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Halliburton (HAL) Q3 Earnings Beat on Increased Activity
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Halliburton Company (HAL - Free Report) reported third-quarter 2022 adjusted net income per share of 60 cents, surpassing the Zacks Consensus Estimate of 56 cents and improving from the year-ago profit of 28 cents. The outperformance reflects stronger-than-expected profit from both its divisions and came in spite of the company’s exit from Russia.
Revenues of $5.4 billion were 38.8% higher than the corresponding period of 2021 and above the Zacks Consensus Estimate of $5.3 billion. North American revenues rose 63.2% year over year to $2.6 billion, while revenues from Halliburton’s international operations were up 21.2% from the year-ago period to $2.7 billion. Investors should know that HAL has outsized exposure to the North American land drilling market.
Inside Halliburton’s Segments
Operating income from the Completion and Production segment was $583 million, 81.1% above the year-ago level of $322 million and ahead of the Zacks Consensus Estimate of $536 million. The division’s performance was buoyed by improving completion tool sales in Middle East/Asia, to go with the strength in the pressure pumping business in North America onshore.
Drilling and Evaluation unit profit surged from $186 million in the third quarter of 2021 to $325 million in the corresponding period of 2022. The division also managed to beat the Zacks Consensus Estimate of $308 million. This was primarily due to a pickup in drilling-associated services in the Western Hemisphere and Middle East/Asia, as well as increased project management activity and wireline services overseas.
Halliburton Company Price, Consensus and EPS Surprise
Halliburton reported third-quarter capital expenditure of $251 million. As of Sep 30, 2022, the company had approximately $2 billion in cash/cash equivalents and $7.9 billion in long-term debt, representing a debt-to-capitalization ratio of 50.9.
Management Remarks & Outlook
Halliburton — the world’s biggest provider of hydraulic fracking — noted that the strong third-quarter performance is a thumbs-up to its strategic priorities in North America as well as international markets.
Looking ahead, Halliburton expects international activity to gain momentum throughout the globe. The company’s state-of-the-art portfolio, selective contract wins and balanced geographic mix will help it maximize profit from this upcycle. As far as North America is concerned, HAL sees continued revenue growth in a tight market.
Overall, Halliburton believes that its smart strategy, digital leadership, capital efficiency, and the global presence points to a rosy outlook. The Houston-based company’s cash flow generation capabilities and balance sheet strength should also ensure increased shareholder returns.
Zacks Rank & Key Picks
Halliburton currently carries a Zacks Rank #2 (Buy).
Apart from HAL, investors interested in the energy sector might look at Murphy USA (MUSA - Free Report) , Comstock Resources (CRK - Free Report) and HF Sinclair (DINO - Free Report) . Each of the companies sports a Zacks Rank #1 (Strong Buy).
Murphy USA: Murphy USA is valued at some $6.9 billion. The Zacks Consensus Estimate for MUSA’s 2022 earnings has been revised 18.3% upward over the past 60 days.
Murphy USA, headquartered in El Dorado, AR, delivered a 40.8% beat in Q2. MUSA shares have gained 67.3% in a year.
Comstock Resources: Comstock Resources is valued at some $3.9 billion. The Zacks Consensus Estimate for CRK’s 2022 earnings has been revised 15% upward over the past 60 days.
Comstock Resources, headquartered in Frisco, TX, delivered a 7.5% beat in Q2. CRK shares have gained 57.5% in a year.
HF Sinclair: DINO beat the Zacks Consensus Estimate for earnings in three of the last four quarters. HF Sinclair has a trailing four-quarter earnings surprise of roughly 710.1%, on average.
DINO is valued at around $12.8 billion. HF Sinclair has seen its shares gain around 58.5% in a year.
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Halliburton (HAL) Q3 Earnings Beat on Increased Activity
Halliburton Company (HAL - Free Report) reported third-quarter 2022 adjusted net income per share of 60 cents, surpassing the Zacks Consensus Estimate of 56 cents and improving from the year-ago profit of 28 cents. The outperformance reflects stronger-than-expected profit from both its divisions and came in spite of the company’s exit from Russia.
Revenues of $5.4 billion were 38.8% higher than the corresponding period of 2021 and above the Zacks Consensus Estimate of $5.3 billion. North American revenues rose 63.2% year over year to $2.6 billion, while revenues from Halliburton’s international operations were up 21.2% from the year-ago period to $2.7 billion. Investors should know that HAL has outsized exposure to the North American land drilling market.
Inside Halliburton’s Segments
Operating income from the Completion and Production segment was $583 million, 81.1% above the year-ago level of $322 million and ahead of the Zacks Consensus Estimate of $536 million. The division’s performance was buoyed by improving completion tool sales in Middle East/Asia, to go with the strength in the pressure pumping business in North America onshore.
Drilling and Evaluation unit profit surged from $186 million in the third quarter of 2021 to $325 million in the corresponding period of 2022. The division also managed to beat the Zacks Consensus Estimate of $308 million. This was primarily due to a pickup in drilling-associated services in the Western Hemisphere and Middle East/Asia, as well as increased project management activity and wireline services overseas.
Halliburton Company Price, Consensus and EPS Surprise
Halliburton Company price-consensus-eps-surprise-chart | Halliburton Company Quote
Balance Sheet
Halliburton reported third-quarter capital expenditure of $251 million. As of Sep 30, 2022, the company had approximately $2 billion in cash/cash equivalents and $7.9 billion in long-term debt, representing a debt-to-capitalization ratio of 50.9.
Management Remarks & Outlook
Halliburton — the world’s biggest provider of hydraulic fracking — noted that the strong third-quarter performance is a thumbs-up to its strategic priorities in North America as well as international markets.
Looking ahead, Halliburton expects international activity to gain momentum throughout the globe. The company’s state-of-the-art portfolio, selective contract wins and balanced geographic mix will help it maximize profit from this upcycle. As far as North America is concerned, HAL sees continued revenue growth in a tight market.
Overall, Halliburton believes that its smart strategy, digital leadership, capital efficiency, and the global presence points to a rosy outlook. The Houston-based company’s cash flow generation capabilities and balance sheet strength should also ensure increased shareholder returns.
Zacks Rank & Key Picks
Halliburton currently carries a Zacks Rank #2 (Buy).
Apart from HAL, investors interested in the energy sector might look at Murphy USA (MUSA - Free Report) , Comstock Resources (CRK - Free Report) and HF Sinclair (DINO - Free Report) . Each of the companies sports a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA: Murphy USA is valued at some $6.9 billion. The Zacks Consensus Estimate for MUSA’s 2022 earnings has been revised 18.3% upward over the past 60 days.
Murphy USA, headquartered in El Dorado, AR, delivered a 40.8% beat in Q2. MUSA shares have gained 67.3% in a year.
Comstock Resources: Comstock Resources is valued at some $3.9 billion. The Zacks Consensus Estimate for CRK’s 2022 earnings has been revised 15% upward over the past 60 days.
Comstock Resources, headquartered in Frisco, TX, delivered a 7.5% beat in Q2. CRK shares have gained 57.5% in a year.
HF Sinclair: DINO beat the Zacks Consensus Estimate for earnings in three of the last four quarters. HF Sinclair has a trailing four-quarter earnings surprise of roughly 710.1%, on average.
DINO is valued at around $12.8 billion. HF Sinclair has seen its shares gain around 58.5% in a year.