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What Are Halliburton’s Value Drivers?

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Drilling and Evaluation segment

In this article, we’ll discuss Halliburton’s 2016 value drivers. From 4Q15 to 4Q16, Halliburton’s Drilling and Evaluation (or D&E) segment’s revenue fell 22%. Halliburton makes up 0.19% of the iShares S&P 500 ETF (IVE).

However, on a quarter-over-quarter basis, the D&E segment registered a 5.8% revenue rise in 4Q16 due to higher onshore drilling activity in North America and increased earnings from consulting and project management activity in some parts of Africa.

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Completion and Production segment

From 4Q15 to 4Q16, HAL’s Completion and Production (or C&P) segment’s revenue fell ~20%. However, on a quarter-over-quarter basis, the segment registered a 4% revenue rise in 4Q16 due to its better utilization of HAL’s products in North America and its higher completion tool sales in the Gulf of Mexico offshore market.

4Q16 peer revenue comparison

Schlumberger’s (SLB) revenue rose 1% in 4Q16 compared to 3Q16, while Baker Hughes’s (BHI) revenue rose ~2% during the same period. From 4Q15 to 4Q16, Nabors Industries’ (NBR) revenue rose ~4%.

Next, we’ll discuss Halliburton’s operating incomes in these segments.

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