA expanding from 8.87x to 10.95x (+23.4%), reflecting the market’s re-rating of BKR as an industrial energy technology company. The current 10.95x multiple represents a meaningful discount to the 12-month peak of ~13.2x, suggesting the stock has de-rated back toward a level that does not fully price in IET execution.

6. Material News & Developments

Key Takeaway: The Chart Industries acquisition closing on July 16 is the single most important development since the April 24 earnings call — it transforms BKR’s financial profile, adds ~$4B in annual revenue, and will dominate the 2Q call narrative around integration, leverage, and the combined-company framework.

• Jul 16, 2026 — Chart Industries Acquisition Closes: Baker Hughes completed its all-cash acquisition of Chart Industries at $210.00/share, funded via $6.5B in U.S. senior notes + €3.0B in European notes (issued March 2026) plus $2.0B in new term loans (Bank of America $1.0B + UniCredit $1.0B, 2-year maturity). This is the most transformative event since the April earnings call and will drive the 2Q call narrative on leverage, integration, and the combined-company IET framework. Implication: Pro-forma net debt/EBITDA spikes at close; management has guided to reduce to 1.0–1.5x within 24 months via FCF and divestitures.
• Jun 22, 2026 — EC Commitment Discussions (8-K): BKR and Chart confirmed they were in discussions with the European Commission regarding possible commitments to secure Phase I clearance. Proposed commitments were not expected to materially impact the commercial rationale. Implication: Regulatory risk was flagged but ultimately resolved; Chart closed on schedule in July.
• May 27, 2026 — Bernstein Strategic Decisions Conference: CEO Lorenzo Simonelli confirmed the data center order target (originally $3B over 2025–2027) is being revised upward, noting 1Q 2026 Power Systems data center revenue of $1B matched all of 2025. He also confirmed the Horizon 2 IET order target will exceed $40B and reiterated new energy revenue guidance of $2.4–$2.6B for 2026. Implication: Upward revision to data center targets is a positive read-through for IET order momentum in 2Q.
• May 21, 2026 — EC Form CO Filed (8-K): Baker Hughes filed a Form CO with the European Commission, initiating the Phase I review period for the Chart merger. Based on prescribed timelines, BKR continued to expect closing in July 2026. Implication: Regulatory process was on track; no material delay to the acquisition timeline.
• Apr 2026 — Waygate Technologies Divestiture Announced: BKR announced the sale of Waygate Technologies to Hexagon for ~$1.45B in cash. Combined with the PSI sale to Crane ($1.15B, closed Jan 2026) and the SPC joint venture with Cactus ($344.5M, closed Jan 2026), total 2026 gross divestiture proceeds are expected to reach ~$3B. Implication: Portfolio management is tracking well ahead of the $1B incremental target; proceeds support deleveraging post-Chart.
• Apr 2026 — HMH IPO: Baker Hughes’ minority-owned drilling equipment company HMH completed its IPO, raising ~$200M. Implication: Additional liquidity event contributing to the ~$3B gross proceeds target for 2026.
• Jul 21–24, 2026 — HAL and SLB 2Q 2026 Earnings: Both major OFS peers reported 2Q results ahead of BKR’s July 27 call. HAL reported international revenue of $3.4B (+6% YoY, highest 2Q in a decade despite Middle East disruption); SLB reported total revenue of $9.0B (+3% sequential) with Middle East revenue down 13% sequentially but offset by strength in Latin America, Europe/Africa, and Asia. Both companies confirmed Middle East activity is recovering from conflict lows but not yet back to pre-conflict levels. Implication: Constructive read-through for BKR OFSE outside the Middle East; Middle East recovery pace remains the key variable.

7. Insider Transaction Activity

Key Takeaway: All insider transactions since the April 24 earnings call are 10b5-1 planned sales — no discretionary open-market selling and no open-market buying. The cluster of sales by the CEO, CFO, and two other officers in May–July 2026 is notable in size but entirely pre-planned, limiting the negative signal value.

All transactions are Form 4 code “S” (sale) with overall_10b5 = True, confirming these are pre-scheduled 10b5-1 plan executions. No open-market discretionary buys or sells were filed in the period. The CEO’s two tranches of 181,411 shares each (totaling ~362,822 shares) are the largest in dollar terms but are consistent with a pre-planned diversification program. No insider buying was observed, which is neutral rather than negative given the 10b5-1 context. Source: SEC Form 4 Filings Database.

8. Peer Commentary & Read-Through

Key Takeaway: HAL and SLB’s July 2026 2Q earnings calls provide the most relevant and timely read-through for BKR’s 2Q print — both confirm international OFS strength outside the Middle East and a gradual but incomplete Middle East recovery, while SLB’s data center segment growth (+80% YoY) is a strong positive read-through for BKR’s IET Power Systems order momentum. The Bernstein conference commentary from BKR’s own CEO (May 27) is included as a post-1Q intra-quarter update.

Note on scope: Only commentary from the last 60 days (May 27 – July 25, 2026) that addresses 2Q 2026 current-quarter conditions or forward conditions is included below. Stale commentary from prior-quarter earnings calls (e.g., HAL/SLB 1Q 2026 calls discussing 1Q results) is excluded.

8A. Halliburton (HAL) — 2Q 2026 Earnings Call (July 21, 2026)

OFSE Read-Through (Positive)

• International OFS at decade-high despite Middle East drag: HAL’s international revenue reached $3.4B in 2Q 2026, up 6% YoY — its “highest second quarter revenue in more than a decade, despite the disruption in the Middle East.” This is a strong positive read-through for BKR’s OFSE international business, which is 75% international and 50% offshore. If HAL’s international ex-Middle East grew at low double digits, BKR’s OFSE should show similar resilience outside the region.
• Middle East recovering but not back to pre-conflict levels: HAL confirmed “activity is recovering from the conflict lows, but the pace of recovery is still dependent on the day to day events in the region.” Land well construction was “largely steady” with “pockets of disruption in Iraq and Bahrain.” Offshore activity “increased to the quarter, though it’s not yet back to pre-conflict levels.” HAL’s Middle East/Asia revenue was $1.3B in 2Q, down 2% sequentially. Read-through: BKR’s OFSE Middle East/Asia guidance of a >20% sequential decline in 2Q was likely the right order of magnitude; the question is whether the recovery pace in 2H is faster than assumed.
• North America recovery underway: HAL reported North America revenue of $2.3B, up 7% sequentially, with “stronger activity, modest pricing gains, and further technology adoption.” Over 30 rigs were added to North America. Read-through: BKR’s OFSE North America business (guided “flattish” for 2Q) may have seen modest upside if the rig count recovery was broader than expected.
• International unconventionals and offshore as structural growth drivers: HAL highlighted wins in Algeria (Sonatrach first unconventional award), Argentina (Zeus fleet mobilized), Suriname (TotalEnergies deepwater), and Iraq (Integrated Field Management Service award). Deepwater markets in Brazil, West Africa, Norway, and East Med described as “really busy.” Read-through: Constructive for BKR’s OFSE subsea and surface pressure systems (SSPS) segment, which was guided to deliver a sequential increase in 2Q driven by backlog.
• Margin expansion expected despite mobilization costs: HAL guided C&P margins to improve 125–175 bps sequentially in 3Q and D&E margins to improve 25–75 bps, despite elevated mobilization and start-up costs from new contract wins. Management expressed confidence in “above normal incrementals” in 2027–2028. Read-through: Positive for BKR’s OFSE margin trajectory in 2H 2026 if Middle East recovers as assumed.

IET Read-Through (Limited / Indirect)

• Gas growing in unconventionals: HAL noted “gas growing not just in Conventionals, but Unconventionals” and highlighted “very little capacity at all in the market on gas substitution, zero at all on electric.” This is an indirect positive for BKR’s IET gas infrastructure and power generation businesses, but HAL’s commentary is primarily upstream-focused and does not directly address LNG, gas processing, or data center infrastructure demand.

8B. SLB — 2Q 2026 Earnings Call (July 24, 2026)

OFSE Read-Through (Constructive with Middle East Caveat)

• Broad-based international growth offset Middle East decline: SLB reported total 2Q revenue of $9.0B, up 3% sequentially, despite Middle East revenue falling 13% sequentially to $1.66B. Growth was driven by Latin America (Brazil, Guyana, Mexico offshore), Europe/Africa (Scandinavia, Nigeria), and Asia (China, Indonesia, India, Australia). Read-through: BKR’s OFSE international ex-Middle East business should show similar resilience; the 2Q OFSE revenue guidance of $3.2B may prove achievable if non-Middle East regions performed as expected.
• Middle East recovery is gradual and country-specific: SLB described the recovery as “graded” — Oman less affected, Bahrain/Iraq/Kuwait severely damaged, UAE and Saudi Aramco in between. SLB noted it “would be imprudent to assume a rapid restart of operations in weeks” and that Iraq remained constrained by security challenges. The company’s 2Q EPS impact from Middle East was “slightly below” the previously guided $0.06–$0.08 range, suggesting the disruption was slightly less severe than feared. Read-through: Mildly positive for BKR’s OFSE — if the Middle East impact was slightly less severe than guided, BKR’s OFSE EBITDA of $540M guidance may have a small upside buffer.
• Production Systems margins returned above 20%: SLB’s Production Systems segment (most analogous to BKR’s OFSE production-focused businesses) saw adjusted EBITDA margins return above 20%, driven by OneSubsea and ChampionX contributions. Pre-tax operating margin increased 138 bps to 15.5%. Read-through: Positive for BKR’s OFSE production-oriented businesses (production chemicals, artificial lift), which management has highlighted as more resilient OpEx-driven revenue streams.
• Pricing remains a headwind in 2026 but expected to improve in 2027: SLB noted pricing has been “generally a headwind globally” in 2026, particularly in large competitive tenders. However, as the market tightens and mobilizes for additional growth, pricing is expected to become “less of a headwind in 2027 and beyond.” Read-through: Neutral for BKR’s OFSE near-term; consistent with management’s own commentary on margin pressure from mix and Middle East.

IET Read-Through (Strong Positive)

• Data Center Solutions: +80% YoY, +33% sequential — strongest IET read-through: SLB’s Data Center Solutions segment grew 33% sequentially and 80% year-on-year in 2Q 2026, fueled by new hyperscale customers and expanded scope (beyond manufacturing into design, engineering, and system integration). SLB announced a partnership with Meta for a Canada data center campus and an alliance with Liberty Energy for modular infrastructure and behind-the-meter power generation. The backlog already supports an annualized revenue run rate exceeding $2B by end of 2027. Read-through: This is the strongest positive read-through for BKR’s IET Power Systems and data center order momentum. BKR’s CEO confirmed at the May 27 Bernstein conference that 1Q 2026 data center orders of $1B matched all of 2025, and the cumulative target is being revised upward. SLB’s 2Q acceleration suggests the hyperscale demand wave has not slowed.
• Digital margins at ~35% EBITDA — high-margin IET analog: SLB’s Digital segment delivered adjusted EBITDA margins of ~35% in 2Q, with pre-tax operating margin expanding 683 bps to 27.8%. Annual recurring revenue grew 15% YoY. Read-through: Indirect positive for BKR’s IET margin trajectory — confirms that technology-intensive, software-adjacent energy businesses can sustain high margins, supporting BKR’s IET 20%+ EBITDA margin target.
• Gas development in East Asia as a structural IET driver: SLB highlighted East Asia as “prolific for gas development following FIDs and contract awards.” This is a positive read-through for BKR’s IET Gas Technology Equipment (GTE) backlog conversion, as LNG and gas processing equipment orders from East Asia have been a key driver of IET order strength.
• Exploration and deepwater cycle described as durable and long-term: SLB characterized the exploration cycle as “durable and long-term, driven by energy security, resource replacement needs, and the development of deepwater resources.” OneSubsea booking ambition of $9B over two years. Read-through: Positive for BKR’s OFSE subsea and surface pressure systems (SSPS) segment and for IET gas infrastructure orders tied to offshore gas development.

8C. BKR Management — Bernstein Strategic Decisions Conference (May 27, 2026)

Note: This is BKR’s own management commentary from a post-1Q intra-quarter conference, included here as the most direct forward-looking update on 2Q conditions from the company itself.

• Data center order target being revised upward: CEO Simonelli confirmed that 1Q 2026 Power Systems data center revenue of $1B matched all of 2025, and the original $3B cumulative 2025–2027 target “is going to be revised up because the intake is significant.” This is the most direct forward-looking signal on IET order momentum for 2Q and beyond.
• Horizon 2 IET order target raised to >$40B: Management confirmed increasing confidence that the Horizon 2 IET order target (2026–2028) will exceed $40B, driven by energy security demand for pipelines, LNG plants, and infrastructure to bypass the Strait of Hormuz. This is a structural upward revision to the long-term IET order framework.
• Middle East conflict as a long-term infrastructure catalyst: Simonelli framed the Middle East conflict as ultimately “a positive tailwind” for BKR’s infrastructure build business, citing the need for “pipelines that are going to be necessary in the Middle East to bypass the Strait of Hormuz” and “new plants that are going to be required from a perspective of LNG.” Near-term OFSE disruption is acknowledged, but the long-term demand signal is constructive.
• New energy revenue on track for $2.4–$2.6B in 2026: Management confirmed the 2026 new energy revenue target of $2.4–$2.6B (vs. >$2B in 2025), reinforcing confidence in the 2030 target of $6–$7B. This is a positive read-through for IET order diversity beyond LNG.
• Chart acquisition “close months away” (as of May 27): Simonelli confirmed the strategic rationale for Chart (cryogenics, cold boxes, molecule management) and the plan to reduce net debt/EBITDA to 1.0–1.5x within a “logical time frame” through FCF and divestitures. Chart has since closed (July 16), making this commentary the pre-close baseline for integration expectations.

8D. Peer Read-Through Summary Table

Sources: HAL 2Q 2026 Earnings Call transcript (July 21, 2026); SLB 2Q 2026 Earnings Call transcript (July 24, 2026); BKR Bernstein Strategic Decisions Conference transcript (May 27, 2026). All commentary is from the last 60 days and addresses 2Q 2026 current-quarter conditions or forward conditions. Prior-quarter earnings commentary (e.g., HAL/SLB 1Q 2026 calls discussing 1Q results) has been excluded.

Appendix: Key Definitions & Data Sources

• Visible Alpha Consensus and Actuals Data: All KPI consensus estimates and historical actuals (Total Revenue, Adj. EBITDA, Adj. EPS, IET Orders, IET EBITDA Margin, OFSE EBITDA Margin, Free Cash Flow) sourced from Visible Alpha. Consensus as of July 24, 2026 unless otherwise noted. Post-print baseline consensus as of April 30, 2026.
• Stock Price Data: Daily closing prices for BKR, XLE, and SPY sourced from Yahoo Finance. Indexed to 100 at April 23, 2026 (BKR 1Q 2026 earnings date).
• Insider Transaction Data: SEC Form 4 filings sourced from SEC EDGAR. Window: April 24, 2026 – July 25, 2026. Open-market buys (code P) and sells (code S) only; 10b5-1 plan status from overall_10b5 field.
• Company Filings & Transcripts: BKR 1Q 2026 Earnings Release (April 23, 2026); BKR 1Q 2026 Earnings Call transcript (April 24, 2026); BKR 8-K filings (May 21, June 22, July 16, 2026); BKR Bernstein Strategic Decisions Conference transcript (May 27, 2026); HAL 2Q 2026 Earnings Call transcript (July 21, 2026); SLB 2Q 2026 Earnings Call transcript (July 24, 2026).
• Valuation Data: NTM EV/EBITDA multiples from stock performance decomposition tool as of July 24, 2026. Current NTM EV/EBITDA: 10.95x; 3-month ago: ~13.22x; 12-month ago: ~8.87x.
• Information Cutoff: July 25, 2026. The BKR 2Q 2026 earnings release (July 26, 2026) and earnings call (July 27, 2026) are not reflected in this document.