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Halliburton Beats Earnings, Rev

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Major oilfield services provider, Halliburton Co. (HAL - Free Report) , reported better-than-anticipated second-quarter 2013 results – the fifth outperformance in the last 6 quarters – helped by robust growth in its international business. Earnings per share from continuing operations came in at 73 cents, beating the Zacks Consensus Estimate of 72 cents.

Following Schlumberger Ltd. (SLB - Free Report) , Halliburton stepped up as the second member of the ‘big 4 oil service companies’ to post above consensus result. However, Baker Hughes Inc. failed to match the earnings estimate. The remaining member of the contingent, Weatherford International Ltd. (WFT - Free Report) , is scheduled to report next week.

However, the company’s per share profits fell below than the second-quarter 2012 level of 79 cents, amid sluggish activity in its core North American operations.

Revenues of $7,317.0 million were 1.2% higher than that achieved during the second quarter of 2012 and also surpassed the Zacks Consensus Estimate of $ 7,252.0 million.

During the quarter, North America accounted for approximately 52.0% of Halliburton’s total revenue and 58.1% of its operating income.

Segmental Performance

Completion & Production: Revenues for Halliburton’s Completion and Production segment came in at $ 4,363.0 million, representing a year over year decrease of 2.2%. However, the figure was up by 6.4% sequentially. Increase in activity in the land market of the U.S. along with good result from the international market aided the sequential result.

Operating income for the unit came in at $732.0 million, down 19.9% from the year-earlier level, with North American profitability plunging 25.2%. The poor performance was owing to the weak results from most of the regions, especially North America.

However, the segment’s operating income managed to exhibit a 19.0% sequential increase. Decrease in guar costs along with the hike in demand for production enhancement services in the land market of U.S aided the result.

Drilling & Evaluation: Revenues from Halliburton’s Drilling and Evaluation business were 6.5% above the second-quarter 2012 level and also improved by 2.8% sequentially to $2,954.0 million. The results were aided by Eastern Hemisphere’s increased drilling activity.

Income in the Drilling and Evaluation unit increased 5.6% from the year-ago period and 2.0% sequentially owing to robust drilling activities in international regions.

Dividend and Share Repurchase Program

Today Halliburton declared that it has purchased roughly 23 million common shares during the quarter, for a total consideration of $1.0 billion.

Moreover, on Jul 18, 2013, the board of directors of Halliburton has given authorization to increase its share repurchase capacity to $5.0 billion from $0.7 billion in 2006.
Today, Halliburton also announced its third-quarter 2013 dividend payment of $12.5 cents. The dividend will be paid on Sep 25, 2013, to shareholders of record as of Sep 4, 2013.

Balance Sheet

Halliburton’s capital expenditure in the second quarter was $711.0 million. As of Jun 30, 2013, the company had approximately $1,412.0 million in cash/cash equivalents and $4,820.0 million in long-term debt, representing a debt-to-capitalization ratio of 23.8%.

Zacks Rank

As of now, Halliburton, carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

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