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Halliburton Beats Q3 Estimates but Falls on Lower Q4 Guidance

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HAL’s third-quarter earnings

Halliburton (HAL) reported its third-quarter earnings results on October 22. The company reported EPS of $0.50, which beat analysts’ consensus estimate of $0.49.

Halliburton’s EPS fell 14% sequentially and rose 19% year-over-year in the quarter. Its reported revenue of $6.172 billion beat analysts’ consensus estimate of $6.133 billion. The company’s revenue was nearly flat sequentially. Its stock closed at a fall of ~3% on the day of its earnings release.

Halliburton stock has fallen ~27% so far in 2018. The company announced its expectations of lower third-quarter earnings during its second-quarter earnings conference call. The temporary softness in the North American market impacted the company’s performance in the quarter.

“In North America, a combination of offtake capacity constraints and our customers’ budget exhaustion led to less demand than expected for completion services,” said Jeff Miller, the company’s president and CEO.

We’ll take a closer look at the company’s third-quarter performance in the next part of this series.

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Outlook for the fourth quarter and beyond

Halliburton expects its fourth-quarter EPS to be in the range of $0.37–$0.40, which would mean a sequential fall of ~23% from its third-quarter EPS. Continued softness in the North American land market is expected to impact the company’s fourth-quarter performance.

Halliburton sees the negative effects of market softness as temporary, and it expects strong activity in 2019. “I believe that these are temporary issues, and that the catalysts for improving demand for services are clearly visible: supportive commodity pricing, expanding offtake capacity, building well inventory, and reloaded customer budgets,” said Miller.

Schlumberger (SLB) reported its third-quarter earnings results on October 19. To learn more, read International Operations Drive Schlumberger’s Q3 Growth. National Oilwell Varco (NOV) is expected to report its third-quarter earnings results on October 26.

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