Baker Hughes (BKR.O) delivered a mixed earnings report Tuesday, beating Q1 profit estimates on surging natural gas technology demand while cautioning that U.S. tariffs could carve 100M–100M–200M from its 2024 core earnings. The warning underscores how Trump’s trade policies are squeezing energy firms even as they capitalize on the AI-driven power boom.
Key Numbers
- Q1 Adjusted EPS: 51 cents (vs. 48 cent estimate)
- Industrial & Energy Tech (IET) Revenue: $2.93B (↑17% YoY)
- After-Hours Stock Reaction: ↓2.1% on tariff fears
Tariff Toll
- The 100M–100M–200M profit hit reflects current tariff rates during the 90-day pause—not potential retaliatory measures.
- Analysts note Baker Hughes is the most insulated among oilfield service giants due to its $20B+ gas tech backlog.
Growth Engine: LNG & AI Power Demand
- Data center boom: Big Tech’s AI expansion is driving record LNG orders for power generation.
- IET segment shines: Gas technology orders jumped 17%, fueled by compressor and turbine sales.
Contrasting Fortunes
- Short-term win: LNG demand offset weak North American drilling activity (rig count ↓7 last week).
- Long-term risk: If Trump imposes broader tariffs, the $200M hit could expand.
What’s Next?
- Trade war watch: Retaliatory tariffs from China/EU would compound pain.
- Backlog buffer: IET’s multi-year contracts provide stability amid oil price swings.
- Election wildcard: Biden or Trump policies post-November will reshape energy trade flows.
Baker Hughes Warns Tariffs Could Slash $200M From 2024 Profit Despite LNG-Driven Earnings Beat