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Oil and gas servicing giant Halliburton reported better than expected second quarter earnings Monday before the market with a surprise profit in Q2. $HAL's aggressive approach to cutting costs flowed through. $HAL is ahead of Schlumberger's report

Halliburton Oilfield

The Baker Hughes oil rig count hit a cycle high benefiting oil service companies BUT has collapsed since falling over the last quarter with the decreased activity in North America since the Covid pandemic. Halliburton serves the upstream oil and gas industry throughout the lifecycle extraction to completion of the energy source.

In April HAL announced an additional $1 billion in annualized cost reductions. HAL now says that these actions, which are largely permanent in nature, are 75% done.

Halliburton Company NYSE: HAL Reported Before Open Monday

$0.05 Beat ($0.12) EPS Forecast But $3.20 Bil Missed $3.35 Billion Forecast in Revenue

Earnings

Halliburton reported second quarter earnings with a GAAP net loss of $1.68B, or $1.91/share, from net income of $75M, or $0.09/share, in the year-ago period, including $2.1B in impairment charges in response to lower oil prices and the resulting collapse in drilling by North American customers.

The company posted an adjusted profit of 5 cents per share, versus analysts’ expectations for a loss of 11 cents, according to Refinitiv IBES data. Revenues fell 46% Y/Y to $3.2 Billion less than the $3.35 Billion expected.

Read: Schlumberger International Oil and Gas Activity Offset North America Pricing

Read: U.S. Took Down Another 5 Oil Rigs From Service, 8 From The Permian

Halliburton Company NYSE: HAL

Market Reaction > Premarket 13.73 +0.64 (4.89%)

Highlights

  • Halliburton's Q2 completion and production revenue fell 56% to $1.67B
  • Drilling and evaluation revenue tumbled 28% to $1.52B
  • North America revenue sank 68% to $1.05B North America segment, where revenue fell 68% yr/yr and 57% sequentially to $1.05 bln.
  • The International segment fared better, but revenue in that geography still fell 18% yr/yr to $2.15 bln, with Latin America seeing the biggest drop sequentially.
  • Invetors were encouraged by the statement from HAL that drilling activity declines have slowed and that HAL expects that rig counts should find a bottom sometime in Q3.

Halliburton last month slashed its quarterly dividend by 75%, after previously cutting capex plans to half of last year's levels and targeting other cost reductions of about $1B to shore up cash, and the company has been laying off workers.

Outlook

With 75% of planned cost cuts complete, the rest of the company's reductions should be done by the end of September, largely focusing on international markets and real-estate holdings, CEO Jeff Miller said during today's earnings conference call.

 

Source: HAL,

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