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What Are Halliburton’s Estimates for 1Q18 and Beyond?

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Halliburton’s challenges in the international market

Despite an improvement in the international upstream market scenario, Halliburton (HAL) may continue to face challenges in the international market. Jeff Miller, HAL’s CEO, said during the 4Q17 earnings conference call, “While we expect activity to gradually improve throughout the year, an overcapitalized market, pricing pressure and concessions that have been given throughout the cycle, need to unwind. As a result, I believe the market will improve this year, but the recovery will be choppy.”

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HAL makes up 11.0% of the iShares US Oil Equipment & Services ETF (IEZ). IEZ tracks an index composed of US equities in the oil equipment and services sector. In the past year, IEZ decreased 12% compared to a 4% rise in HAL’s stock price during the same period. Read more on Halliburton in Market Realist’s Could Moderation in US Markets Affect Halliburton in 1Q18?

Factors driving Halliburton in 2018

  • Use of technology will likely help reduce cost and increase efficiency and production. For example, the application of big data or analytics optimizes operations to reduce downtime, minimize maintenance, and compare the efficiency of completion designs.
  • Halliburton’s prices for its offerings may improve in 2018 due to improving oil price and the resulting demand for equipment from upstream producers.
  • Equipment utilization may improve for the upstream producers as upstream activity increases. This is a positive for the oilfield equipment and service providers.

Next, we’ll discuss Halliburton’s revenue and earnings in 4Q17.

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