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Halliburton’s Estimates for 4Q17 and Beyond

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Halliburton’s estimates for the energy market

According to Halliburton’s (HAL) management, the energy price will remain range-bound in the medium term. In the 3Q17 conference call, Jeffrey Allen Miller, Halliburton’s CEO, said, “In recent days, commodity prices have experienced the modest rebound, as we have seen some signs of tightening in the macro supply-demand picture. However, I still believe that the oil and gas industry will largely remain in a range-bound commodity price environment in the near to medium term. I am confident that Halliburton has the right strategy. In this environment, we’re focused on returns and capital discipline.”

Halliburton accounts for 11.1% of the iShares US Oil Equipment & Services (IEZ). Since September 29, 2017, IEZ has risen 8%—compared to a 12% rise in Halliburton’s stock price during the same period. Read Could Moderation in US Markets Affect Halliburton in 4Q17? to learn more.

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Halliburton’s international outlook

Halliburton’s management also thinks that lower activity in its international operations led to lower prices for Halliburton’s products and services. It could have a negative impact on Halliburton by lowering its margin. In the 3Q17 conference call, Miller said, “Outside North America, our more conservative outlook for the last several quarters is proving accurate. Our customers around the world have different breakeven thresholds and production requirements that all face the headwinds of the current commodity price environment. Due to lower cash flow and project economics, they are more focused than ever on lowering costs. The result of this combination is less activity and more pricing pressure.”

Next, we’ll discuss Halliburton’s revenue and earnings in 3Q17.

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