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Halliburton Company (HAL - Free Report) reported fourth-quarter 2023 adjusted net income per share of 86 cents, surpassing the Zacks Consensus Estimate of 80 cents and well above the year-ago quarter profit of 72 cents (adjusted). The outperformance reflects strength in the international markets, partly offset by weak performance in the North American region.
Meanwhile, revenues of $5.7 billion were 2.8% higher than the corresponding period of 2022 but came below the Zacks Consensus Estimate (by some $47 million).
In good news for investors, Halliburton raised its quarterly dividend by 6.3% to 17 cents per share (or 68 cents per share annualized).
Halliburton Company Price, Consensus and EPS Surprise
North American revenues fell 7.2% year over year to $2.4 billion, which also failed to meet our projection of $2.7 billion. Revenues from Halliburton’s international operations were up 11.6% from the year-ago period to $3.3 billion and surpassed our estimate of $3.1 billion.
Operating income from the Completion and Production segment was $716 million, up handsomely from the year-ago level of $659 million but below our projection of $701.7 million. The division’s performance was buoyed by improving completion tool sales in the Gulf of Mexico, Africa, and the Middle East. These factors were offset by lower stimulation activity in U.S. onshore and Mexico, tepid artificial lift activity in U.S. land, to go with weak completion tool sales in Latin America.
Drilling and Evaluation unit profit improved from $387 million in the fourth quarter of 2022 to $420 million in the corresponding period of 2023. However, the division marginally missed our estimate of $421.7 million. This performance could be attributed to higher software sales in in the Middle East/Asia, Africa, and Latin America, plus a pickup in fluid services in the Western Hemisphere and Africa. Partly offsetting these positives was the disruption in Norway activity on account of adverse weather.
Balance Sheet
Halliburton reported fourth-quarter capital expenditure of $399 million, higher than our projection of $358.5 million. As of Dec 31, 2023, the Zacks Rank #3 (Hold) company had approximately $2.3 billion in cash/cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 44.7. HAL also bought back $254 million worth its stock during the October-December period. The company generated $1.4 billion of cash flow from operations in the fourth quarter, leading to free cash flow of $1.1 billion.
Halliburton — the world’s biggest provider of hydraulic fracking — noted that 2023 turned out to be a great year, with both its segments recording their highest operating margins in over a decade. Looking ahead, the company sees strong demand for oilfield services this year. HAL, which generated an impressive $2.3 billion of free cash flow in 2023, sees the momentum continuing in 2024 as well. Regarding debt retirement, this yea, Halliburton repaid some $300 million to further improve its balance sheet strength.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
SLB (SLB - Free Report) , the largest oilfield contractor, announced fourth-quarter 2023 earnings of 86 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 84 cents. SLB’s bottom line also significantly increased from the year-ago quarter’s earnings of 71 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activity in the international market. As of Dec 31, 2023, the company had approximately $4 billion in cash and short-term investments. It had a long-term debt of $10.8 billion at the end of 2023.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported fourth-quarter adjusted earnings per share of 28 cents, slightly below the Zacks Consensus Estimate of 31 cents. The bottom line was adversely affected by a decline in realized weighted natural gas liquid price and milder winter conditions observed in 2023. However, KMI’s fourth-quarter DCF was $1.2 billion, down $46 million from a year ago.
As of Dec 31, 2023, Kinder Morgan reported $83 million in cash and cash equivalents. Its long-term debt amounted to $27.9 billion at the quarter-end. In its initial budget for 2024, KMI set its adjusted EBITDA guidance of $8.2 billion and a dividend of $1.15 per share, suggesting an increase from the prior-year reported figure of $1.13.
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Halliburton (HAL) Beats Q4 Earnings Estimates, Ups Dividend
Halliburton Company (HAL - Free Report) reported fourth-quarter 2023 adjusted net income per share of 86 cents, surpassing the Zacks Consensus Estimate of 80 cents and well above the year-ago quarter profit of 72 cents (adjusted). The outperformance reflects strength in the international markets, partly offset by weak performance in the North American region.
Meanwhile, revenues of $5.7 billion were 2.8% higher than the corresponding period of 2022 but came below the Zacks Consensus Estimate (by some $47 million).
In good news for investors, Halliburton raised its quarterly dividend by 6.3% to 17 cents per share (or 68 cents per share annualized).
Halliburton Company Price, Consensus and EPS Surprise
Halliburton Company price-consensus-eps-surprise-chart | Halliburton Company Quote
Inside Halliburton’s Regions & Segments
North American revenues fell 7.2% year over year to $2.4 billion, which also failed to meet our projection of $2.7 billion. Revenues from Halliburton’s international operations were up 11.6% from the year-ago period to $3.3 billion and surpassed our estimate of $3.1 billion.
Operating income from the Completion and Production segment was $716 million, up handsomely from the year-ago level of $659 million but below our projection of $701.7 million. The division’s performance was buoyed by improving completion tool sales in the Gulf of Mexico, Africa, and the Middle East. These factors were offset by lower stimulation activity in U.S. onshore and Mexico, tepid artificial lift activity in U.S. land, to go with weak completion tool sales in Latin America.
Drilling and Evaluation unit profit improved from $387 million in the fourth quarter of 2022 to $420 million in the corresponding period of 2023. However, the division marginally missed our estimate of $421.7 million. This performance could be attributed to higher software sales in in the Middle East/Asia, Africa, and Latin America, plus a pickup in fluid services in the Western Hemisphere and Africa. Partly offsetting these positives was the disruption in Norway activity on account of adverse weather.
Balance Sheet
Halliburton reported fourth-quarter capital expenditure of $399 million, higher than our projection of $358.5 million. As of Dec 31, 2023, the Zacks Rank #3 (Hold) company had approximately $2.3 billion in cash/cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 44.7. HAL also bought back $254 million worth its stock during the October-December period. The company generated $1.4 billion of cash flow from operations in the fourth quarter, leading to free cash flow of $1.1 billion.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Management Remarks & Outlook
Halliburton — the world’s biggest provider of hydraulic fracking — noted that 2023 turned out to be a great year, with both its segments recording their highest operating margins in over a decade. Looking ahead, the company sees strong demand for oilfield services this year. HAL, which generated an impressive $2.3 billion of free cash flow in 2023, sees the momentum continuing in 2024 as well. Regarding debt retirement, this yea, Halliburton repaid some $300 million to further improve its balance sheet strength.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
SLB (SLB - Free Report) , the largest oilfield contractor, announced fourth-quarter 2023 earnings of 86 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 84 cents. SLB’s bottom line also significantly increased from the year-ago quarter’s earnings of 71 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activity in the international market. As of Dec 31, 2023, the company had approximately $4 billion in cash and short-term investments. It had a long-term debt of $10.8 billion at the end of 2023.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported fourth-quarter adjusted earnings per share of 28 cents, slightly below the Zacks Consensus Estimate of 31 cents. The bottom line was adversely affected by a decline in realized weighted natural gas liquid price and milder winter conditions observed in 2023. However, KMI’s fourth-quarter DCF was $1.2 billion, down $46 million from a year ago.
As of Dec 31, 2023, Kinder Morgan reported $83 million in cash and cash equivalents. Its long-term debt amounted to $27.9 billion at the quarter-end. In its initial budget for 2024, KMI set its adjusted EBITDA guidance of $8.2 billion and a dividend of $1.15 per share, suggesting an increase from the prior-year reported figure of $1.13.