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Which Oilfield Service Major Achieved Earnings Progress in 2017?

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Dec. 4 2020, Updated 10:52 a.m. ET

Halliburton’s lower net loss

Halliburton (HAL) recorded a net loss of ~$463 million in 2017—a sharp improvement compared to a net loss of $5.73 billion in 2016. Halliburton’s operating income improved significantly compared to 2016 due to increased stimulation activity and well completion services in North America. Halliburton’s 2017 bottom line was impacted by lower impairments and other charges of $647 million—compared to charges of $3.4 billion in 2016. Halliburton incurred a $4.1 billion charge in 2016 due to the merger termination payment to Baker Hughes.

Halliburton accounts for 11.4% of the iShares U.S. Oil Equipment & Services ETF (IEZ). IEZ declined 24%, while Halliburton decreased 14% in the past year. To learn more, read Halliburton: A Post-2017 Analysis.

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National Oilwell Varco’s net loss

In 2017, National Oilwell Varco’s (NOV) reported net loss was ~$237 million. So, National Oilwell Varco cut its losses remarkably compared to 2016 when it reported a net loss of $2.41 billion. The significantly higher adjusted EBITDA in the Wellbore Technologies segment and the Completion and Production Solutions segment helped lower the net loss in 2017. In addition to the improved business outlook led by a recovery in crude oil prices and higher onshore activity in North America, National Oilwell Varco benefited from a total of $3.0 billion in cost reductions from operation rationalization in the past three years.

Schlumberger’s earnings made some progress

In 2017, Schlumberger (SLB) reported a net loss of $1.59 billion—a mild improvement compared to 2016 when it recorded a net loss of nearly $1.62 billion. Improved profitability in North America due to onshore activity growth was somewhat offset by margin declines in the Reservoir Characterization and Cameron segments.

During 2017, Schlumberger recorded impairment and other charges of $3.2 billion and $308 million in merger and integration-related charges. The charges reduced Schlumberger’s net income in 2017. In 2016, Schlumberger incurred significant non-recurring charges of $3.8 billion.

Baker Hughes reported a net loss

In 2017, Baker Hughes, a GE company (BHGE), reported a net loss of $242 million on a combined and consolidated basis. In 2016, the net income was $334 million. GE’s (GE) oil and gas business merger with Baker Hughes was completed on July 3, 2017. In 2017, the acquisition of Baker Hughes added $309 million in segment operating income, which was more than offset by the organic impact of lower productivity and pricing pressure. In particular, continued volume pressure and lower pricing had a negative impact on Baker Hughes’s Oilfield Equipment segment and Turbomachinery and Process Solutions segment in 2017.

Next, we’ll analyze the companies’ revenues from the US and the US rig count.

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