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Halliburton Company (HAL - Free Report) reported first-quarter 2022 adjusted net income per share of 35 cents, in line with the Zacks Consensus Estimate. The company had reported a profit of 19 cents in the year-ago quarter. The performance reflects stronger-than-expected profit from its Drilling and Evaluation division.
Meanwhile, revenues of $4.3 billion were 24.1% higher than the year-ago quarter and came ahead of the Zacks Consensus Estimate by 2.4%. North American revenues rose 37.1% year over year to $1.9 billion, while revenues from Halliburton’s international operations were up 15.2% from the year-ago period to $2.4 billion.
Further, as part of its ongoing commitment to debt reduction, the company announced that it redeemed $600 million of its $1 billion of senior notes due in 2025.
Halliburton Company Price, Consensus and EPS Surprise
Operating income from the Completion and Production segment was $296 million, 17.5% above the year-ago level of $252 million. The division’s performance was buoyed by improving completion tool sales in the Western Hemisphere and the Middle East, strength in the pressure pumping and artificial lift businesses across the Western Hemisphere, higher cementing activity in Africa and Middle East/Asia, to go with demand uptick for Halliburton’s well intervention services in onshore North America and the Eastern Hemisphere.
However, the segment profit missed the Zacks Consensus Estimate of $349 million due to activity slowdown across an array of product service lines in Europe, and decrease in completion tool sales in Asia.
Drilling and Evaluation unit profit surged from $171 million in the first quarter of 2021 to $294 million in the corresponding period of 2022. The division also managed to beat the Zacks Consensus Estimate of $250 million. This was primarily due to overall increased drilling-associated activities, higher wireline operations in North America land, Latin America, and the Middle East, a pick-up in overseas testing services, as well as increased project management activity in Latin America, India, and Oman.
Balance Sheet
Halliburton reported first-quarter capital expenditure of $189 million. As of Mar 31, 2022, the company had approximately $2.2 billion in cash/cash equivalents and $8.5 billion in long-term debt, representing a debt-to-capitalization ratio of 54.8%.
Management’s Outlook
Halliburton — the world’s biggest provider of hydraulic fracking — noted that the energy landscape across North America is exhibiting considerable tightness. The company’s Completion and Production unit should see margins expanding, with high commodity prices and robust customer demand pitted against the backdrop of an equipment market that is almost entirely sold out.
Looking ahead, the company expects its international business to prosper through the rest of 2022. According to HAL, the revenue growth witnessed during the first quarter across all regions is proof that the multi-year upcycle has already started. Halliburton believes that its smart strategy, digital leadership, capital efficiency, and the global presence points to a rosy outlook. The Houston-based company’s cash flow generation capabilities and balance sheet strength should also ensure increased shareholder returns.
Zacks Rank & Key Picks
Halliburton currently carries a Zacks Rank #2 (Buy).
Apart from HAL, investors interested in the energy sector might look at Devon Energy (DVN - Free Report) , Canadian Natural Resources (CNQ - Free Report) and ConocoPhillips (COP - Free Report) . Each of the companies sports a Zacks Rank of 1.
Devon Energy: Devon Energy is valued at some $42.2 billion. The Zacks Consensus Estimate for DVN’s 2022 earnings has been revised 29% upward over the past 60 days.
Devon Energy, headquartered in Oklahoma City, OK, delivered a 14.9% beat in Q4. DVN shares have gained around 207.9% in a year.
Canadian Natural Resources: CNQ beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 18.7%, on average.
Canadian Natural is valued at around $78.2 billion. CNQ has seen its shares gain around 126.7% in a year.
ConocoPhillips: ConocoPhillips is valued at some $134.1 billion. The Zacks Consensus Estimate for COP’s 2022 earnings has been revised 31.2% upward over the past 60 days.
ConocoPhillips, headquartered in Houston, TX, has a trailing four-quarter earnings surprise of roughly 12.6%, on average. COP shares have gained around 110% in a year.
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Halliburton (HAL) Q1 Earnings Meet Estimates, Sales Beat
Halliburton Company (HAL - Free Report) reported first-quarter 2022 adjusted net income per share of 35 cents, in line with the Zacks Consensus Estimate. The company had reported a profit of 19 cents in the year-ago quarter. The performance reflects stronger-than-expected profit from its Drilling and Evaluation division.
Meanwhile, revenues of $4.3 billion were 24.1% higher than the year-ago quarter and came ahead of the Zacks Consensus Estimate by 2.4%. North American revenues rose 37.1% year over year to $1.9 billion, while revenues from Halliburton’s international operations were up 15.2% from the year-ago period to $2.4 billion.
Further, as part of its ongoing commitment to debt reduction, the company announced that it redeemed $600 million of its $1 billion of senior notes due in 2025.
Halliburton Company Price, Consensus and EPS Surprise
Halliburton Company price-consensus-eps-surprise-chart | Halliburton Company Quote
Inside Halliburton’s Segments
Operating income from the Completion and Production segment was $296 million, 17.5% above the year-ago level of $252 million. The division’s performance was buoyed by improving completion tool sales in the Western Hemisphere and the Middle East, strength in the pressure pumping and artificial lift businesses across the Western Hemisphere, higher cementing activity in Africa and Middle East/Asia, to go with demand uptick for Halliburton’s well intervention services in onshore North America and the Eastern Hemisphere.
However, the segment profit missed the Zacks Consensus Estimate of $349 million due to activity slowdown across an array of product service lines in Europe, and decrease in completion tool sales in Asia.
Drilling and Evaluation unit profit surged from $171 million in the first quarter of 2021 to $294 million in the corresponding period of 2022. The division also managed to beat the Zacks Consensus Estimate of $250 million. This was primarily due to overall increased drilling-associated activities, higher wireline operations in North America land, Latin America, and the Middle East, a pick-up in overseas testing services, as well as increased project management activity in Latin America, India, and Oman.
Balance Sheet
Halliburton reported first-quarter capital expenditure of $189 million. As of Mar 31, 2022, the company had approximately $2.2 billion in cash/cash equivalents and $8.5 billion in long-term debt, representing a debt-to-capitalization ratio of 54.8%.
Management’s Outlook
Halliburton — the world’s biggest provider of hydraulic fracking — noted that the energy landscape across North America is exhibiting considerable tightness. The company’s Completion and Production unit should see margins expanding, with high commodity prices and robust customer demand pitted against the backdrop of an equipment market that is almost entirely sold out.
Looking ahead, the company expects its international business to prosper through the rest of 2022. According to HAL, the revenue growth witnessed during the first quarter across all regions is proof that the multi-year upcycle has already started. Halliburton believes that its smart strategy, digital leadership, capital efficiency, and the global presence points to a rosy outlook. The Houston-based company’s cash flow generation capabilities and balance sheet strength should also ensure increased shareholder returns.
Zacks Rank & Key Picks
Halliburton currently carries a Zacks Rank #2 (Buy).
Apart from HAL, investors interested in the energy sector might look at Devon Energy (DVN - Free Report) , Canadian Natural Resources (CNQ - Free Report) and ConocoPhillips (COP - Free Report) . Each of the companies sports a Zacks Rank of 1.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Devon Energy: Devon Energy is valued at some $42.2 billion. The Zacks Consensus Estimate for DVN’s 2022 earnings has been revised 29% upward over the past 60 days.
Devon Energy, headquartered in Oklahoma City, OK, delivered a 14.9% beat in Q4. DVN shares have gained around 207.9% in a year.
Canadian Natural Resources: CNQ beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 18.7%, on average.
Canadian Natural is valued at around $78.2 billion. CNQ has seen its shares gain around 126.7% in a year.
ConocoPhillips: ConocoPhillips is valued at some $134.1 billion. The Zacks Consensus Estimate for COP’s 2022 earnings has been revised 31.2% upward over the past 60 days.
ConocoPhillips, headquartered in Houston, TX, has a trailing four-quarter earnings surprise of roughly 12.6%, on average. COP shares have gained around 110% in a year.