Texas-Based Baker Hughes Warns Of $100-$200 Million EBITDA Risk From Tariffs In 2025
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 23 2025
0mins
Source: Benzinga
Financial Performance: Baker Hughes reported first-quarter FY25 revenue of $6.43 billion, missing expectations, while adjusted EPS rose 19% to $0.51. The company anticipates Q2 revenue between $6.3 billion and $7.0 billion amid trade policy uncertainties impacting future earnings.
Stock Movement and Outlook: Following the earnings report, Baker Hughes' stock fell by 4.37% to $36.69. The company declared a quarterly dividend and executed share buybacks, but faces potential tariff impacts of $100 million to $200 million on EBITDA for FY25.
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Analyst Views on BKR
Wall Street analysts forecast BKR stock price to fall
13 Analyst Rating
12 Buy
1 Hold
0 Sell
Strong Buy
Current: 66.730
Low
52.00
Averages
61.54
High
67.00
Current: 66.730
Low
52.00
Averages
61.54
High
67.00
About BKR
Baker Hughes Company is an energy technology company that provides solutions to energy and industrial customers worldwide. The Company's segments include Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET). OFSE segment provides products and services for onshore and offshore oilfield operations across the lifecycle of a well, ranging from exploration, appraisal, and development, to production, rejuvenation, and decommissioning. OFSE segment is organized into four product lines: Well Construction; Completions, Intervention, and Measurements; Production Solutions, and Subsea. IET segment provides technology solutions and services for mechanical-drive, compression and power-generation applications across the energy industry including oil and gas, liquefied natural gas operations, downstream refining, and petrochemical markets, as well as lower carbon solutions to broader energy and industrial sectors. IET segment also provides equipment, software, and services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Intervention Service Expansion: The intervention contract will see Baker Hughes expand the scope of service delivery centered around the PRIME Technology Platform, aiming to increase flexibility and responsiveness in technology applications.
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See More
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- Technology Utilization: Under the integrated drilling and well services contract, Baker Hughes intends to leverage its capabilities across Well Construction, Completions, Intervention, and Measurement to support energy development in Norway, enhancing service efficiency.
- Intervention Service Expansion: The intervention contract will see Baker Hughes expand the scope of service delivery centered around the PRIME Technology Platform, aiming to increase flexibility and responsiveness in technology applications.
- Energy Security Goals: Through these contracts, Baker Hughes aims to create a more secure energy future for Norway and all of Europe, reflecting its strategic commitment to sustainable energy solutions.
See More
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- Contract Extensions: Baker Hughes has signed two significant multi-year contracts with Equinor to provide integrated drilling and well services solutions, supporting offshore hydrocarbon production goals in the North Sea, demonstrating the company's ongoing influence in marine energy development.
- Technology Implementation: Under the integrated drilling and well services contract, Baker Hughes will leverage advanced technologies such as the Kantori™ autonomous well construction solution and TRU-ARMS™ advanced reservoir mapping services to enhance resource development efficiency on the Norwegian continental shelf, thereby driving business growth.
- Intervention Services Expansion: The intervention contract will see Baker Hughes provide fully integrated intervention services that combine surface and downhole solutions aimed at extending the life and performance of existing wells in the North Sea, further optimizing production and reducing emissions.
- Industry Leadership: Baker Hughes solidifies its key role in Norway's energy sector, with the opening of its new Subsea Services Center of Excellence and manufacturing plant in Dusavik, the company continues to drive energy security for Norway and all of Europe.
See More
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- Oil Price Fluctuations: Crude oil prices plummeted over 5% to a five-week low due to optimism surrounding a US-Iran peace deal, which eased inflation expectations and pushed the 10-year Treasury yield down to a 1.5-week low of 4.45%, providing support for the bond market.
- Mortgage Application Decline: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index down 18.1%, reflecting the dampening effect of high interest rates on housing demand, as the average 30-year fixed mortgage rate rose to 6.65%.
- Corporate Earnings Outlook: As of Wednesday, 83% of the 475 S&P 500 companies that reported Q1 earnings exceeded expectations, with projected earnings growth of 12% year-over-year, but excluding the technology sector, the growth is only 3%, indicating signs of overall earnings weakness.
See More
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- Stock Decline: Baker Hughes (BKR) shares fell 5.5% in the morning session, primarily driven by a plunge in West Texas Intermediate (WTI) crude oil prices due to progress in the Iran-US peace deal, indicating market sensitivity to oil price fluctuations.
- Capex Cuts: The sharp drop in oil prices leads producers to quickly slash their capital expenditure budgets, which directly impacts revenue for oilfield service companies like Baker Hughes, with significant revenue declines expected in the next two quarters.
- Market Reaction: Despite Baker Hughes's low volatility, with only six moves greater than 5% in the past year, today's drop suggests that the market considers the news significant, potentially affecting investors' long-term perceptions of the company.
- Investment Returns: Although Baker Hughes has risen 34.3% since the beginning of the year, its current price is still 9.2% below its 52-week high, presenting potential buying opportunities for investors, especially considering a 160% return for those who invested five years ago.
See More
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- Impact of Falling Oil Prices: Crude oil prices dropped over 3% amid optimism for a normalization of oil flows from the Middle East, which not only eased inflation expectations but also pushed the 10-year Treasury yield down to a 1.5-week low of 4.45%, positively affecting the bond market.
- Decline in Mortgage Applications: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index plunging 18.1%, indicating the suppressive effect of high interest rates on the housing market.
- Corporate Earnings Overview: As of now, 83% of the 475 S&P 500 companies that reported Q1 earnings have exceeded expectations, with overall earnings projected to rise by 12% year-on-year, but excluding the tech sector, the growth is only 3%, highlighting disparities across industries.
See More
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- Crude Oil Price Decline: Crude oil prices dropped over 4% to a five-week low amid optimism surrounding a US-Iran peace deal, which has lowered inflation expectations and pushed bond yields lower, with the 10-year T-note yield falling to a 1.5-week low of 4.45%.
- Mortgage Application Decrease: For the week ending May 22, US MBA mortgage applications fell by 8.5%, with the purchase mortgage sub-index down 0.4% and the refinancing mortgage sub-index down 18.1%, indicating the suppressive effect of high rates on the housing market.
- Earnings Performance: As of now, 83% of the 475 S&P 500 companies that reported Q1 earnings have exceeded expectations, with Q1 earnings projected to rise by 12% year-over-year, but excluding the technology sector, earnings growth is only about 3%, marking the lowest in two years, reflecting disparities across industries.
See More
