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Halliburton (HAL) Q4 Earnings on Deck: Here's How It Will Fare
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Halliburton Company (HAL - Free Report) is set to release fourth-quarter results on Jan 23. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 80 cents per share on revenues of $5.8 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 its Completion and Production division. Halliburton had reported adjusted net income per share of 79 cents, surpassing the Zacks Consensus Estimate of 77 cents. However, revenues of $5.8 billion came below the Zacks Consensus Estimate by some $35 million on tepid sales from Middle East/Asia.
HAL beat the Zacks Consensus Estimate in each of the last four quarters, which resulted in an average earnings surprise of 5.1%. 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 11.1% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 3.7% increase from the year-ago period.
Factors to Consider
After bouncing strongly from the depths of the pandemic, the oil and natural gas rig count in the United States has been gradually declining over the past year or so. Consequently, drilling activity — an important factor for services companies — has hit a speed bump. In the United States, a region on which Halliburton is highly dependent, the rig count at the end of the fourth quarter was 622 compared with 779 a year ago. This steady decline in rig count is a concern for contracting activity.
On a further bearish note, the increase in HAL’s costs might have dented the company’s to-be-reported bottom line. Going by our model, the company’s fourth-quarter cost of sales will likely total $4.7 billion, up 3% from the year-ago period. The upward cost trajectory could be attributed to the prevailing inflationary environment.
But giving some respite to the company, our expectation for the fourth-quarter operating income of the Completion & Production segment is pegged at $701.7 million, indicating a 6.5% improvement from the year-ago quarter on the back of higher international and offshore activity.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Halliburton is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -2.28%.
Zacks Rank: HAL currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Halliburton, here are some firms from the energy space that you may want to consider on the basis of our model:
ExxonMobil (XOM - Free Report) has an Earnings ESP of +1.93% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 2.
ExxonMobil beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. It has a trailing four-quarter earnings surprise of 0.6%, on average. Valued at around $387.1 billion, XOM has lost 12.9% in a year.
Range Resources Corporation (RRC - Free Report) has an Earnings ESP of +2.05% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 21.
Range Resources beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of 33.6%, on average. Valued at around $7.2 billion, RRC has gained 12.6% in a year.
Pembina Pipeline Corporation (PBA - Free Report) has an Earnings ESP of +0.31% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
Over the past 30 days, Pembina Pipeline saw the Zacks Consensus Estimate for 2023 move up 2.6%. Valued at around $18.7 billion, PBA has lost 6.5% in a year.
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Halliburton (HAL) Q4 Earnings on Deck: Here's How It Will Fare
Halliburton Company (HAL - Free Report) is set to release fourth-quarter results on Jan 23. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 80 cents per share on revenues of $5.8 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 its Completion and Production division. Halliburton had reported adjusted net income per share of 79 cents, surpassing the Zacks Consensus Estimate of 77 cents. However, revenues of $5.8 billion came below the Zacks Consensus Estimate by some $35 million on tepid sales from Middle East/Asia.
HAL beat the Zacks Consensus Estimate in each of the last four quarters, which resulted in an average earnings surprise of 5.1%. 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 11.1% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 3.7% increase from the year-ago period.
Factors to Consider
After bouncing strongly from the depths of the pandemic, the oil and natural gas rig count in the United States has been gradually declining over the past year or so. Consequently, drilling activity — an important factor for services companies — has hit a speed bump. In the United States, a region on which Halliburton is highly dependent, the rig count at the end of the fourth quarter was 622 compared with 779 a year ago. This steady decline in rig count is a concern for contracting activity.
On a further bearish note, the increase in HAL’s costs might have dented the company’s to-be-reported bottom line. Going by our model, the company’s fourth-quarter cost of sales will likely total $4.7 billion, up 3% from the year-ago period. The upward cost trajectory could be attributed to the prevailing inflationary environment.
But giving some respite to the company, our expectation for the fourth-quarter operating income of the Completion & Production segment is pegged at $701.7 million, indicating a 6.5% improvement from the year-ago quarter on the back of higher international and offshore activity.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Halliburton is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -2.28%.
Zacks Rank: HAL currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Halliburton, here are some firms from the energy space that you may want to consider on the basis of our model:
ExxonMobil (XOM - Free Report) has an Earnings ESP of +1.93% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 2.
You can see the complete list of today’s Zacks #1 Rank stocks here.
ExxonMobil beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. It has a trailing four-quarter earnings surprise of 0.6%, on average. Valued at around $387.1 billion, XOM has lost 12.9% in a year.
Range Resources Corporation (RRC - Free Report) has an Earnings ESP of +2.05% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 21.
Range Resources beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of 33.6%, on average. Valued at around $7.2 billion, RRC has gained 12.6% in a year.
Pembina Pipeline Corporation (PBA - Free Report) has an Earnings ESP of +0.31% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
Over the past 30 days, Pembina Pipeline saw the Zacks Consensus Estimate for 2023 move up 2.6%. Valued at around $18.7 billion, PBA has lost 6.5% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.