Baker Hughes, a GE company (NYSE: BHGE) reported Q3 EPS of $0.19, $0.01 worse than the analyst estimate of $0.20. Revenue for the quarter came in at $5.67 billion versus the consensus estimate of $5.86 billion.

• Orders of $5.7 billion for the quarter, down 5% sequentially and flat year-over-year
• Revenue of $5.7 billion for the quarter, up 2% sequentially and up 7% year-over-year
• GAAP operating income of $282 million for the quarter, increased $204 million sequentially and increased $475 million year-over-year
• Adjusted operating income (a non-GAAP measure) of $377 million for the quarter, up 30% sequentially and up $207 million year-over-year*
• GAAP diluted earnings per share of $0.03 for the quarter which included $0.16 per share of adjusting items. Adjusted diluted earnings per share (a non-GAAP measure) were $0.19*
• Cash flows generated from operating activities were $239 million for the quarter. Free cash flow (a non-GAAP measure) for the quarter was $146 million. Included in free cash flow is a cash usage of $151 million relating to restructuring, legal settlements and merger-related payments*

“We are now in the second year of our journey as BHGE. The Company’s operations are improving, and we are driving change in the industry with our differentiated portfolio. We are focused on commercial innovation, outcome-based models and leveraging our leading technology offerings to drive significant efficiency and productivity enhancements for BHGE and our customers. We remain focused on our priorities of gaining market share, increasing margin rates and delivering strong free cash flow," said Lorenzo Simonelli, BHGE Chairman, President and Chief Executive Officer.

“In the third quarter, we delivered $5.7 billion in orders and $5.7 billion in revenues. Adjusted operating income in the quarter was $377 million. Year-to-date we have generated $350 million of free cash flow. We delivered $224 million of synergies in the quarter and are on track to achieve the $700 million target for the year.

“In Oilfield Services (OFS), the market environment continues to improve, and our well construction product lines are seeing robust activity increases. We remain focused on gaining share in critical markets, and increasing the margin rate, which was up more than 400 basis points year-over-year. This quarter, we secured some critical wins in the Middle East and achieved a number of significant execution milestones with our customers across the Marcellus and Permian basins in North America. We saw strong growth in our Drilling Services and international Pressure Pumping product lines and we outperformed the market in the Middle East and Asia Pacific.

“In our Oilfield Equipment (OFE) segment, the outlook is steadily improving. This quarter we secured several wins across our portfolio, including our first new-build blowout preventer (BOP) order since 2014. We are leveraging our flexible partnership models and enhancing our technology offering to drive better, more sustainable subsea economics for customers, and we are well positioned as the market continues to improve.

“In our Turbomachinery & Process Solutions (TPS) segment, we continue to see strength in the LNG market and BHGE is well positioned to benefit as customers move forward with new projects. In the quarter, we secured important awards in the upstream production and pipeline segments and are seeing improvements in our transactional services business. We remain focused on maintaining our LNG leadership and delivering on our cost-out initiatives.

“In our Digital Solutions (DS) segment, another quarter of strong execution led to solid revenue growth and over 350 basis points of margin expansion year-over-year. The oil and gas end markets continue to gain momentum, specifically in pipeline inspection. We are also gaining further traction with customers in our digital offerings and driving growth in our core hardware business across multiple industries, including aviation, automotive and consumer electronics.

“We are encouraged by the improved outlook for the macro environment. We expect both the North American and International markets to grow in 2019 as customers increase spending and overall rig and well counts grow. The offshore market is the strongest it has been in many years and the improving tender and order activity is an encouraging sign as we look out to 2019 and beyond. The LNG outlook is also improving, and we conservatively estimate a total of 65 million tons per annum of new capacity to be sanctioned by 2020. We remain well-positioned for the next build-cycle.

“We continue to leverage our differentiated technology, unique portfolio and our focus on customers to build market-leading product companies and deliver productivity solutions to the oil and gas industry. As we enter the second year of our journey as BHGE, we remain focused on what matters most - delivering for our customers and for our shareholders,” concluded Simonelli.

For earnings history and earnings-related data on Baker Hughes, a GE company (BHGE) click here.