Halliburton Beats Estimate on International Demand

Written by: Michael Harris
January 22, 2020
  • Earnings came in at $0.32 per share vs $0.29 per share while revenue also beat expectations
  • The company reported a $2.2 billion charge to earnings due to lower North American shale activity
  • Halliburton dismissed 8% of its North American staff in 2019

Halliburton, the U.S. oilfield services firm, reported higher-than-expected quarterly earnings on the back of the increase in international demand. 

The company reported earnings of $0.32 per share compared to analysts’ average estimate of $0.29 per share. Although total revenue decreased 12.6%, the quarterly number of $5.19 billion is again higher than $5.10 billion expected by the market. 

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Overall, Halliburton finished 2019 with the total company revenue of $22 billion and adjusted the operating income of $2.1 billion. The company reported $900 million of free cash flow for the full year.

“2019 was an exceptional year for our safety and service quality performance. Our total recordable incident rate and non-productive time both improved by over 20%, historical bests across our business. This is a result of our employees’ continued commitment to safety and process execution,” said Jeff Miller, Chairman, President, and CEO of Halliburton. 

As expected, the oilfield giant reported a $2.2 billion charge to earnings mostly due to lower North American shale activity. The charge isn’t seen as a surprise as Halliburton’s main competitors – Schlumberger and Chevron – reported charges of $12 billion and $10 billion respectively. 

During the investors call, Miller noted “significantly lower activity in US land”, while its international business grew 10%. 

“This underscores the versatility and global reach of our business. In the fourth quarter, we took a $2.2 billion largely non-cash impairment charge and made strategic decisions to market for sale our pipeline services and well controlled product lines,” added Miller. 

The U.S. rig count has recorded a fall by 254, or roughly 24%, to 796 in the past year, which has had a strong impact on all oil companies in the United States. 

“We expect to grow at or above the market rate this year, consistently focusing on profitable growth and improving our international margins. Continued gas activity expansion in the Middle East, resolution of political issues in Latin America and several pending project awards may enable us to outgrow the market again in 2020,” said Miller. 

In 2019, Halliburton announced a decision to dismiss 8% of its staff in North America due to lower activity in this part of the world.