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Halliburton Q3 Earnings Miss on Weak North American Activity
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Halliburton Company (HAL - Free Report) reported third-quarter 2024 adjusted net income per share of 73 cents, missing the Zacks Consensus Estimate of 75 cents and below the year-ago quarter profit of 79 cents (adjusted). The weak numbers reflect subdued performance in the North American region and the effects of the August cyberattack incident.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Meanwhile, revenues of $5.7 billion were 1.8% lower year over year and missed the Zacks Consensus Estimate of $5.8 billion.
Inside Halliburton’s Regions & Segments
North American revenues fell 8.5% year over year to $2.4 billion but just about managed to beat our projection. On the other hand, revenues from Halliburton’s international operations were up 3.6% from the year-ago period to $3.3 billion but failed to surpass our estimate by $3.5 billion.
Operating income from the Completion and Production segment was $669 million, down from the year-ago level of $746 million and below our projection of $680.9 million. The division’s performance was dragged down by a dip in U.S. onshore pressure pumping services, deteriorating completion tool sales in North America and Europe/Africa, plus lower stimulation activity in Latin America. These factors were partly offset by enhanced pressure pumping services and higher completion tool sales in the Middle East.
Drilling and Evaluation unit profit improved from $378 million in the third quarter of 2023 to $406 million in the corresponding period of 2024. Our model estimated the figure at $425.3 million. This performance could be attributed to higher drilling-related services in Latin America and a gain in worldwide software sales to go with rising wireline activity levels across the Middle East/Asia region. Partly offsetting these positives were lower drilling-related services in Europe, lower fluid services in North America, testing services weakness in Latin America and reduced wireline activity in the Western Hemisphere.
Halliburton Company Price, Consensus and EPS Surprise
Halliburton reported third-quarter capital expenditure of $339 million, less than our projection of $359 million. As of Sept. 30, 2024, the Zacks Rank #4 (Sell) company had approximately $2.2 billion in cash/cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 42.5. HAL bought back $196 million worth its stock during the July-September period. The company generated $841 million of cash flow from operations in the third quarter, leading to a free cash flow of $543 million.
Halliburton — the world’s biggest provider of hydraulic fracking — remains confident in meeting its full-year targets for free cash flow and shareholder returns, with both set to accelerate in the fourth quarter. In North America, strategic initiatives have strengthened the resilience and profitability of its business, with further plans to expand the Zeus platform and drilling services for added value.
On the international front, Halliburton anticipates growth driven by a strong technology portfolio, a distinct value proposition, and a focused strategy. The company sees solid opportunities across various business lines and regions and aims to capitalize on these by delivering unique value, prioritizing high-return investments, and enhancing free cash flow and shareholder returns.
Important Oilfield Service Earnings at a Glance
While we have discussed Halliburton’s third-quarter results in detail, let’s take a look at the two other key reports of this space.
Oil service biggie SLB (SLB - Free Report) reported third-quarter 2024 adjusted earnings per share of 89 cents, a penny ahead of the Zacks Consensus Estimate and higher than the year-ago quarter’s profit of 78 cents. The robust numbers reflect broad-based earnings growth and margin expansion, especially in the Middle East, Asia and offshore North America. Additionally, cost optimization, greater adoption of digital solutions and contributions from long-cycle deepwater and gas projects played significant roles.
SLB reported a free cash flow of $1.8 billion in the third quarter. As of Sept. 30, 2024, the company had approximately $4.5 billion in cash and short-term investments. It registered a long-term debt of $11.9 billion at the end of the quarter.
Rounding out the big three oilfield services providers, Baker Hughes (BKR - Free Report) reported third-quarter 2024 adjusted earnings of 67 cents per share, which beat the Zacks Consensus Estimate of 60 cents. The bottom line also improved from the year-ago level of 42 cents. The strong quarterly earnings were primarily driven by higher operational performance across both segments and improving EBITDA margins, which reached 17.5%, the highest since the company's formation.
Baker Hughes generated a free cash flow of $754 million in the reported quarter compared with $592 million a year ago. As of Sept. 30, 2024, it had cash and cash equivalents of $2.7 billion. BKR had a long-term debt of $6 billion at the end of the reported quarter, marking a debt-to-capitalization of 27.3%.
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Halliburton Q3 Earnings Miss on Weak North American Activity
Halliburton Company (HAL - Free Report) reported third-quarter 2024 adjusted net income per share of 73 cents, missing the Zacks Consensus Estimate of 75 cents and below the year-ago quarter profit of 79 cents (adjusted). The weak numbers reflect subdued performance in the North American region and the effects of the August cyberattack incident.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Meanwhile, revenues of $5.7 billion were 1.8% lower year over year and missed the Zacks Consensus Estimate of $5.8 billion.
Inside Halliburton’s Regions & Segments
North American revenues fell 8.5% year over year to $2.4 billion but just about managed to beat our projection. On the other hand, revenues from Halliburton’s international operations were up 3.6% from the year-ago period to $3.3 billion but failed to surpass our estimate by $3.5 billion.
Operating income from the Completion and Production segment was $669 million, down from the year-ago level of $746 million and below our projection of $680.9 million. The division’s performance was dragged down by a dip in U.S. onshore pressure pumping services, deteriorating completion tool sales in North America and Europe/Africa, plus lower stimulation activity in Latin America. These factors were partly offset by enhanced pressure pumping services and higher completion tool sales in the Middle East.
Drilling and Evaluation unit profit improved from $378 million in the third quarter of 2023 to $406 million in the corresponding period of 2024. Our model estimated the figure at $425.3 million. This performance could be attributed to higher drilling-related services in Latin America and a gain in worldwide software sales to go with rising wireline activity levels across the Middle East/Asia region. Partly offsetting these positives were lower drilling-related services in Europe, lower fluid services in North America, testing services weakness in Latin America and reduced wireline activity in the Western Hemisphere.
Halliburton Company Price, Consensus and EPS Surprise
Halliburton Company price-consensus-eps-surprise-chart | Halliburton Company Quote
Balance Sheet
Halliburton reported third-quarter capital expenditure of $339 million, less than our projection of $359 million. As of Sept. 30, 2024, the Zacks Rank #4 (Sell) company had approximately $2.2 billion in cash/cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 42.5. HAL bought back $196 million worth its stock during the July-September period. The company generated $841 million of cash flow from operations in the third quarter, leading to a free cash flow of $543 million.
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 — remains confident in meeting its full-year targets for free cash flow and shareholder returns, with both set to accelerate in the fourth quarter. In North America, strategic initiatives have strengthened the resilience and profitability of its business, with further plans to expand the Zeus platform and drilling services for added value.
On the international front, Halliburton anticipates growth driven by a strong technology portfolio, a distinct value proposition, and a focused strategy. The company sees solid opportunities across various business lines and regions and aims to capitalize on these by delivering unique value, prioritizing high-return investments, and enhancing free cash flow and shareholder returns.
Important Oilfield Service Earnings at a Glance
While we have discussed Halliburton’s third-quarter results in detail, let’s take a look at the two other key reports of this space.
Oil service biggie SLB (SLB - Free Report) reported third-quarter 2024 adjusted earnings per share of 89 cents, a penny ahead of the Zacks Consensus Estimate and higher than the year-ago quarter’s profit of 78 cents. The robust numbers reflect broad-based earnings growth and margin expansion, especially in the Middle East, Asia and offshore North America. Additionally, cost optimization, greater adoption of digital solutions and contributions from long-cycle deepwater and gas projects played significant roles.
SLB reported a free cash flow of $1.8 billion in the third quarter. As of Sept. 30, 2024, the company had approximately $4.5 billion in cash and short-term investments. It registered a long-term debt of $11.9 billion at the end of the quarter.
Rounding out the big three oilfield services providers, Baker Hughes (BKR - Free Report) reported third-quarter 2024 adjusted earnings of 67 cents per share, which beat the Zacks Consensus Estimate of 60 cents. The bottom line also improved from the year-ago level of 42 cents. The strong quarterly earnings were primarily driven by higher operational performance across both segments and improving EBITDA margins, which reached 17.5%, the highest since the company's formation.
Baker Hughes generated a free cash flow of $754 million in the reported quarter compared with $592 million a year ago. As of Sept. 30, 2024, it had cash and cash equivalents of $2.7 billion. BKR had a long-term debt of $6 billion at the end of the reported quarter, marking a debt-to-capitalization of 27.3%.