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Halliburton (HAL) Headed for Strong Q4 Earnings: Know Why
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Halliburton Company (HAL - Free Report) is set to release fourth-quarter results on Jan 24. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 67 cents per share on revenues of $5.6 billion.
Let’s delve into the factors that might have influenced the oilfield service firm’s performance in the December quarter. But it’s worth taking a look at HAL’s previous-quarter performance first.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, this Houston, TX-based provider of technical products and services to drillers of oil and gas wells beat the consensus mark on stronger-than-expected profit from both its divisions. Halliburton had reported adjusted net income per share of 60 cents, higher than the Zacks Consensus Estimate of 56 cents. Revenues of $5.4 billion also came ahead of the Zacks Consensus Estimate of $5.3 billion.
HAL beat the Zacks Consensus Estimate in three of the last four quarters, which resulted in an earnings surprise of 5.5%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the third-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates an 86.1% improvement year over year. The Zacks Consensus Estimate for revenues suggests a 30.5% increase from the year-ago period.
Factors to Consider
Despite pulling back from their multi-year highs, oil and natural gas prices have remained robust due to stable demand and geopolitical tensions. Consequently, drilling activity — an important factor for services companies — has been picking up. In the United States, a region on which Halliburton is highly dependent, rig count at the end of the fourth quarter was 779 compared with 765 three months ago and 586 a year back.
This is in sync with the strength in commodity prices. The number of active units in Canada and international markets has gained sharply too. The steady growth in rig count is an encouraging indicator of contracting activity.
Considering the improved operating environment, the Zacks Consensus Estimate for the fourth-quarter operating income of Completion & Production, and Drilling & Evaluation is pegged at $629 million and $364 million, respectively, indicating an increase of 81.3% and 35.3% year over year.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for Halliburton this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Halliburton has an Earnings ESP of +0.30% and a Zacks Rank #2.
Other Stocks to Consider
Halliburton is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:
Helmerich & Payne (HP - Free Report) has an Earnings ESP of +8.68% and a Zacks Rank #1. The firm is scheduled to release earnings on Jan 30.
For fiscal 2023, Helmerich & Payne has a projected earnings growth rate of 4,380%. Valued at around $5.3 billion, HP has gained 69.9% in a year.
Valero Energy Corporation (VLO - Free Report) has an Earnings ESP of +0.93% and a Zacks Rank #3. The firm is scheduled to release earnings on Jan 26.
The Zacks Consensus Estimate for VLO’s 2022 earnings has been revised 5.1% upward over the past 90 days. Valued at around $52.5 billion, Valero Energy has lost 60.7% in a year.
Chevron Corporation (CVX - Free Report) has an Earnings ESP of +5.18% and a Zacks Rank #3. The firm is scheduled to release earnings on Jan 27.
CVX topped the Zacks Consensus Estimate by an average of 1.7% in the trailing four quarters, including a 10.8% beat in Q3. Chevron has gained 39.5% in a year.
Image: Bigstock
Halliburton (HAL) Headed for Strong Q4 Earnings: Know Why
Halliburton Company (HAL - Free Report) is set to release fourth-quarter results on Jan 24. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 67 cents per share on revenues of $5.6 billion.
Let’s delve into the factors that might have influenced the oilfield service firm’s performance in the December quarter. But it’s worth taking a look at HAL’s previous-quarter performance first.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, this Houston, TX-based provider of technical products and services to drillers of oil and gas wells beat the consensus mark on stronger-than-expected profit from both its divisions. Halliburton had reported adjusted net income per share of 60 cents, higher than the Zacks Consensus Estimate of 56 cents. Revenues of $5.4 billion also came ahead of the Zacks Consensus Estimate of $5.3 billion.
HAL beat the Zacks Consensus Estimate in three of the last four quarters, which resulted in an earnings surprise of 5.5%, on average. This is depicted in the graph below:
Halliburton Company Price and EPS Surprise
Halliburton Company price-eps-surprise | Halliburton Company Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the third-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates an 86.1% improvement year over year. The Zacks Consensus Estimate for revenues suggests a 30.5% increase from the year-ago period.
Factors to Consider
Despite pulling back from their multi-year highs, oil and natural gas prices have remained robust due to stable demand and geopolitical tensions. Consequently, drilling activity — an important factor for services companies — has been picking up. In the United States, a region on which Halliburton is highly dependent, rig count at the end of the fourth quarter was 779 compared with 765 three months ago and 586 a year back.
This is in sync with the strength in commodity prices. The number of active units in Canada and international markets has gained sharply too. The steady growth in rig count is an encouraging indicator of contracting activity.
Considering the improved operating environment, the Zacks Consensus Estimate for the fourth-quarter operating income of Completion & Production, and Drilling & Evaluation is pegged at $629 million and $364 million, respectively, indicating an increase of 81.3% and 35.3% year over year.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for Halliburton this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Halliburton has an Earnings ESP of +0.30% and a Zacks Rank #2.
Other Stocks to Consider
Halliburton is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:
Helmerich & Payne (HP - Free Report) has an Earnings ESP of +8.68% and a Zacks Rank #1. The firm is scheduled to release earnings on Jan 30.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For fiscal 2023, Helmerich & Payne has a projected earnings growth rate of 4,380%. Valued at around $5.3 billion, HP has gained 69.9% in a year.
Valero Energy Corporation (VLO - Free Report) has an Earnings ESP of +0.93% and a Zacks Rank #3. The firm is scheduled to release earnings on Jan 26.
The Zacks Consensus Estimate for VLO’s 2022 earnings has been revised 5.1% upward over the past 90 days. Valued at around $52.5 billion, Valero Energy has lost 60.7% in a year.
Chevron Corporation (CVX - Free Report) has an Earnings ESP of +5.18% and a Zacks Rank #3. The firm is scheduled to release earnings on Jan 27.
CVX topped the Zacks Consensus Estimate by an average of 1.7% in the trailing four quarters, including a 10.8% beat in Q3. Chevron has gained 39.5% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.