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Analyzing Halliburton’s Q4 Earnings

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Nov. 20 2020, Updated 5:24 p.m. ET

Halliburton’s results

Halliburton (HAL) reported its fourth-quarter results on January 22. The company’s EPS fell to $0.41 from $0.53 per share in the fourth quarter of 2017. Halliburton’s EPS beat analysts’ consensus estimates in the fourth quarter. Halliburton’s EPS also beat the estimate of $0.37–$0.40 per share that the company provided in October.

Halliburton’s fourth-quarter EPS fell 23% YoY (year-over-year) and 18% sequentially. For fiscal 2018, Halliburton’s EPS was $1.9—higher than $1.22 for 2017. Halliburton’s fourth-quarter revenues were roughly flat YoY. The above graph shows Halliburton’s EPS over the last three years.

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What impacted Halliburton’s earnings?

Softness in the completions activity in North America impacted Halliburton’s fourth-quarter performance. Jeff Miller, Halliburton’s chairman, president, and CEO, said, “As expected, in North America, the demand for completion services decreased during the fourth quarter, leading to lower pricing for hydraulic fracturing services.”

Halliburton’s North America revenues in the fourth quarter fell 11% sequentially. In comparison, the company’s international revenues rose 7% sequentially. We’ll discuss Halliburton’s segmental performance in the next part of this series. For fiscal 2018, Halliburton’s revenues grew 16% compared to 2017.

Outlook for 2019

Halliburton expects the pricing pressure on its offerings to continue in the first quarter. The company expects the pricing to improve in the second half of 2019. In response to the current market environment, Halliburton announced that it plans to cut its 2019 capital spending by ~20% to $1.6 billion.

Softness in the North America activity impacted Schlumberger’s (SLB) fourth-quarter performance as well. To learn more, read Schlumberger’s Fourth-Quarter Earnings Fell 22%.

Baker Hughes (BHGE) is expected to report its earnings on January 31. National Oilwell Varco (NOV) is scheduled to report its results on February 6.

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