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Is A Beat In Store for Halliburton (HAL) This Time Around?
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Halliburton Company (HAL - Free Report) is set to release first-quarter 2021 results before the opening bell on Wednesday, Apr 21. The current Zacks Consensus Estimate for the to-be-reported quarter is 17 cents per share on revenues of $3.37 billion.
Let’s delve into the factors that might have influenced the oilfield service company’s performance in the March quarter. But it’s worth taking a look at Halliburton’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last-reported quarter, the Houston, TX-based provider of technical products and services to drillers of oil and gas wells beat the consensus mark due to stronger-than-expected profits from both its divisions. Halliburton had reported adjusted net income per share of 18 cents that went past the Zacks Consensus Estimate of 15 cents. Moreover, the company’s quarterly revenues of $3.2 billion narrowly outperformed the Zacks Consensus Estimate by 0.8%.
As far as earnings surprises are concerned, Halliburton beat the Zacks Consensus Estimate in each of the last four quarters, delivering an earnings surprise of 56.74%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the first-quarter bottom line remained the same in the last seven days. However, the estimated figure indicates a 45.2% deterioration year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 33.1% decrease from the year-ago period.
Factors to Consider This Quarter
Oil prices have returned to their pre-pandemic levels, and drilling activity— an important factor for services companies— has been modestly picking up as a result. In the United States, a region on which Halliburton is highly dependent, rig count at the end of the first quarter tallied 417 compared with 351 three months ago, in sync with the strength in commodity prices. Consequently, the Zacks Consensus Estimate for the first-quarter revenues for Completion & Production and Drilling & Evaluation are pegged at $1.9 billion and $1.5 billion, respectively, indicating an increase of 4.4% and 1.8% sequentially.
On top of this, it will also benefit from the cost-cutting efforts. Halliburton’s cash outflows as capital expenditure continue to fall as the company reigns in its spending levels. For 2020, the company halved its capital expenditures by almost 50% to $730 million and plans to keep it essentially flat this year. This is expected to have provided a further boost to the company’s first-quarter earnings and cash flows.
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 +2.57% and a Zacks Rank #1.
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:
Helix Energy Solutions Group, Inc. (HLX - Free Report) has an Earnings ESP of +25% and a Zacks Rank #2. The firm is scheduled to release earnings on Apr 26.
BP plc (BP - Free Report) has an Earnings ESP of +5.26% and is Zacks #2 Ranked. The firm is scheduled to release earnings on Apr 27.
Baker Hughes (BKR - Free Report) has an Earnings ESP of +3.97% and is Zacks #3 Ranked. The firm is scheduled to release earnings on Apr 21.
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Image: Bigstock
Is A Beat In Store for Halliburton (HAL) This Time Around?
Halliburton Company (HAL - Free Report) is set to release first-quarter 2021 results before the opening bell on Wednesday, Apr 21. The current Zacks Consensus Estimate for the to-be-reported quarter is 17 cents per share on revenues of $3.37 billion.
Let’s delve into the factors that might have influenced the oilfield service company’s performance in the March quarter. But it’s worth taking a look at Halliburton’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last-reported quarter, the Houston, TX-based provider of technical products and services to drillers of oil and gas wells beat the consensus mark due to stronger-than-expected profits from both its divisions. Halliburton had reported adjusted net income per share of 18 cents that went past the Zacks Consensus Estimate of 15 cents. Moreover, the company’s quarterly revenues of $3.2 billion narrowly outperformed the Zacks Consensus Estimate by 0.8%.
As far as earnings surprises are concerned, Halliburton beat the Zacks Consensus Estimate in each of the last four quarters, delivering an earnings surprise of 56.74%, 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 first-quarter bottom line remained the same in the last seven days. However, the estimated figure indicates a 45.2% deterioration year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 33.1% decrease from the year-ago period.
Factors to Consider This Quarter
Oil prices have returned to their pre-pandemic levels, and drilling activity— an important factor for services companies— has been modestly picking up as a result. In the United States, a region on which Halliburton is highly dependent, rig count at the end of the first quarter tallied 417 compared with 351 three months ago, in sync with the strength in commodity prices. Consequently, the Zacks Consensus Estimate for the first-quarter revenues for Completion & Production and Drilling & Evaluation are pegged at $1.9 billion and $1.5 billion, respectively, indicating an increase of 4.4% and 1.8% sequentially.
On top of this, it will also benefit from the cost-cutting efforts. Halliburton’s cash outflows as capital expenditure continue to fall as the company reigns in its spending levels. For 2020, the company halved its capital expenditures by almost 50% to $730 million and plans to keep it essentially flat this year. This is expected to have provided a further boost to the company’s first-quarter earnings and cash flows.
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 +2.57% and a Zacks Rank #1.
You can see the complete list of today’s Zacks #1 Rank stocks here.
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:
Helix Energy Solutions Group, Inc. (HLX - Free Report) has an Earnings ESP of +25% and a Zacks Rank #2. The firm is scheduled to release earnings on Apr 26.
BP plc (BP - Free Report) has an Earnings ESP of +5.26% and is Zacks #2 Ranked. The firm is scheduled to release earnings on Apr 27.
Baker Hughes (BKR - Free Report) has an Earnings ESP of +3.97% and is Zacks #3 Ranked. The firm is scheduled to release earnings on Apr 21.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>