In fiscal 4Q15, analysts expect adjusted EPS (earnings per share) of $0.24 for Halliburton (HAL). This is 23% lower than the company’s adjusted EPS from fiscal 3Q15, and 80% lower than those from 4Q14. Lower spending by upstream energy producers has led to rate renegotiation and lower pricing for most of Halliburton’s product service lines in North America. In addition, earnings from some of its international regions have also been showing weakness, which may lead to a decline in Halliburton’s fiscal 4Q15 earnings.
Halliburton posted strong earnings growth from fiscal 1Q13 through fiscal 4Q14. Between 1Q13 and 4Q14, its adjusted EPS increased 78%. However, the fall in crude oil prices sent its fiscal 1Q15 adjusted EPS crashing by ~59% from the prior quarter. Between fiscal 1Q15 and fiscal 3Q15, it fell further, by another 37%.
Halliburton’s earnings versus estimates
In fiscal 3Q15, Halliburton’s adjusted EPS exceeded analysts’ consensus EPS by 14%. As noted in the graph above, Halliburton’s adjusted EPS have exceeded estimates in many quarters in the past. On average, the company’s adjusted EPS have exceeded consensus EPS by ~9% in the past 11 quarters.
Core Laboratories (CLB), Halliburton’s peer in the oilfield services and equipment provider industry, recorded a net income of $33 million in fiscal 3Q15 against Halliburton’s $54 million net loss. Analysts expect Core Laboratories’ fiscal 4Q15 net income to deteriorate to $0.65 per share from its adjusted fiscal 3Q15 net income of $0.83. In fiscal 4Q14, Core Laboratories’ adjusted earnings were $1.54 per share.
Halliburton makes up 12.5% of the VanEck Vectors Oil Services ETF (OIH), which tracks an index of 25 oilfield service companies. Halliburton is expected to release its fiscal 4Q15 earnings press release on January 25. Next, we’ll discuss what Halliburton’s management thinks about its outlook and its value drivers.