We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
HAL & SLB: Comparative Financial Analysis of Q2 Earnings
Read MoreHide Full Article
Halliburton (HAL - Free Report) and SLB (SLB - Free Report) are two of the biggest names in the oilfield service space, and both came up with their second-quarter 2024 results on Friday, Jul 19. Let’s do a comparative analysis of the Zacks Rank #4 (Sell) companies’ reported numbers.
Halliburton reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets. Meanwhile, revenues of $5.8 billion were $35 million higher than the corresponding period of 2023 but missed the Zacks Consensus Estimate of $6 billion due to weak performance in the North American region.
Meanwhile, larger rival SLB came out with adjusted earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 83 cents. The bottom line increased from the year-ago quarter’s level of 72 cents. The oilfield service giant recorded total quarterly revenues of $9.1 billion, which beat the Zacks Consensus Estimate by $73 million. The top line also improved from the year-ago quarter’s figure of $8.1 billion. The strong quarterly results were primarily driven by broad-based international revenue growth and margin expansion.
North America
Halliburton’s North American revenues dropped 8% year over year to $2.5 billion, which also failed to meet our projection of $2.6 billion as rig counts and overall service activity fell. However, the company highlighted increased cementing activity and robust demand for its stimulation and artificial lift services in the region.
SLB’s North American revenues were down some 6% at $1.6 billion. The company noted softness in U.S. land drilling, somewhat offset by strength in offshore activities and improved service pricing.
International
Revenues from Halliburton’s international operations were up 8.1% from the year-ago period to $3.4 billion and surpassed our estimate by $42.5 billion, driven by robust growth in the Middle East, Asia and Latin America. The company saw increased demand for drilling and evaluation services, particularly in Saudi Arabia and Argentina.
SLB's international operations performed well, with revenues improving around 18% to $7.5 billion. The key growth regions included the Middle East, Asia and Latin America. The company benefited from higher activity levels and improved pricing in these regions.
Balance Sheet & Shareholder Return Initiatives
Halliburton reported second-quarter capital expenditure of $347 million, higher than our projection of $303 million. As of Jun 30, 2024, the company had approximately $2.1 billion in cash/cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock during the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to free cash flow of $793 million.
SLB reported a free cash flow of $776 million in the second quarter. At the end of June, the company had approximately $4 billion in cash and short-term investments. It registered a long-term debt of $12.2 billion at the end of the quarter, translating into a debt-to-capitalization of 35.3%. The company executed $465 million in share buybacks and spent $463 million by way of capital expenditure.
Guidance and Outlook
As per HAL, its international business is experiencing solid demand amid high activity levels and equipment tightness across all major basins. The company believes that its service quality, sound strategy, depth of offerings and technological leadership will stand it in good stead for the future.
Like Halliburton, SLB, too, sees solid momentum in the international markets during the second half of the year. It reaffirmed its previous guidance of mid-teens EBITDA growth for the full year. The anticipated capital investment for 2024 is $2.6 billion, in line with the previous year’s reported numbers.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
HAL & SLB: Comparative Financial Analysis of Q2 Earnings
Halliburton (HAL - Free Report) and SLB (SLB - Free Report) are two of the biggest names in the oilfield service space, and both came up with their second-quarter 2024 results on Friday, Jul 19. Let’s do a comparative analysis of the Zacks Rank #4 (Sell) companies’ reported numbers.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings & Revenues
Halliburton reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets. Meanwhile, revenues of $5.8 billion were $35 million higher than the corresponding period of 2023 but missed the Zacks Consensus Estimate of $6 billion due to weak performance in the North American region.
Meanwhile, larger rival SLB came out with adjusted earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 83 cents. The bottom line increased from the year-ago quarter’s level of 72 cents. The oilfield service giant recorded total quarterly revenues of $9.1 billion, which beat the Zacks Consensus Estimate by $73 million. The top line also improved from the year-ago quarter’s figure of $8.1 billion. The strong quarterly results were primarily driven by broad-based international revenue growth and margin expansion.
North America
Halliburton’s North American revenues dropped 8% year over year to $2.5 billion, which also failed to meet our projection of $2.6 billion as rig counts and overall service activity fell. However, the company highlighted increased cementing activity and robust demand for its stimulation and artificial lift services in the region.
SLB’s North American revenues were down some 6% at $1.6 billion. The company noted softness in U.S. land drilling, somewhat offset by strength in offshore activities and improved service pricing.
International
Revenues from Halliburton’s international operations were up 8.1% from the year-ago period to $3.4 billion and surpassed our estimate by $42.5 billion, driven by robust growth in the Middle East, Asia and Latin America. The company saw increased demand for drilling and evaluation services, particularly in Saudi Arabia and Argentina.
SLB's international operations performed well, with revenues improving around 18% to $7.5 billion. The key growth regions included the Middle East, Asia and Latin America. The company benefited from higher activity levels and improved pricing in these regions.
Balance Sheet & Shareholder Return Initiatives
Halliburton reported second-quarter capital expenditure of $347 million, higher than our projection of $303 million. As of Jun 30, 2024, the company had approximately $2.1 billion in cash/cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock during the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to free cash flow of $793 million.
SLB reported a free cash flow of $776 million in the second quarter. At the end of June, the company had approximately $4 billion in cash and short-term investments. It registered a long-term debt of $12.2 billion at the end of the quarter, translating into a debt-to-capitalization of 35.3%. The company executed $465 million in share buybacks and spent $463 million by way of capital expenditure.
Guidance and Outlook
As per HAL, its international business is experiencing solid demand amid high activity levels and equipment tightness across all major basins. The company believes that its service quality, sound strategy, depth of offerings and technological leadership will stand it in good stead for the future.
Like Halliburton, SLB, too, sees solid momentum in the international markets during the second half of the year. It reaffirmed its previous guidance of mid-teens EBITDA growth for the full year. The anticipated capital investment for 2024 is $2.6 billion, in line with the previous year’s reported numbers.