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This Is What Affected Halliburton’s 1Q17 Performance


Apr. 26 2017, Updated 2:05 p.m. ET

Performance of Halliburton’s Completion and Production segment

From 1Q16 to 1Q17, revenue for Halliburton’s (HAL) Completion and Production (or C&P) segment rose 12.0%. The segment improved a phenomenal 3.9x in operating income in 1Q17 over 1Q16, primarily due to better pricing in its US onshore pressure pumping business. Halliburton makes up 0.19% of the iShares S&P 500 Value (IVE).

On a quarter-over-quarter basis, the C&P segment registered a 15.0% rise in revenue due to increased drilling activity and higher utilization in North America onshore. However, a seasonal fall in completion tool sales across the Eastern Hemisphere partially offset the segment’s growth.

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Performance of Halliburton’s Drilling and Evaluation segment

From 1Q16 to 1Q17, revenue for Halliburton’s Drilling and Evaluation (or D&E) segment fell ~11.0%. The segment’s operating income also fell a huge 49.0% in 1Q17 over 1Q16. That was primarily due to lower software sales, lower pricing, and fewer fluid sales in the Middle East.

On a quarter-over-quarter basis, the D&E segment registered a 4.0% fall in revenue. Improved fluid sales and higher project management activity in Mexico partially offset the negative factors affecting the segment.

HAL makes up 0.20% of the SPDR S&P 500 ETF (SPY). SPY tracks the price and yield performances of the S&P 500 Index (SPX-INDEX), which tracks 500 top companies. The energy sector makes up 6.6% of SPX-INDEX. The index rose 14.0% in the past year compared to a 17.0% rise in HAL stock.

Positives in Halliburton’s performance

Let’s look now at what’s positive about Halliburton’s performance:

  • strong US onshore operations leading to higher pressure pumping and well construction product sales
  • higher revenue from Latin America due primarily to increased activity in well completion and fluid services

Negatives in Halliburton’s performance

Now let’s see what’s negative about Halliburton’s performance:

  • reduced pricing and lower activity in the Middle East and Asia
  • fall in revenue from Europe, Africa, and CIS (Commonwealth of Independent States)

In the next part of this series, we’ll look at Halliburton’s returns.


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