Company: BKR
Filing Date: 2025-04-23
Form Type: 10-Q
Source: 0001701605-25-000075
Chunk: 80

Company: Baker Hughes Co
Filing Date: 2025-04-23
Form: 10-Q
Item: Part I, Item 8
Chunk 80
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 Conditions

In the first quarter of 2025, we saw a weakening macroeconomic environment and slowing activity in the oil markets primarily due to the ongoing geopolitical tensions, uncertainty around trade policy and tariffs and slower global economic growth.

As we look to the rest of 2025, we remain positive on the global natural gas outlook while we expect the global oil outlook to soften.

We see several supply and demand factors driving downward pressure on oil prices, including the impact from announced plans for increased production by the Organization of the Petroleum Exporting Countries and its allies ("OPEC+") and uncertainty around trade policy and tariffs affecting global GDP and oil demand. Based on the current macroeconomic and geopolitical framework, we expect 2025 global upstream spending to be lower than 2024 with pockets of resilience in key international markets. We maintain our expectation for producers to shift spending towards the optimization of mature fields.

We remain optimistic on the global natural gas outlook, as we see a continued shift towards the development of natural gas and liquefied natural gas ("LNG"). We believe the positive long-term fundamentals for natural gas are less affected by near-term volatility and supported by solid growth in natural gas demand, positive fundamentals for LNG contracting and the continued desire to decarbonize the energy ecosystem.

We will continue to monitor market conditions and assess potential risks, including uncertainty around the macroeconomic environment, trade policy and tariffs, oil price volatility and changes in regulations and tax or other incentives for new energy solutions. Furthermore, in IET, we will continue to manage the tightness in the aeroderivative supply chain.

Financial Results and Key Company Initiatives

In the first quarter of 2025, the Company generated revenues of $6.4 billion, an increase of $9 million compared to the first quarter of 2024. IET revenue increased $0.3 billion, driven by Gas Technology Equipment ("GTE") and Climate Technology Solutions ("CTS") revenue. OFSE revenue decreased $0.3 billion with a decrease in international and North America revenue. Net income was $0.4 billion compared to $0.5 billion in the first quarter of 2024, decreasing $0.1 billion. The decrease to net income was as a result of losses in the fair value of certain equity securities compared to gains in the same period last year, partially offset by increased volume in IET and higher margins across both segments.

As part of our journey of transformation, we continued to undertake significant structural changes. We have progressed on our efforts to improve efficiencies and modernize