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01/10 15:44
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Total Company Revenue $5.4 billion, a decrease of 7% year-over-year.
Adjusted Operating Margin 14.5%, no year-over-year change mentioned.
International Revenue $3.2 billion, a decrease of 2% year-over-year due to lower activity in Mexico.
North America Revenue $2.2 billion, a decrease of 12% year-over-year due to lower stimulation activity in U.S. land and decreased completion tool sales in the Gulf of America.
Cash Flow from Operations $377 million, no year-over-year change mentioned.
Free Cash Flow $124 million, no year-over-year change mentioned.
Net Income per Diluted Share $0.24, no year-over-year change mentioned.
Adjusted Net Income per Diluted Share $0.60, no year-over-year change mentioned.
Completion and Production Division Revenue $3.1 billion, a decrease of 8% year-over-year due to decreased pressure pumping activity and lower completion tool sales in the western hemisphere.
Drilling and Evaluation Division Revenue $2.3 billion, a decrease of 6% year-over-year due to decreased activity in Mexico and Saudi Arabia.
Capital Expenditures $302 million, expected to be about 6% of revenue for the full year 2025.
Corporate and Other Expense $66 million, expected to be about flat in Q2.
Net Interest Expense $86 million, expected to increase by about $5 million in Q2.
Other Net Expense $39 million, expected to increase by about $5 million in Q2.
Normalized Effective Tax Rate 22.1%, expected to be approximately 23% in Q2.
Zeus IQ Technology: Achieved a significant milestone with the successful completion of the first closed loop autonomous fracturing operation in the world, utilizing real-time feedback from the reservoir.
Optime Subsea Acquisition: Closed the acquisition of Optime Subsea, a technology expected to transform deep water interventions.
Zeus Equipment Mobilization: Mobilized Zeus equipment to the Middle East, with trials expected in the near term.
International Revenue Growth: International revenue was $3.2 billion, with a decrease of 2% year-over-year due to lower activity in Mexico, but excluding Mexico, revenues grew by mid single digits.
Contract Awards: Halliburton won significant contracts including development and intervention work for Gato do Mato in Brazil and exploration work in Suriname and West Africa.
North America Revenue: North America revenue was $2.2 billion, a 12% decrease year-over-year, but the company expects to outperform the North America services market.
Cash Flow Generation: Generated $377 million of cash flow from operations and $124 million of free cash flow.
Stock Repurchase: Repurchased approximately $250 million of common stock.
Capital Expenditures: Capital expenditures for Q1 were $302 million, with expectations of about 6% of revenue for the full year.
Focus on Technology and Collaboration: Consistent focus on technology development, collaboration, and service quality execution is expected to create value for customers and drive long-term success.
Market Positioning Strategy: Strategy to maximize value in North America remains unchanged, focusing on returns rather than market share.
Market Uncertainty: The trade environment has injected uncertainty into markets, raising broad economic concerns and impacting commodity prices.
International Revenue Risks: There is more risk embedded in the outlook for international revenue, with expectations of flat to slightly down year-over-year revenue.
North America Activity Reductions: Customers are evaluating their activity scenarios for 2025, which could lead to higher than normal white space for committed fleets and potential retirement or export of fleets.
Severance and Impairment Costs: A pre-tax charge of $356 million was recognized due to severance costs, impairment of assets, and legacy environmental reserves.
Supply Chain Challenges: The ongoing trade situation is being monitored closely, with an estimated impact of $0.02 to $0.03 per share in Q2.
Regulatory and Economic Factors: The macro environment for oil and gas is dynamic, with OPEC production returns affecting commodity prices and overall market conditions.
International Revenue Outlook: Expect year-over-year international revenue to be flat to slightly down due to increased market risks.
Contract Awards: Significant contracts awarded, including work with Shell in Brazil and Suriname, enhancing visibility and confidence for future revenue.
Growth Engines: Expect unconventional, artificial lift, intervention, and directional drilling to grow faster than other business segments.
Technology Development: Successful deployment of Zeus IQ technology, expected to enhance productivity and production.
Acquisition: Acquisition of Optime Subsea to transform deep water interventions.
Q2 Revenue Guidance: Completion and production division revenue expected to increase 1% to 3%; drilling and evaluation division revenue expected to be flat to down 2%.
Capital Expenditures: Expected to be about 6% of revenue for the full year 2025.
Free Cash Flow: Expected to generate solid free cash flow in 2025, with at least $1.6 billion returned to shareholders through buybacks and dividends.
Q2 Effective Tax Rate: Expected to be approximately 23% based on geographic earnings mix.
Impact of Trade Situation: Initial estimates for Q2 impact of trade situation are about $0.02 to $0.03 per share.
Share Repurchase: During the first quarter, Halliburton repurchased approximately $250 million of its common stock.
Shareholder Return Plan: Halliburton expects to return at least $1.6 billion of cash to shareholders through buybacks and dividends in 2025.
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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