Halliburton’s Segment-Wise Operating Income in 3Q17



Halliburton’s operating income

Previously, we analyzed Halliburton’s (HAL) revenue. Operating-income wise, The D&E (drilling and evaluation) segment’s operating income rose 19% between 3Q16 and 3Q17, primarily due to activity reduction across HAL’s Asia-Pacific operations. HAL makes up 4.0% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES), which has fallen 29% in the past year. HAL’s stock price has fallen 19%.

Positive drivers for Halliburton

  • increased well completion and pressure pumping activity in Canada
  • higher utilization and better pricing in the US onshore business, which primarily benefited Halliburton’s pressure pumping business
  • increased pressure drilling activity and pumping services in the Eastern Hemisphere
  • increased activity in multiple product service lines in Latin America

Negative drivers for Halliburton

  • decreased activity and pricing across Southeast Asia
  • lower project management activity in Iraq
  • a decline in upstream activity in Angola

Comparison with peers

Whereas Halliburton saw net income of $361 million in 3Q17, Superior Energy Services’ (SPN) 3Q17 net income was -$57 million, National Oilwell Varco’s (NOV) was -$27 million, and Fairmount Santrol’s (FMSA) was $35 million. Next, we’ll take a look at Halliburton’s rig count dependancy.

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