Halliburton Q3 Earnings In Line, Revs Miss

Zacks

Major oilfield services provider Halliburton Co. (HAL) reported adjusted earnings per share from continuing operations of 83 cents, in line with the Zacks Consensus Estimate and 23.9% higher from the 67 cents per share reported in the year-ago period. The result was supported by significant operating activities from the international markets.

Halliburton is one of the ‘big 4 oil service companies’ in the world. Among the other three members, Schlumberger Ltd. (SLB) and Baker Hughes Inc. (BHI) have posted above consensus results. The remaining member of the contingent, Weatherford International Ltd. (WFT), is scheduled to report earnings on Nov 5, 2013.

Revenues of $7,472.0 million were 5.1% higher than $7,111.0 million, achieved during the third quarter of 2012. The revenue figure, however, failed to beat the Zacks Consensus Estimate of $7,513.0 million owing to reduced sales in North America.

During the quarter, North America accounted for approximately 51.9% of Halliburton’s total revenue and 54.2% of its operating income.

Segmental Performance

Completion & Production: Revenues for Halliburton’s Completion and Production segment came in at $4,501.0 million, representing a year over year increase of 4.9%. The figure was also up by 3.2% sequentially.

Operating income for the unit came in at $763.0 million, an increase of 29.1% from the year-earlier level. Moreover, the segment’s profit was up 4.2% from the previous quarter.

Impressive cementing works in Russia and Norway along with Mexico’s improved stimulation vessel activities aided the year-over-year results.

Drilling & Evaluation: Revenues from Halliburton’s Drilling and Evaluation business were 5.4% above the third-quarter 2012 level and also improved 0.6% sequentially to $2,971.0 million.

Income in the Drilling and Evaluation unit increased 4.7% from the year-ago period and 8.4% sequentially to $450.0 million.

The year-over-year results were supported by increased margin in Argentina and Mexico along with significant improvement in the drilling activities in Angola and Norway.

Share Repurchase

Halliburton declared that it bought back roughly 68 million common shares during the quarter, for a total consideration of $3.3 billion.

Balance Sheet

Halliburton’s capital expenditure in the third quarter was $679.0 million. As of Sep 30, 2013, the company had approximately $1,491.0 million in cash/cash equivalents and $7,816.0 million in long-term debt, representing a debt-to-capitalization ratio of 37.9%.

Zacks Rank

As of now, Halliburton, carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

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