BKR

Baker Hughes is no longer the loss-making services laggard of FY2021–22 (net losses of -$219M and -$601M); it has inflected to durable profitability, posting $2.59B net income on $27.7B revenue in FY2025 with a 13.7% ROE and $3.81B of operating cash flow (+14.3% YoY). The headline negatives — flat revenue (-0.3%) and net income down 13.1% — are softer than they look: MD&A attributes the earnings decline largely to a swing in mark-to-market on equity securities, transaction-related costs and mix rather than core operating erosion, and the company still returned $1.3B to shareholders. The balance sheet is sound: $18.8B equity, $3.71B cash, a 1.35x current ratio, and equity growing 11.5%.

The real story is the two-segment divergence. OFSE (oilfield services) revenue fell 8% across all regions, and management is explicit that it expects 'continued soft market conditions through most of 2026' amid OPEC+ supply and oil-price uncertainty. But IET (industrial & energy technology) grew 10%, driven by Gas Technology Equipment and Services, and management frames a structural tailwind I find credible: ~7% LNG demand growth in 2025 plus 'AI and data center expansion adding a new structural layer of power demand,' increasingly met by natural gas. This shifts BKR's mix toward the higher-growth, less oil-price-sensitive part of the portfolio.