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Halliburton Company (HAL - Free Report) is seeing strong demand in the energy industry heading into 2023. This Zacks Rank #1 (Strong Buy) is expected to see big earnings growth this year and next.
Halliburton is one of the largest global providers of products and services to the energy industry.
Another Beat in the Third Quarter
On Oct 25, Halliburton reported its third quarter results and beat on the Zacks Consensus by $0.04. Earnings were $0.60 versus the Zacks Consensus of $0.56.
Halliburton has an outstanding earnings surprise track record. It hasn't missed on earnings since 2018, including during the tough COVID pandemic years.
Revenue was up 39% year-over-year to $5.4 billion. Revenue was also up 6% from the second quarter.
It saw free cash flow of $543 million in the quarter.
Both North America and International Were Strong
By geographies, North American revenue rose 9% quarter-over-quarter to $2.6 billion. It was driven by increased pressure pumping services and drilling-related services in North America land. These increases were partially offset by decreased activity across multiple product service lines in the Gulf of Mexico.
International revenue rose 3% quarter-over-quarter to $2.7 billion. Latin America revenue was up 11% sequentially due to increased well construction services and project management activity in Mexico and higher fluids and project management activity in Suriname.
Europe/Africa revenue declined 11% sequentially to $639 million due to an exit from the Russian business along with decreased activity in the North Sea.
Middle East/Asia revenue rose 6% sequentially to $1.2 billion due to increased activity in Saudi Arabia and increased drilling services in Malaysia and Indonesia.
“In all markets, Halliburton’s strong financial results demonstrate the execution of our strategic priorities. I believe structural demand for more oil and gas supply will provide strong tailwinds for our business, and Halliburton is well-positioned to deliver improved profitability and increased returns for shareholders," said Jeff Miller, CEO.
Analysts Raise 2022 and 2023 Earnings Estimates
Analysts were impressed with the third quarter results and the outlook.
7 estimates have been revised higher in the last week for 2022. It has pushed the Zacks Consensus Estimate up to 42.07 from $2.03 in that time period.
That's earnings growth of 92% as Halliburton made just $1.08 in 2021.
2023 is also looking bullish as 6 estimates have been revised higher in the last 7 days. The 2023 Zacks Consensus Estimate has jumped to $2.88 from $2.81. That is further earnings growth of 39.4%.
Here is what the earnings turnaround looks like on the 5-year chart.
Image Source: Zacks Investment Research
Shares are Volatile in 2022
Shares of Halliburton were in a big rally through June 2022 and then sold off hard. It's been a wild ride.
However, they're now up about 45% over the last year compared to the S&P 500's decline of 18%.
Image Source: Zacks Investment Research
It's not dirt cheap, but Halliburton still has an attractive P/E at 17.6.
Halliburton pays a dividend, currently yielding 1.3%.
For investors looking for an oil services stock to add to their portfolio, Halliburton is one to keep on the short list.
[In full disclosure, Tracey owns shares of Halliburton in the Zacks Value Investor portfolio.]
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Bull of the Day: Halliburton (HAL)
Halliburton Company (HAL - Free Report) is seeing strong demand in the energy industry heading into 2023. This Zacks Rank #1 (Strong Buy) is expected to see big earnings growth this year and next.
Halliburton is one of the largest global providers of products and services to the energy industry.
Another Beat in the Third Quarter
On Oct 25, Halliburton reported its third quarter results and beat on the Zacks Consensus by $0.04. Earnings were $0.60 versus the Zacks Consensus of $0.56.
Halliburton has an outstanding earnings surprise track record. It hasn't missed on earnings since 2018, including during the tough COVID pandemic years.
Revenue was up 39% year-over-year to $5.4 billion. Revenue was also up 6% from the second quarter.
It saw free cash flow of $543 million in the quarter.
Both North America and International Were Strong
By geographies, North American revenue rose 9% quarter-over-quarter to $2.6 billion. It was driven by increased pressure pumping services and drilling-related services in North America land. These increases were partially offset by decreased activity across multiple product service lines in the Gulf of Mexico.
International revenue rose 3% quarter-over-quarter to $2.7 billion. Latin America revenue was up 11% sequentially due to increased well construction services and project management activity in Mexico and higher fluids and project management activity in Suriname.
Europe/Africa revenue declined 11% sequentially to $639 million due to an exit from the Russian business along with decreased activity in the North Sea.
Middle East/Asia revenue rose 6% sequentially to $1.2 billion due to increased activity in Saudi Arabia and increased drilling services in Malaysia and Indonesia.
“In all markets, Halliburton’s strong financial results demonstrate the execution of our strategic priorities. I believe structural demand for more oil and gas supply will provide strong tailwinds for our business, and Halliburton is well-positioned to deliver improved profitability and increased returns for shareholders," said Jeff Miller, CEO.
Analysts Raise 2022 and 2023 Earnings Estimates
Analysts were impressed with the third quarter results and the outlook.
7 estimates have been revised higher in the last week for 2022. It has pushed the Zacks Consensus Estimate up to 42.07 from $2.03 in that time period.
That's earnings growth of 92% as Halliburton made just $1.08 in 2021.
2023 is also looking bullish as 6 estimates have been revised higher in the last 7 days. The 2023 Zacks Consensus Estimate has jumped to $2.88 from $2.81. That is further earnings growth of 39.4%.
Here is what the earnings turnaround looks like on the 5-year chart.
Image Source: Zacks Investment Research
Shares are Volatile in 2022
Shares of Halliburton were in a big rally through June 2022 and then sold off hard. It's been a wild ride.
However, they're now up about 45% over the last year compared to the S&P 500's decline of 18%.
Image Source: Zacks Investment Research
It's not dirt cheap, but Halliburton still has an attractive P/E at 17.6.
Halliburton pays a dividend, currently yielding 1.3%.
For investors looking for an oil services stock to add to their portfolio, Halliburton is one to keep on the short list.
[In full disclosure, Tracey owns shares of Halliburton in the Zacks Value Investor portfolio.]