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Halliburton’s Estimates for 1Q17 and Fiscal 2017

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Updated

Halliburton’s estimates for the international market

Halliburton’s (HAL) management expects low commodity prices and reduced upstream capex budgets to affect its international deepwater and mature field markets in 2017.

In the company’s 4Q16 conference call, David Lesar, Halliburton’s chairman and CEO, commented, “Low commodity prices have stressed budgets and impacted economics across the deepwater and mature field markets, which has led to decreased activity and pricing throughout 2016. These headwinds still persist today.”

HAL comprises 9.9% of the iShares US Oil Equipment & Services ETF (IEZ). For investors looking for some exposure to the oil and gas equipment and services industry, the oil and gas equipment and services sector makes up 77.2% of IEZ.

Halliburton comprises 0.18% of the iShares Russell 3000 ETF (IWV). The energy sector makes up 6.1% of IWV. IWV tracks the Russell 3000 Index (RUA-INDEX), which comprises 3,000 large companies in the US. The RUA-INDEX increased 16% in the past year versus a 37% rise in HAL’s stock price.

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Looking ahead to fiscal 2017 

Halliburton identified the following strategies for 2017:

  • giving up market share in North America to regain operating profitability
  • reactivating cold stacked equipment following higher demand for oilfield services products and services in 1Q17
  • higher sand prices related to hydraulic fracturing activties in the US unconventional shales
  • expecting an incremental margin rise in North America
  • declining revenues of ~10% in 1Q17 over 4Q16 in the Eastern Hemisphere
  • revenues from Latin America to increase by mid to low single-digit percentages in 1Q17 over 4Q16

Please read more on Halliburton in Market Realist’s Halliburton Stock Faces Headwinds amid a Strong Performance.

We’ll discuss Halliburton’s one-year price movement in the following part.

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