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Halliburton Company (HAL - Free Report) reported fourth-quarter 2021 adjusted net income per share of 36 cents, beating the Zacks Consensus Estimate of 34 cents. The company had reported a profit of 18 cents in the year-ago quarter. The outperformance reflects stronger-than-expected profit from its Drilling and Evaluation division.
Meanwhile, revenues of $4.3 billion were 32.1% higher than the year-ago quarter and ahead of the Zacks Consensus Estimate of $4.1 billion. North American revenues rose 44% year over year to $1.8 billion, while revenues from Halliburton’s international operations were up 24.8% from the year-ago period to $2.5 billion.
In more good news for investors, Halliburton raised its quarterly dividend by 167% to 12 cents per share (or 48 cents per share annualized). Further, as part of its ongoing commitment to debt reduction, the company announced that it will partly redeem its $1 billion of senior notes due in 2025.
Halliburton was the last of the ‘Big Three’ oil services firms to report fourth-quarter results after rivals Schlumberger (SLB - Free Report) and Baker Hughes (BKR - Free Report) came out with contrasting releases last week.
Schlumberger, the largest oilfield contractor, announced fourth-quarter 2021 earnings of 41 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 39 cents. SLB recorded total revenues of $6.2 billion, outpacing the Zacks Consensus Estimate by 2.1%.
Schlumberger’s strong quarterly earnings resulted from higher contributions from Europe/CIS/Africa, strong North America rig activity and increased well construction activities in the U.S. Gulf of Mexico.
On the other hand, Baker Hughes reported fourth-quarter 2021 adjusted earnings of 25 cents per share, missing the Zacks Consensus Estimate of 29 cents due to lower cost productivity in Digital Solutions.
However, BKR’s revenues for the October-December period totaled $5.5 billion, edging past the Zacks Consensus Estimate by 0.4%. The top line beat came on the back of better-than-expected sales from Baker Hughes’ ‘Oilfield Services’ unit.
Inside Halliburton’s Segments
Coming back to HAL, operating income from the Completion and Production segment was $347 million, 23% above the year-ago level of $282 million. The division’s performance was buoyed by improving completion tool sales worldwide, and strength in the pressure pumping business across onshore North America and Middle East/Asia.
However, the segment's profit missed the Zacks Consensus Estimate of $351 million due to lower stimulation activity in Latin America, Canada, and the Gulf of Mexico, tepid well intervention work in Brazil, weak pipeline services in Europe/Africa/CIS and Asia, to go with disappointing artificial lift activity in North America land.
Drilling and Evaluation unit profit surged from $117 million in the fourth quarter of 2020 to $269 million in the corresponding period of 2021. The division also managed to beat the Zacks Consensus Estimate of $229 million. This was primarily due to overall increased drilling-associated activities, higher wireline operations in Guyana, as well as increased software revenues in Latin America and Middle East/Asia, an uptick in project management activity in Ecuador and India, together with a pick-up in wireline operations in the Middle East/Asia region.
Balance Sheet
Halliburton, reported fourth-quarter capital expenditure of $316 million. For the full year, HAL’s spending totaled $799 million – in line with its guidance. As of Dec 31, 2021, the company had approximately $3 billion in cash/cash equivalents and $9.1 billion in long-term debt, representing a debt-to-capitalization ratio of 57.6%.
Management’s Outlook
Halliburton — the world’s biggest provider of hydraulic fracking — noted that its execution remained solid throughout 2021. Looking ahead, the company expects industry fundamentals to stay supportive, which will spur growth in both North American and the overseas markets. Halliburton believes that it is perfectly placed to benefit from this emerging multi-year upcycle based on its smart strategy, digital leadership, capital efficiency, while aiming for a sustainable energy future. The Houston-based company’s cash flow generation capabilities and balance sheet strength should also ensure increased shareholder returns.
Zacks Rank & Key Pick
Halliburton currently carries a Zacks Rank #2 (Buy).
Apart from HAL, investors interested in the oilfield services space might look at Oceaneering International (OII - Free Report) , which also has a Zacks Rank of 2.
Oceaneering International is valued at around $1.2 billion. OII has a projected earnings growth rate of 163.9% for this year.
The company beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 62.3%. Oceaneering International has gained around 27% in a year.
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Halliburton (HAL) Tops Q4 Earnings Estimates, Hikes Dividend
Halliburton Company (HAL - Free Report) reported fourth-quarter 2021 adjusted net income per share of 36 cents, beating the Zacks Consensus Estimate of 34 cents. The company had reported a profit of 18 cents in the year-ago quarter. The outperformance reflects stronger-than-expected profit from its Drilling and Evaluation division.
Meanwhile, revenues of $4.3 billion were 32.1% higher than the year-ago quarter and ahead of the Zacks Consensus Estimate of $4.1 billion. North American revenues rose 44% year over year to $1.8 billion, while revenues from Halliburton’s international operations were up 24.8% from the year-ago period to $2.5 billion.
In more good news for investors, Halliburton raised its quarterly dividend by 167% to 12 cents per share (or 48 cents per share annualized). Further, as part of its ongoing commitment to debt reduction, the company announced that it will partly redeem its $1 billion of senior notes due in 2025.
Halliburton was the last of the ‘Big Three’ oil services firms to report fourth-quarter results after rivals Schlumberger (SLB - Free Report) and Baker Hughes (BKR - Free Report) came out with contrasting releases last week.
Schlumberger, the largest oilfield contractor, announced fourth-quarter 2021 earnings of 41 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 39 cents. SLB recorded total revenues of $6.2 billion, outpacing the Zacks Consensus Estimate by 2.1%.
Schlumberger’s strong quarterly earnings resulted from higher contributions from Europe/CIS/Africa, strong North America rig activity and increased well construction activities in the U.S. Gulf of Mexico.
On the other hand, Baker Hughes reported fourth-quarter 2021 adjusted earnings of 25 cents per share, missing the Zacks Consensus Estimate of 29 cents due to lower cost productivity in Digital Solutions.
However, BKR’s revenues for the October-December period totaled $5.5 billion, edging past the Zacks Consensus Estimate by 0.4%. The top line beat came on the back of better-than-expected sales from Baker Hughes’ ‘Oilfield Services’ unit.
Inside Halliburton’s Segments
Coming back to HAL, operating income from the Completion and Production segment was $347 million, 23% above the year-ago level of $282 million. The division’s performance was buoyed by improving completion tool sales worldwide, and strength in the pressure pumping business across onshore North America and Middle East/Asia.
However, the segment's profit missed the Zacks Consensus Estimate of $351 million due to lower stimulation activity in Latin America, Canada, and the Gulf of Mexico, tepid well intervention work in Brazil, weak pipeline services in Europe/Africa/CIS and Asia, to go with disappointing artificial lift activity in North America land.
Drilling and Evaluation unit profit surged from $117 million in the fourth quarter of 2020 to $269 million in the corresponding period of 2021. The division also managed to beat the Zacks Consensus Estimate of $229 million. This was primarily due to overall increased drilling-associated activities, higher wireline operations in Guyana, as well as increased software revenues in Latin America and Middle East/Asia, an uptick in project management activity in Ecuador and India, together with a pick-up in wireline operations in the Middle East/Asia region.
Balance Sheet
Halliburton, reported fourth-quarter capital expenditure of $316 million. For the full year, HAL’s spending totaled $799 million – in line with its guidance. As of Dec 31, 2021, the company had approximately $3 billion in cash/cash equivalents and $9.1 billion in long-term debt, representing a debt-to-capitalization ratio of 57.6%.
Management’s Outlook
Halliburton — the world’s biggest provider of hydraulic fracking — noted that its execution remained solid throughout 2021. Looking ahead, the company expects industry fundamentals to stay supportive, which will spur growth in both North American and the overseas markets. Halliburton believes that it is perfectly placed to benefit from this emerging multi-year upcycle based on its smart strategy, digital leadership, capital efficiency, while aiming for a sustainable energy future. The Houston-based company’s cash flow generation capabilities and balance sheet strength should also ensure increased shareholder returns.
Zacks Rank & Key Pick
Halliburton currently carries a Zacks Rank #2 (Buy).
Apart from HAL, investors interested in the oilfield services space might look at Oceaneering International (OII - Free Report) , which also has a Zacks Rank of 2.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Oceaneering International is valued at around $1.2 billion. OII has a projected earnings growth rate of 163.9% for this year.
The company beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 62.3%. Oceaneering International has gained around 27% in a year.