How Halliburton’s Segments Performed in the Second Quarter

From Q2 2017 to Q2 2018, Halliburton’s (HAL) Completion and Production (or C&P) segment revenue rose ~33%. The C&P segment accounted for 68% of HAL’s Q2 revenues. Operating-income-wise, the C&P segment jumped 69% in Q2 2018 over Q2 2017. The rise was on account of increased pressure pumping activity and higher completion tool sales from some of HAL’s international operations. The C&P segment revenue increased 34% in the second quarter over the first quarter.

From Q2 2017 to Q2 2018, the Drilling and Evaluation (or D&E) segment revenue increased ~8.7%. Increased drilling activity and increased software sales in Mexico resulted in the revenue rise in Q2 2018. On a year-over-year basis, the D&E segment’s operating income grew 53% in Q2 2018. The D&E segment accounted for 32% of HAL’s Q2 revenues.

However, the D&E segment revenue growth of 2% was muted quarter-over-quarter in Q2 2018, which was primarily from reduced drilling fluid activity in the Gulf of Mexico.

In Q2 2018, Halliburton generated 62.4% of its revenues from North America. The Middle East was the second highest revenue contributor for HAL, accounting for 18% of its Q2 revenues. In comparison, Schlumberger (SLB) generated 38% of its revenues from North America in the second quarter. Weatherford International (WFT), which plans to release its Q2 2018 financial results on July 27, generated ~33% of its Q1 2018 revenues from the US and Canada.

Next, we’ll discuss Halliburton’s returns.