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What’s Up with Halliburton’s Net Debt-to-Equity Ratio?

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HAL’s net debt

On March 31, 2018, Halliburton’s (HAL) net debt was $8.57 billion, 3% lower than its net debt of $8.88 billion on March 31, 2017. On March 31, 2018, HAL’s total debt remained unchanged compared to March 31, 2017, while its cash and marketable securities increased 11% during the same period.

Shareholders’ equity

Halliburton’s shareholders’ equity decreased 7% in Q1 2018 compared to Q1 2017. Read about Halliburton’s Q1 2018 financial results in Market Realist’s Halliburton’s Earnings Drivers in 1Q18.

HAL’s net debt-to-equity ratio

The effect of lower net debt and even lower shareholders’ equity meant that HAL’s net debt-to-equity ratio increased to 1.02x in Q1 2018 compared to 0.98x in Q1 2017. HAL’s net debt-to-equity ratio mostly held steady in the five quarters leading up to Q1 2018. 

HAL makes up 9.9% 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 has risen 5% compared to HAL’s 7.9% rise.

Net debt-to-equity ratios of HAL’s peers

The net debt-to-equity ratio of National Oilwell Varco (NOV), HAL’s oilfield services industry peer, was 0.10x on March 31. TechnipFMC’s (FTI) net debt-to-equity ratio was -0.18x, while Core Laboratories’ (CLB) net debt-to-equity ratio was 0.21x on the same day.

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