The shares of Halliburton Company (NYSE: HAL ) have been in decline for the last year and are down 50%. The US oil production activity has been slowing down, and the company has over 40% of its revenuesSunshine Kapital Stefan holds a BA in Finance from Halmstad University, Sweden and Lincolnshire & Humberside University in England. He has twenty years of institutional experience in Research and Portfolio Management, focusing on distressed situations and value opportunities. He is the CIO/Founder of Sunshine ...

Halliburton (HAL) reported $5.42 billion in revenue for the quarter ended March 2025, representing a year-over-year decline of 6.7%. EPS of $0.60 for the same period compares to $0.76 a year ago.The reported revenue represents a surprise of +3.04% over the Zacks Consensus Estimate of $5.26 billion. With the consensus EPS estimate being $0.60, the company has not delivered EPS surprise.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to ...

Revenue Performance - Total company revenue for Q1 2025 was $5.4 billion, a 7% decrease compared to Q1 2024[82] - Total revenue for Q1 2025 was $5.417 billion, a decrease of 7% compared to $5.804 billion in Q1 2024[109] - Completion and Production segment revenue decreased by 8% in Q1 2025, primarily due to lower pressure pumping services and completion tool sales in the Western Hemisphere[83] - Drilling and Evaluation segment revenue decreased by 6% in Q1 2025, driven by reduced drilling services in Mexico and the Middle East[84] - North America revenue decreased by 12% in Q1 2025, mainly due to lower stimulation activity in US Land[85] - International revenue decreased by 2% in Q1 2025, largely due to lower activity in Mexico, Senegal, and Italy[86] - Completion and Production revenue decreased by 8% to $3.120 billion, while Drilling and Evaluation revenue decreased by 6% to $2.297 billion compared to Q1 2024[109] - Latin America revenue decreased by 19% to $896 million, mainly due to lower activity in Mexico[114] - Europe/Africa/CIS revenue increased by 6% to $775 million, supported by improved activity in Norway and Namibia[115] - Middle East/Asia revenue rose by 6% to $1.510 billion, driven by increased activity in Kuwait and Saudi Arabia[116] Operating Income and Expenses - Operating income for Q1 2025 was $431 million, including impairments and other charges of $356 million, down from $987 million in Q1 2024[82] - Operating income for Q1 2025 was $431 million, down 56% from $987 million in Q1 2024, primarily due to a $356 million pre-tax charge for impairments and other charges[110][118] - The effective tax rate for Q1 2025 was 33.7%, significantly higher than 22.6% in Q1 2024, influenced by impairments and other charges[122] - The company recognized $30 million in SAP S4 upgrade expenses in Q1 2025, down from $34 million in Q1 2024[117] Cash Flow and Capital Management - Cash flows from operating activities were $377 million in Q1 2025, with capital expenditures of $302 million[88][96] - As of March 31, 2025, the company had $1.8 billion in cash and equivalents, down from $2.6 billion at the end of 2024[88] - The quarterly dividend rate is $0.17 per common share, totaling approximately $147 million[90] - The company repurchased 9.6 million shares of common stock for $250 million in Q1 2025[91] Future Outlook - The company expects a negative impact on earnings per share in Q2 2025 due to a 10% decrease in crude oil prices since the end of Q1 2025[108]

Core Insights - Halliburton Company reported first-quarter 2025 adjusted net income per share of 60 cents, matching the Zacks Consensus Estimate but down from 76 cents in the previous year, reflecting softer North American activity offset by international growth [1] - Revenues for the quarter were $5.4 billion, a decrease of 6.7% year over year, yet exceeding the Zacks Consensus Estimate of $5.3 billion [1] Segment Performance - North American revenues fell 12% year over year to $2.2 billion, missing projections of $2.4 billion [2] - International revenues decreased 2.4% to $3.2 billion but surpassed estimates of $2.8 billion [2] - The Completion and Production segment reported operating income of $531 million, down from $688 million last year and below the estimate of $541.5 million, primarily due to weaker pressure pumping services [3] - The Drilling and Evaluation unit's profit declined to $352 million from $398 million year over year, falling short of the estimate of $360.8 million, attributed to reduced drilling services in Mexico and the Middle East [4] Financial Position - Halliburton's first-quarter capital expenditure was $302 million, lower than the projected $318.2 million [5] - As of March 31, 2025, the company had approximately $1.8 billion in cash and $7.2 billion in long-term debt, resulting in a debt-to-capitalization ratio of 40.8% [5] - The company generated $377 million in cash flow from operations, leading to a free cash flow of $124 million [5] Management Outlook - Management emphasized strong international contract wins and increasing demand for advanced technologies, including the first closed-loop, autonomous fracturing operation [6] - Despite challenges in the broader energy market, Halliburton remains optimistic about long-term growth driven by technology and service quality [6] Investment Considerations - Halliburton currently holds a Zacks Rank 3 (Hold) [7] - Other companies in the Oil and Gas - Field Services sector include Helix Energy Solutions Group (Zacks Rank 1), Flotek Industries (Zacks Rank 2), and Nine Energy Service (Zacks Rank 2) [7]

Core Viewpoint - Halliburton has warned of a potential earnings impact in the second quarter due to tariffs and reduced oilfield activity in North America, leading to a decline in its share price by approximately 6% [1][5]. Company Performance - Halliburton's shares fell to $20.62, reflecting a 6% drop after the earnings forecast indicated a 2 to 3 cents per share impact from trade tensions [5]. - The company reported a profit of $204 million, or 24 cents per share, for the three months ending March 31, down from $606 million, or 68 cents per share, in the previous year [12]. - First-quarter revenue was $5.42 billion, surpassing analysts' average estimate of $5.28 billion [12]. - North America revenue decreased by 12% year-over-year to $2.2 billion [7]. Market Conditions - U.S. crude prices are currently below $64 per barrel, with many companies indicating they cannot drill profitably if prices fall below $65, which negatively affects demand for Halliburton's services [2]. - The oilfield service sector is concerned that tariffs on imported steel and parts will disrupt supply chains and increase equipment costs [6]. Future Outlook - Halliburton's CEO noted that customers are evaluating their activity plans, which may lead to higher than normal white space for committed fleets and potential retirement or export of fleets to international markets [3]. - The company forecasts a 1% to 3% increase in revenue for its completion and production division in the second quarter, while drilling and evaluation division revenue is expected to be flat to down 2% [11]. - International revenue is projected to be flat to slightly down year-over-year, primarily due to reduced drilling and project management activity in Mexico [8].

Group 1 - Halliburton's first-quarter earnings met analysts' expectations, but the company warned of future challenges, leading to a significant drop in its stock price [1][5] - The company reported earnings of $0.60 per share on revenue of $5.4 billion, slightly above Wall Street's expectations of $0.60 per share on sales of $5.3 billion [2] - North American revenue, which constitutes nearly half of Halliburton's business, decreased by 12% year over year, although this decline was partially mitigated by increased revenues from the Middle East and European markets [3] Group 2 - Executives indicated that future earnings could be negatively impacted by tariffs, estimating a reduction of $0.02 to $0.03 per share in the second quarter, with approximately 60% of this impact stemming from the completion & production segment [4] - Year-to-date, Halliburton's shares have declined by about 25%, and the stock has lost approximately half of its value over the past 12 months [5] - The cyclical nature of the oil industry suggests that energy stocks can be advantageous to buy during downturns, with Halliburton's current dividend yield at about 3.3%, appealing for long-term investors [6]

Core Viewpoint - Halliburton reported mixed Q1 2025 results, with revenue exceeding expectations but earnings per share aligning with analyst predictions, indicating both challenges and opportunities ahead [1][2]. Financial Performance - Revenue for Q1 2025 was $5.4 billion (GAAP), exceeding the consensus estimate of $5.273 billion by approximately $144 million, but down 6.9% from $5.8 billion in Q1 2024 [1][6]. - Earnings per share (EPS) was $0.60 (Non-GAAP), matching predictions but down 21.1% from $0.76 in the same quarter last year [2][3]. - Net income for Q1 2025 was $204 million (GAAP), a significant decrease of 66.3% from $606 million in Q1 2024 [3]. Business Overview - Halliburton is a leading oilfield services company providing a range of services to the energy industry, including reservoir management, drilling, and production optimization [4]. - The company is focusing on expanding its technological capabilities, particularly in digital and automation technologies, to improve service delivery and operational efficiency [5]. Segment Performance - The Completion and Production segment saw an 8% year-over-year revenue decline to $3.1 billion, with operating income falling by 23% [7]. - The Drilling and Evaluation segment experienced a 6% drop in revenue and a 12% decrease in operating income, primarily due to reduced drilling services in Mexico and the Middle East [7]. Geographic Performance - North America revenue decreased by 12%, driven by declining stimulation activity in the U.S. and lower tool sales in the Gulf of America [8]. - International markets saw an overall decline of 2%, with notable drops in Latin America, but growth in Europe/Africa and the Middle East/Asia segments [8]. Strategic Outlook - Halliburton remains optimistic about international tender activities, particularly in offshore opportunities extending through 2026 [10]. - The company plans to continue focusing on international market expansion and enhancing technological capabilities [10]. - Management emphasized maintaining a strong capital allocation framework, including ongoing share repurchases and dividend distributions [11].

Financial Data and Key Metrics Changes - Total company revenue for Q1 2025 was $5.4 billion, a decrease of 7% compared to Q1 2024 [28] - Adjusted operating margin was 14.5% [28] - Cash flow from operations was $377 million, and free cash flow was $124 million [7][35] - Reported net income per diluted share was $0.24, while adjusted net income per diluted share was $0.60 [27] Business Line Data and Key Metrics Changes - Completion and Production (C&P) division revenue was $3.1 billion, down 8% year-over-year, with operating income of $531 million, a decrease of 23% [29] - Drilling and Evaluation (D&E) division revenue was $2.3 billion, down 6% year-over-year, with operating income of $352 million, a decrease of 12% [30] - International revenue was $3.2 billion, a decrease of 2% year-over-year, while North America revenue was $2.2 billion, a decrease of 12% year-over-year [6][32] Market Data and Key Metrics Changes - Europe Africa revenue increased by 6% year-over-year to $775 million, driven by improved activity in Norway and Namibia [31] - Middle East Asia revenue also increased by 6% year-over-year to $1.5 billion, attributed to higher activity in Kuwait and Saudi Arabia [32] - Latin America revenue decreased by 19% year-over-year to $896 million, primarily due to lower activity in Mexico [32] Company Strategy and Development Direction - The company emphasizes technology, collaboration, and service quality as core to its competitive advantage [10][14] - Halliburton aims to maximize value in North America while driving growth engines internationally, particularly in unconventional, artificial lift, intervention, and directional drilling [15][19] - The company is focused on maintaining a strong position in the offshore market, leveraging advanced technologies for integrated projects [128][130] Management's Comments on Operating Environment and Future Outlook - Management noted increased uncertainty in the market due to trade dynamics and OPEC production, but remains confident in the fundamental role of oil and gas in global economic growth [8][11] - The outlook for international revenue is expected to be flat to slightly down, with strong tender activity and contract awards providing visibility [12][39] - Management anticipates solid free cash flow generation in 2025, with plans to return at least $1.6 billion to shareholders through buybacks and dividends [25] Other Important Information - The company recognized a pre-tax charge of $356 million related to severance costs and asset impairments [28] - Capital expenditures for Q1 were $302 million, with expectations of approximately 6% of revenue for the full year [35] Q&A Session Summary Question: North American activity outlook amidst commodity price volatility - Management indicated that customers are currently evaluating their activity scenarios, with a focus on production impacts from any potential declines in activity [45][48] Question: Trajectory of operations in Mexico - Management expressed that recovery in Mexico is uncertain, with expectations of a tough environment for the foreseeable future [51][52] Question: Growth prospects in Saudi Arabia - Management expects growth in Saudi Arabia, particularly in the Jafurah area, and highlighted opportunities in unconventional and artificial lift markets [57][58] Question: Margin progression expectations - Management provided guidance for Q2 margins, indicating specific impacts from tariffs and mobilization costs, with expectations for improvement in the second half of the year [60][66] Question: Impact of tariffs on business - Management noted a $0.02 to $0.03 impact per share from tariffs, with ongoing efforts to mitigate these effects through a diversified supply chain [94][96] Question: International spending outlook - Management highlighted solid growth in Norway and Brazil, with expectations for increased activity in Europe and Africa in the second half of the year [75][102]

Company Performance - Halliburton reported quarterly earnings of $0.60 per share, matching the Zacks Consensus Estimate, but down from $0.76 per share a year ago [1] - The company posted revenues of $5.42 billion for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 3.04%, but down from $5.8 billion year-over-year [2] - Over the last four quarters, Halliburton has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2] Stock Movement and Outlook - Halliburton shares have declined approximately 19.4% since the beginning of the year, compared to a 12.3% decline in the S&P 500 [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] - Current consensus EPS estimate for the upcoming quarter is $0.63 on revenues of $5.46 billion, and for the current fiscal year, it is $2.58 on revenues of $22.18 billion [7] Industry Context - The Oil and Gas - Field Services industry, to which Halliburton belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Halliburton's stock performance [5][6]

Financial Performance - Halliburton reported net income of $204 million, or $0.24 per diluted share, for Q1 2025, a decrease from $606 million, or $0.68 per diluted share, in Q1 2024[1]. - Total revenue for Q1 2025 was $5.4 billion, down from $5.8 billion in Q1 2024, with operating income decreasing to $431 million from $987 million[1][2]. - Adjusted net income for Q1 2025 was $517 million, or $0.60 per diluted share, compared to $679 million, or $0.76 per diluted share, in Q1 2024[1]. - Net income attributable to the company for Q1 2025 was $204 million, down 66.4% from $606 million in Q1 2024[35]. - Adjusted operating income for Q1 2025 was $787 million, compared to $987 million in Q1 2024, reflecting a decline of 20.3%[31]. - Free cash flow for Q1 2025 was $124 million, down 39.8% from $206 million in Q1 2024[39]. - Total cash flows provided by operating activities decreased to $377 million in Q1 2025 from $487 million in Q1 2024, a decline of 22.6%[28]. - Capital expenditures for Q1 2025 were $302 million, slightly down from $330 million in Q1 2024[28]. - The company recognized impairments and other charges totaling $356 million in Q1 2025, significantly impacting net income[31]. Revenue Breakdown - Completion and Production revenue decreased by 8% year-over-year to $3.1 billion, while Drilling and Evaluation revenue fell by 6% to $2.3 billion[5][6]. - North America revenue declined by 12% to $2.2 billion, primarily due to lower stimulation activity in US Land[7]. - International revenue was $3.2 billion, a decrease of 2% year-over-year, with Latin America revenue down 19% to $896 million[8][9]. - North America revenue decreased to $2,236 million in Q1 2025 from $2,546 million in Q1 2024, a decline of 12.2%[30]. - Operating income for the Completion and Production segment was $531 million in Q1 2025, down from $688 million in Q1 2024[30]. Strategic Initiatives - Halliburton launched autonomous hydraulic fracturing technology in North America and secured a contract with Petrobras for integrated drilling services in Brazil[14]. - Halliburton achieved the world's first closed-loop, autonomous fracturing operation, indicating strong technology adoption[3]. - The company recognized a pre-tax charge of $356 million due to severance costs and impairments during Q1 2025[14]. Upcoming Events - The company plans to host a conference call on April 22, 2025, to discuss its Q1 2025 financial results[40].