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It has been about a month since the last earnings report for Halliburton (HAL). Shares have lost about 3.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Halliburton due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Halliburton Reports In-Line Q4 Earnings
Halliburton reported fourth-quarter 2024 adjusted net income per share of 70 cents, the same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers reflect softer activity in the North American region, partly offset by improved fluid work in the Gulf of Mexico.
Meanwhile, revenues of $5.6 billion were 2.2% lower year over year and missed the Zacks Consensus Estimate by $31 million.
Inside Halliburton’s Regions & Segments
North American revenues fell 8.7% year over year to $2.2 billion and missed our projection by 1.1%. On the other hand, revenues from Halliburton’s international operations increased $81 million from the year-ago period to $3.4 billion but failed to surpass our estimate by some $11 million.
The Completion and Production segment earned $629 million in operating income, lower than last year’s $716 million but slightly above our estimate of $628 million. The decline was due to reduced stimulation activity in North America and lower pressure pumping services in Latin America. However, this was offset by higher year-end sales of completion tools and increased artificial lift activity in North America and the Middle East, along with better stimulation activity in Africa and the Middle East.
The Drilling and Evaluation unit's profit dropped to $401 million in the fourth quarter of 2024 from $420 million in the same period in 2023 and fell short of our estimate of $417.5 million. The decline was caused by reduced drilling services in the Middle East and Latin America, along with lower wireline activity globally. On the positive side, the unit benefited from better fluid services in the Middle East and Europe/Africa, increased drilling services in the North Sea, and stronger international software sales.
Balance Sheet
Halliburton reported fourth-quarter capital expenditure of $426 million, higher than our projection of $450.2 million. As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. HAL bought back $309 million worth of its stock during the October-December period. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion.