Halliburton Company ((HAL)) has held its Q1 earnings call. Read on for the main highlights of the call.
Halliburton’s recent earnings call painted a picture of mixed sentiments. On one hand, the company celebrated strong international contract wins and technological advancements, particularly with its Zeus IQ platform. On the other hand, challenges in North America, especially in Mexico, and the broader global trade environment, including tariffs, posed significant hurdles. Despite these challenges, Halliburton remains steadfast in its commitment to returning value to shareholders.
Solid International Contract Wins
Halliburton has secured significant contracts in international markets, working with major players like Shell in Brazil, Suriname, and West Africa. These contracts underscore the company’s technological prowess and its collaborative approach, positioning it well in the global market.
Strong Performance in Growth Engines
The company’s growth engines, which include unconventional, artificial lift, intervention, and directional drilling, have shown promising results. Noteworthy achievements include the mobilization of Zeus equipment to the Middle East and the acquisition of Optime Subsea, which are expected to bolster Halliburton’s market position.
Zeus IQ Technological Advancement
A major highlight was the successful deployment of the Zeus IQ closed-loop autonomous fracturing operation. This technological milestone is set to enhance productivity and asset performance, marking a significant step forward for Halliburton.
Commitment to Shareholder Returns
Halliburton is on track to return at least $1.6 billion to shareholders through buybacks and dividends by 2025. This commitment to shareholder returns is a testament to the company’s confidence in its financial health and future prospects.
Decline in North America Revenue
The earnings call revealed a 12% year-over-year decline in North America revenue, attributed to lower stimulation activity and decreased completion tool sales. This decline highlights the challenges faced in the region.
Significant Challenges in Mexico
International revenue decreased by 2% year-over-year, primarily due to a 19% decline in Latin America revenue driven by lower activity in Mexico. This underscores the regional challenges impacting Halliburton’s overall performance.
Impact of Trade Environment and Tariffs
The dynamic trade environment and tariffs have introduced uncertainty into the markets, affecting commodity prices. Halliburton projected a $0.02 to $0.03 per share impact in the second quarter due to these factors.
Decrease in Completion and Production Division Revenue
The Completion and Production division experienced an 8% decrease in revenue and a 23% decrease in operating income compared to Q1 2024. This decline reflects the broader challenges in the sector.
Forward-Looking Guidance
Looking ahead, Halliburton reported a total company revenue of $5.4 billion for the first quarter of 2025, with an adjusted operating margin of 14.5%. While international revenue saw a slight decrease, excluding Mexico, it grew by mid-single digits. The company anticipates robust international tender activity leading to significant contract awards through 2026. Halliburton expects solid free cash flow in 2025 and plans to return at least $1.6 billion to shareholders.
In summary, Halliburton’s earnings call reflects a company navigating through a complex landscape of international successes and regional challenges. While technological advancements and international contracts provide optimism, North American struggles and global trade uncertainties pose significant hurdles. Nonetheless, Halliburton’s commitment to shareholder returns and strategic growth initiatives offer a balanced outlook for the future.