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Will the International Slowdown Hurt Halliburton in 2017?

PART:
1 2 3 4 5 6 7 8
Part 4
Will the International Slowdown Hurt Halliburton in 2017? PART 4 OF 8

Inside Halliburton’s Operating Income by Segment

HAL’s operating income

Halliburton’s (HAL) operating income in its D&E (Drilling and Evaluation) segment tanked 19% YoY (year-over-year) in 2Q17. Its C&P (Completion and Production) segment saw its operating income rise to $397 million in 2Q17, compared to an operating loss one year previously.

This improvement came on account of higher pressure pumping asset utilization and better pricing in HAL’s US onshore business.

Inside Halliburton’s Operating Income by Segment

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HAL makes up 3.4% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES), which has fallen 22% in the past year, compared with the 10% fall in HAL’s stock price.

Halliburton’s drivers in 2Q17

The following were positive drivers for HAL in 2Q17:

  • increased presure pumping utilization and better pricing in the US onshore business
  • higher completion tool sales for HAL in the Gulf of Mexico
  • higher drilling activity in Latin America
  • increased fluid activity in the Eastern Hemisphere

The following were negative drivers for HAL in 2Q17:

  • decreased stimulation services in the Middle East
  • pricing pressure across in the Middle East due to oversupply
  • lower revenues in Europe, Africa, and CIS (Commonwealth of Independent States) in 2Q17 over 2Q16

Net loss comparison with peers

Compared with HAL’s $28 million net income in 2Q17, Superior Energy Services’ (SPN) saw a net loss of $62 million in 2Q17, while National Oilwell Varco (NOV) saw a net loss of $74 million. Fairmount Santrol Holdings (FMSA) recorded net income of $10.5 million in 2Q17.

In the next part, we’ll discuss how dependent Halliburton has become on the rig count.

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