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01/10 18:23
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed outlook: strong contract awards and technology development are positives, but weak Q3 guidance and margin reductions in North America are concerning. International growth in unconventionals and solid shareholder returns are encouraging, yet the lack of specific guidance on key projects and potential risks in North America temper enthusiasm. The Q&A reveals cautious customer behavior and ongoing challenges, suggesting a balanced sentiment with no clear catalyst for significant stock movement.
Total company revenue $5.5 billion, an increase of 2% compared to Q1 2025. The increase was driven by higher drilling-related services globally and seasonal improvement in pressure pumping activity in the Western Hemisphere.
Operating income $727 million, with an operating margin of 13%. This reflects a decrease in operating income in some divisions due to lower pricing for stimulation services in US Land and increased startup and mobilization costs.
Net income per diluted share $0.55. This was not compared year-over-year but reflects the company's performance for Q2 2025.
Cash flow from operations $896 million. This was not compared year-over-year but indicates strong operational cash generation.
Free cash flow $582 million. This was not compared year-over-year but highlights the company's ability to generate cash after capital expenditures.
Completion and Production division revenue $3.2 billion, an increase of 2% compared to Q1 2025. The increase was due to seasonal improvement in pressure pumping activity in the Western Hemisphere.
Completion and Production division operating income $513 million, a decrease of 3% compared to Q1 2025. The decline was primarily driven by lower pricing for stimulation services in US Land.
Drilling and Evaluation division revenue $2.3 billion, an increase of 2% compared to Q1 2025. The increase was due to higher drilling-related services globally.
Drilling and Evaluation division operating income $312 million, a decrease of 11% compared to Q1 2025. The decline was due to seasonal roll-off of software sales and increased startup and mobilization costs.
International revenue $3.3 billion, a 2% sequential growth. Activity increases in Latin America and Europe/Africa were offset by reductions in Saudi Arabia.
North America revenue $2.3 billion, relatively flat compared to Q1 2025. Seasonal improvements in completions were offset by lower service pricing and reduced artificial lift activity.
EarthStar 3DX: Launched a new reservoir mapping technology that provides a 3-dimensional map ahead of the bit while drilling, enhancing drilling efficiency and recovery.
ZEUS IQ: Expanded deployment of ZEUS IQ closed-loop fracturing technology in North America, with up to 1/3 of ZEUS electric fleets expected to operate with ZEUS IQ by year-end.
Sensori fiber optic fracture monitoring: Performed the first service in Argentina, marking a milestone in expanding unconventional technologies outside North America.
International revenue: Achieved $3.3 billion in Q2 revenue, with growth in Latin America and Europe/Africa offset by reductions in Saudi Arabia and Mexico.
North America revenue: Reported $2.3 billion in Q2 revenue, flat compared to Q1, with seasonal improvements offset by lower service pricing and reduced artificial lift activity.
Artificial lift: Secured the largest international ESP contract to date from a Middle East NOC, with international artificial lift revenue expected to grow over 20% this year.
Cost reduction: Plans to reduce variable and fixed cash costs to align with market conditions.
Asset management: Will retire, stack, or reallocate underperforming assets, including North America frac fleets.
Unconventionals: Continued adoption of North America-style development in international markets, with record achievements in Argentina and Australia.
Drilling services: Expanded use of iCruise and LOGIX automation technologies, achieving milestones in Norway and the Middle East.
Production services: Began operations on the largest integrated well intervention contract in Brazil and expanded riserless coiled tubing services in Norway.
Volatile Commodity Markets: The oilfield services market is impacted by trade and tariff uncertainty, geopolitical unrest, and OPEC+ production cuts, leading to volatility in commodity markets.
North America Activity Reductions: Multiple operators are planning significant schedule gaps in the second half of 2025, leading to lower drilling and completion activity, reduced service pricing, and stacking of frac fleets.
International Market Softness: Activity reductions and lower discretionary spending in large markets like Saudi Arabia and Mexico are expected to result in mid-single-digit revenue contraction for 2025.
Cost Pressures: Lower pricing for stimulation services in US Land and increased startup and mobilization costs are impacting operating income margins.
Tariff Impacts: Tariffs negatively impacted the business by $27 million in Q2 and are expected to increase to $35 million in Q3.
Economic Returns Challenges: The company plans to retire or stack underperforming assets, including North America frac fleets, to address economic return challenges.
North America Revenue Outlook: Revenue in the second half of 2025 is expected to decline due to lower drilling and completion activity, reduced service pricing, and the stacking of underperforming frac fleets. Full-year North America revenue is forecasted to decline by low double digits year-over-year.
International Revenue Outlook: International revenue is expected to contract by mid-single digits year-on-year for 2025, primarily due to activity reductions in Saudi Arabia and Mexico. However, growth is anticipated in Brazil, Norway, and offshore frontier basins.
Artificial Lift Revenue Growth: International artificial lift revenue is expected to grow over 20% in 2025, with plans to double the installed base of the Intelevate remote operations and automation platform.
Capital Expenditures: Capital expenditures for the full year 2025 are expected to be about 6% of revenue.
Q3 2025 Segment Revenue and Margin Expectations: Completion and Production division revenue is anticipated to decrease 1% to 3%, with margins declining by 150 to 200 basis points. Drilling and Evaluation division revenue is also expected to decline 1% to 3%, but margins are projected to improve by 125 to 175 basis points.
Market Trends and Strategic Alignment: Demand for advanced technology in unconventionals, production-related services, and complex drilling is expected to grow. Halliburton plans to focus on these areas to deliver industry-leading returns.
Dividend Program: No specific mention of a dividend program or any changes to dividend payouts was made during the call.
Share Repurchase Program: During Q2 2025, Halliburton repurchased approximately $250 million of its common stock as part of its shareholder return strategy.
The earnings call indicates declining revenues in North America and internationally, with reduced margins and activity. Although there is growth in artificial lift and strategic partnerships like VoltaGrid, overall guidance is weak, and management avoided specifics in key areas. The Q&A section highlights market tightness concerns and a flattish outlook for North America, suggesting potential near-term stock pressure.
The earnings call presents a mixed outlook: strong contract awards and technology development are positives, but weak Q3 guidance and margin reductions in North America are concerning. International growth in unconventionals and solid shareholder returns are encouraging, yet the lack of specific guidance on key projects and potential risks in North America temper enthusiasm. The Q&A reveals cautious customer behavior and ongoing challenges, suggesting a balanced sentiment with no clear catalyst for significant stock movement.
The earnings report presents a mixed picture with several negative factors. Financial performance shows a decline in revenue and a flat margin, while international and North America revenues decreased. The Q&A reveals concerns about activity slowdown, unclear recovery timing in Mexico, and tariff impacts. Although there are positive elements like shareholder returns and potential growth in Saudi Arabia, the overall sentiment is negative due to weak financial results, unclear guidance, and challenges in key markets.
The earnings call indicates several negative factors: a 7% YoY revenue decrease, weak North America performance, and ongoing supply chain and tariff challenges. While international growth and shareholder returns provide some positives, unclear guidance on Mexico's recovery and tariff impacts, combined with a decrease in operating margins, outweigh these. The Q&A section reflects cautious sentiment, with management avoiding clear answers on key issues. Given these factors and the absence of a new partnership or strong guidance, the stock is likely to experience a negative movement in the near term.
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