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Key Takeaways From Halliburton's 4th-Quarter Results

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GuruFocus.com
·3 min read
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- By Mayank Marwah

Halliburton Co. (NYSE:HAL) released its fourth-quarter financial results before the opening bell on Jan. 19.

The world's second-largest oilfield services provider recorded earnings and revenue beats courtesy of recovery in demand for oil. Additionally, earnings benefitted from cost cuts.

By the numbers


The Houston-based company reported adjusted earnings of 18 cents per share, topping analysts' estimates of 15 cents. The company recorded a net loss of $235 million, translating to a GAAP loss of 27 cents per share. That compares with a net loss of $1.65 billion, or $1.88 per share, recorded in the prior-year period.

The company booked fourth-quarter revenue of $3.24 billion, down 38% on a year-over-year basis. Analysts had expected revenue to be $3.21 billion.

Segment performance

In the completion and production segment, Halliburton recorded a revenue growth of 15% sequentially to $1.8 billion, on the back of high completion tool sales in Europe, Africa, the Gulf of Mexico and Latin America. In addition, higher simulation activity and artificial lift sales in North America propelled sales. This was partially offset by lower pressure pumping activity in Saudi Arabia and lower completion tool sales in Eurasia and Australia.

Drilling and evaluation contributed $1.4 billion in consolidated revenue, which surged 2% when compared with the previous quarter. The growth was primarily driven by higher services related to drilling and wireline in North America and the Eastern Hemisphere. This was partially offset by reduced drilling activity in Europe, the Middle East and Mexico.

Revenue in North America stood at $1.2 billion, up 26% sequentially. The company's worldwide revenue was approximately $2 billion, which was flat as compared to the third quarter. In a statement, President and CEO Jeff Miller said:


"I am optimistic about the activity momentum I see in North America, and expect international activity to bottom in the first quarter of this year. I am also encouraged by the growing pipeline of international customer opportunities and the unfolding global activity recovery. I believe our strategic priorities will allow us to continue generating industry-leading returns and strong free cash flow and solidify Halliburton's role in the unfolding energy market recovery."



Key developments

Halliburton recently rolled out SmartFleet, which is its first intelligent programmed fracturing system. SmartFleet persistently measures cluster uniformity as well as fracture geometry by connecting to the reservoir through underground sensing. The operator of SmartFleet gets a real-time fracture control while pumping by assimilating subsurface fracture measurements, live 3-D visualization and synchronized fracture decision-making and commands, which is unlike any other fracturing fleet. Michael Segura, vice president of Product Enhancement, said:


"The SmartFleet system is the first of its kind, giving operators the ability to see and control how they land their fracs. SmartFleet represents a step-change towards intelligent fracturing that gives operators the ability to optimize fracture outcomes while pumping, allowing them to drive capital efficiency and asset performance."



Guidance

The company did not provide any guidance figures for earnings and revenue.

Disclosure: I do not hold any positions in the stocks mentioned.

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This article first appeared on GuruFocus.