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Supporting note · AI x Energy

Baker Hughes Q1 Beats; SLB Q1 Confirms Red Sea Drag - Energy Services Diverge

Baker Hughes Q1 on April 23 beat revenue by $260M with $930M net income and orders +26% YoY; LNG order surge drove the upside. SLB Q1 on April 24 was muted: revenue $8.72B (+3% on ChampionX contribution; -7% organic ex-deal); Red Sea / Middle East disruption confirmed in OFSE segment.

May 25, 2026 · 3 min read

Summary

Baker Hughes Q1 2026 (April 23): Revenue $6.59B (beat Wall Street by ~$260M); net income $930M; adjusted EPS $0.58; adjusted EBITDA $1.16B (+12% YoY); total orders +26% YoY to $8.16B. OFSE segment -7% YoY to $3.2B on Middle East disruption / surface pressure control disposition. LNG order surge drove top-line beat.

SLB Q1 2026 (April 24): Revenue $8.72B (+3% YoY); GAAP EPS $0.50 (-14% YoY); net income $752M (-6%); adjusted EBITDA $1.77B (-12%). ChampionX acquisition contributed $838M revenue and $199M EBITDA. Excluding ChampionX, organic revenue -7% YoY - confirming Red Sea / Middle East drag flagged in Ep4 preview.

Why the Divergence

Both companies are exposed to Middle East disruption from the Hormuz conflict, but their business mixes pull different directions in Q1:

  • Baker Hughes has heavier LNG / industrial gas turbine exposure via the Chart Industries integration (first full quarter post-deal). LNG order surge - driven by US export sanctioning (Venture Global CP2 Phase 2, Plaquemines, etc.) and global LNG infrastructure tightening - gave BKR a tailwind that overwhelmed Middle East downstream weakness.
  • SLB is heavier on traditional oilfield services (drilling, completions, production). Red Sea disruption and reduced offshore activity weighed on OFSE. ChampionX (production chemicals, automation) helped reported numbers but couldn’t offset organic decline.

What the Earnings Tell Us About the Cycle

The Hormuz conflict is a mixed bag for energy services, not uniformly bullish. Where the conflict creates supply tightness (LNG, gas infrastructure), it’s a tailwind. Where it disrupts operations (offshore production, Red Sea logistics), it’s a headwind.

This was the key signal we expected to see in Ep4’s earnings preview and the prints confirmed: structural LNG demand is overwhelming Middle East operational disruption at Baker Hughes, while SLB’s larger oilfield exposure makes Middle East disruption net negative in the near term.

Conclusions

For H5b (energy services +20% by 2027), the read is mixed:

  • BKR’s +26% YoY orders + LNG strength = supportive of H5b
  • SLB’s -7% organic = neutralizes the BKR signal
  • The 20%+ thesis depends on whether the LNG-driven tailwinds and exploration-renaissance demand recover faster than the operational disruptions resolve

The most important read for the broader energy + AI story: the LNG segment continues to be the cleanest growth vector across the entire energy ecosystem. Every major OEM (GE Vernova, Siemens, Mitsubishi, Baker Hughes-Chart) is selling into the LNG buildout. Every midstream operator is positioning for power-and-gas integration. The LNG strength in BKR Q1 is one data point of many.

Our Thinking

The most under-appreciated metric in the Baker Hughes print is the Chart Industries integration’s first full quarter contribution. Chart’s small-scale LNG equipment, hydrogen liquefaction, and cryogenic gas storage capabilities position BKR uniquely for the LNG bunkering, hydrogen liquefaction, and gas-storage segments that will scale as Asia LNG demand recovers and as Europe builds long-term import infrastructure to compensate for Qatar’s lost capacity.

SLB’s quiet quarter does not invalidate H5b - it simply pushes the thesis recovery curve out a quarter or two. The exploration-renaissance and Middle East stabilization both remain medium-term tailwinds; the question is timing.

For Roman’s lens, the BKR-LNG-Chart integration is the energy-services capability worth tracking longest. It positions BKR as the integrated equipment supplier for the long-duration global LNG buildout that the Hormuz shock structurally accelerated.

Watch

  • BKR Q2 2026 print - does LNG order momentum sustain?
  • SLB Q2 2026 - Red Sea operational recovery?
  • Chart Industries integration synergy disclosures
  • ConocoPhillips, Occidental capex direction (exploration-renaissance proxy)
  • Any major hyperscaler-O&G integration M&A
  • LNG carrier orderbook updates (BKR / Daewoo / HMM correlation)
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Supporting note · AI x Energy

Baker Hughes Q1 Beats; SLB Q1 Confirms Red Sea Drag - Energy Services Diverge

Baker Hughes Q1 on April 23 beat revenue by $260M with $930M net income and orders +26% YoY; LNG order surge drove the upside. SLB Q1 on April 24 was muted: revenue $8.72B (+3% on ChampionX contribution; -7% organic ex-deal); Red Sea / Middle East disruption confirmed in OFSE segment.

May 25, 2026 · 3 min read

Summary

Baker Hughes Q1 2026 (April 23): Revenue $6.59B (beat Wall Street by ~$260M); net income $930M; adjusted EPS $0.58; adjusted EBITDA $1.16B (+12% YoY); total orders +26% YoY to $8.16B. OFSE segment -7% YoY to $3.2B on Middle East disruption / surface pressure control disposition. LNG order surge drove top-line beat.

SLB Q1 2026 (April 24): Revenue $8.72B (+3% YoY); GAAP EPS $0.50 (-14% YoY); net income $752M (-6%); adjusted EBITDA $1.77B (-12%). ChampionX acquisition contributed $838M revenue and $199M EBITDA. Excluding ChampionX, organic revenue -7% YoY - confirming Red Sea / Middle East drag flagged in Ep4 preview.

Why the Divergence

Both companies are exposed to Middle East disruption from the Hormuz conflict, but their business mixes pull different directions in Q1:

What the Earnings Tell Us About the Cycle

The Hormuz conflict is a mixed bag for energy services, not uniformly bullish. Where the conflict creates supply tightness (LNG, gas infrastructure), it’s a tailwind. Where it disrupts operations (offshore production, Red Sea logistics), it’s a headwind.

This was the key signal we expected to see in Ep4’s earnings preview and the prints confirmed: structural LNG demand is overwhelming Middle East operational disruption at Baker Hughes, while SLB’s larger oilfield exposure makes Middle East disruption net negative in the near term.

Conclusions

For H5b (energy services +20% by 2027), the read is mixed:

The most important read for the broader energy + AI story: the LNG segment continues to be the cleanest growth vector across the entire energy ecosystem. Every major OEM (GE Vernova, Siemens, Mitsubishi, Baker Hughes-Chart) is selling into the LNG buildout. Every midstream operator is positioning for power-and-gas integration. The LNG strength in BKR Q1 is one data point of many.

Our Thinking

The most under-appreciated metric in the Baker Hughes print is the Chart Industries integration’s first full quarter contribution. Chart’s small-scale LNG equipment, hydrogen liquefaction, and cryogenic gas storage capabilities position BKR uniquely for the LNG bunkering, hydrogen liquefaction, and gas-storage segments that will scale as Asia LNG demand recovers and as Europe builds long-term import infrastructure to compensate for Qatar’s lost capacity.

SLB’s quiet quarter does not invalidate H5b - it simply pushes the thesis recovery curve out a quarter or two. The exploration-renaissance and Middle East stabilization both remain medium-term tailwinds; the question is timing.

For Roman’s lens, the BKR-LNG-Chart integration is the energy-services capability worth tracking longest. It positions BKR as the integrated equipment supplier for the long-duration global LNG buildout that the Hormuz shock structurally accelerated.

Watch