uploads///Operating Revenue split

North America and the Middle East drove Halliburton in 2014

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Jan. 19 2015, Published 11:24 a.m. ET

Revenue share by segment 

In this series, we’re discussing Halliburton’s operations, performance, and finances. In this part of the series, we’ll discuss each operating segment’s contribution to the company’s total revenue. We’ll also map Halliburton’s operations into various geographic segments.

The revenue split from Halliburton’s (HAL) business segments remained steady in 2014. In 9M14, the company earned ~39% of its revenue from the Drilling and Evaluation segment. It earned 61% from the Completion and Production segment. In 9M13, Halliburton earned 40% and 60% from these two segments, respectively. Throughout this series, we’ll discuss the segments in more detail.

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Operations drove Halliburton’s growth

From 9M13 to 9M14, Halliburton’s revenue from its North American operations increased at a higher rate of 13.9%—compared to its international operations. Its international operations, the operations outside of North America, increased by 7.3%.

From 9M13 to 9M14, Halliburton’s North American operations gained a larger geographic share of its total revenue—54% versus 52%. This was primarily due to higher rig counts in the US in the past year. During 2014, US rig counts averaged 1,862—compared to 1,716 in the rest of the world. From 2013 to 2014, the average US rig count increased by 5.7%—compared to 3.9% for the rest of the world.

However, the recent drop in WTI’s (or West Texas Intermediate) price started to negatively affect the US rig count. Read Why are chips down for US rigs? to learn more about the US rig count.

During 9M14, Halliburton’s Middle East and Asia operations also grew by 14.5%—compared to the same period the previous year. WTI’s price is the benchmark price for US oil producers. Low crude oil prices can also affect other oilfield service companies’ revenue—like Baker Hughes (BHI), Schlumberger (SLB), and Weatherford International (WFT). These companies are part of the VanEck Vectors Oil Services ETF (OIH).

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