Resilient Halliburton Tops Q1 Profit Forecasts with International Demand

Houston, Texas based oilfield services giant Halliburton reported better than expected first-quarter earnings before the market open Tuesday. It was the best profit in 12 Years despite shrinking shale. Higher drilling demand from international markets helped counter a slowdown in North America. HAL announced adjusted profit of 76 cents per share topping analysts’ average estimate of 74 cents per share, according to LSEG data.

Revenue from Halliburton’s international segment rose 12%, to $3.3 billion while North America revenue declined 8%, to $2.5 billion, from a year ago. Halliburton stock was trading at 38.34 -0.38 (-0.98%) after the release which is +6.15% year to date.

Halliburton Oilfield

Highlights HAL Q1 2024 Earnings:

  • Net Income: $606 MM, down ~7% YoY, down 8% QoQ
  • Adj EPS: $0.76 (est $0.74)
  • Revenue: $5.8B (est $5.66B)
  • Operating margin: 17%
  • Cash flow from operations: $487M
  • Free cash flow: $206M
  • Common stock repurchases: ~$250M
  • Confident in Strength, Duration of Upcycle

“Halliburton delivered solid first quarter results that again demonstrated the power of our strategy and the strength of our execution. Activity in North America recovered from fourth quarter lows, and our international business delivered its 11th consecutive quarter of year-on-year growth,” said Jeff Miller, CEO of Halliburton.

Halliburton Co HAL Stock Market Reaction

  • 38.34 -0.38 (-0.98%)
  • 38.34 +3.87 (+11.23%) past year
  • 38.34 +7.19 (+23.08%) past 5 years

Halliburton, with its unrivaled footprint in all of the major shale basins, offers the closest proxy to US producer activity. After better-than-expected output in 2023, the US shale patch is now in the midst of slowing down amid dwindling inventory for top-tier drilling locations, weak natural gas prices and industry consolidation. Total North American producer spending is forecast to drop 1% this year, according to Barclays PLC.

Outlook

Chief Executive Officer Jeff Miller told analysts and investors Tuesday on a conference call.

  • “While we expect an eventual recovery in natural gas activity driven by demand from LNG expansions, our 2024 plan does not anticipate this recovery,”
  • “Our customers’ multi-year activity plans across markets and asset types confirms my confidence in the strength and duration of this upcycle,”
  • “Our international business delivered its 11th consecutive quarter of year-on-year growth.”
  • Drilling and fracking for the heating and power plant fuel will be “the next big leg of growth in North America” in 2025 and beyond.

Rival SLB dominates international services work and reported similar results last week with a 13% jump in total revenues while its North American sales dropped 6% from the same period a year earlier. Baker Hughes Inc. will round out the Big 3 oilfield-service earnings when it posts results later today.

Source: HAL, Alphastreet

Live From The Pit