Halliburton Sees Multi Year Upcycle Unfolding With Increased Demand for Services

Oil and gas servicing giant Halliburton reported mixed third quarter earnings Tuesday before the market. EPS were as expected but revenue lower. Improved North American and international markets for drilling, completion, and production with $HAL’s aggressive approach to cutting costs flowed through.

Halliburton Oilfield

The Baker Hughes oil rig count benefiting oil service companies have been recovering since falling off the cliff with the decreased activity in North America and the world since the Covid pandemic. Halliburton serves the upstream oil and gas industry throughout the lifecycle extraction to completion of the energy source.

Halliburton Company NYSE: HAL Reported Before Open Tuesday

$0.28 Matches $0.28 EPS Forecast But $3.86 Bil Missed $3.91 Billion Forecast in Revenue

Earnings

Halliburton Company (NYSE: HAL) booked a net profit for the third quarter that analysts had estimated, how ever revenue was a little shy of expectations.

Halliburton Q321 Earnings Highlights:

  • Non-GAAP EPS of $0.28 in-line;
  • GAAP EPS of $0.26 misses by $0.02.
  • Revenue of $3.86B (+29.5% Y/Y) misses by $50M.
  • Sys it sees a multi-year upcycle unfolding with increased demand for services
  • North America Rev $1.6B, +3% q/q
  • Latin America Rev $624M, +17% q/q 
  • Europe/Africa/CIS Rev $676M, flat
  • Middle East/Asia Rev $945M, +2% q/q

Repeats Last quarter “Halliburton sees the beginning of a “multi-year upcycle.” 

“I see a multi-year upcycle unfolding,” said Chief Executive Jeff Miller. “Structural global commodity tightness drives increased demand for our services, both internationally and in North America.”

“The positive activity momentum we see in North America and international markets today, combined with our expectations for future customer demand, gives us conviction for an unfolding multi-year upcycle,” said Jeff Miller, chairman, president and chief executive.

Halliburton Company NYSE: HAL

Market Reaction Pre-market $25.83 −0.18 (-0.69%)

“Our third quarter performance demonstrates the effectiveness of both our strategy and our execution. Total company revenue increased 4% sequentially, and adjusted operating income grew 6% with solid margins in both divisions,” commented Jeff Miller, Chairman, President and CEO

 “Both operating divisions experienced revenue growth in the international and North America Land markets. Our Completion and Production division delivered solid mid-teens margins, and our Drilling and Evaluation division margins maintained their steady momentum. “I am pleased with our strengthening free cash flow profile. In the third quarter, we generated $469 million of free cash flow, retired $500 million of debt, and maintained our cash balance at $2.6 billion.

Production highlights

  • Completion and production revenue rose 35.7% to $2.136 billionbut missed the FactSet consensus of $2.196 billion
  • Drilling and evaluation revenue increased 23.1% to $1.724 billion but was below expectations of $1.719 billion.

Free cash flow of $469 million beat expectations of $298.6 million.

Halliburton Global Locations

About Halliburton

Founded in 1919, Halliburton is one of the world’s largest providers of products and services to the energy industry. With more than 40,000 employees, representing 130 nationalities in more than 70 countries, the company helps its customers maximize value throughout the lifecycle of the reservoir – from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production throughout the life of the asset. Visit the company’s website at www.halliburton.com.

Source: HAL

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