Why Halliburton Is Booming Despite Q3 Results

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Halliburton Co. (NYSE: HAL) released its third-quarter financial results before the markets opened on Monday. The firm said that it had $0.34 in earnings per share (EPS) and $5.55 billion in revenue, which compares with consensus estimates that called for $0.34 in EPS and $5.81 billion in revenue. The same period of last year reportedly had $0.50 in EPS and $6.17 billion in revenue.

Completion and Production unit revenues decreased 16% year over year to $3.51 billion. These results were primarily driven by lower pressure pumping activity and pricing in North America land, coupled with decreased completion tool sales in Latin America and reduced stimulation activity in Middle East/Asia. These declines were partially offset by increased cementing activity in the Eastern Hemisphere, improved completion tool sales in Europe/Africa/CIS and higher stimulation activity in Latin America.

Drilling and Evaluation revenues increased 2% to $2.04 billion. These results were driven by reduced drilling and wireline activity in North America and lower project management activity in Middle East/Asia. These declines were partially offset by higher drilling activity in the Eastern Hemisphere, fluids activity in Latin America and higher testing and software sales globally resulting in better overall margins.

The company offered no guidance for the fourth quarter. However, analysts are calling for $0.32 in EPS and $5.69 billion in revenue.

Jeff Miller, board chair, president and chief executive of Haliburton, commented:

International revenue, which was flat sequentially, was up 10% year to date and we remain confident that we will achieve high single-digit international growth for all of 2019. International growth continues across multiple regions, benefitting both our Drilling and Evaluation and Completion and Production divisions.

Our North America revenue decreased 11% sequentially driven by customer activity declines and the execution of our new playbook. I am proud of how our team performed in this challenging market. We are successfully implementing our new strategy and are focused on taking the right actions to deliver returns and cash flow for our shareholders.

Shares of Halliburton traded up more than 5% early Monday at $19.41, in a 52-week range of $16.97 to $37.54. The consensus price target is $27.40.


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