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Halliburton tops earnings estimates as oil services margins expand

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Yahoo Finance Live anchors discuss second-quarter earnings for Halliburton.

Video Transcript

- Just a few minutes till the opening bell. Let's take a look at what is moving. We have a lot of earnings besides Johnson & Johnson and IBM that we talked about. Halliburton, one of those companies. The shares are higher about 2% after the oil services giant beat profit and revenue estimates for the second quarter. President and CEO Jeff Miller pointed to pricing gains across all product service lines that supported what he said was significant sequential margin expansion in the second quarter.

Halliburton has also been taking market share, it looks like. As we have seen business move out of Russia, there are a lot more places that need oil services as we see more pumping of oil, as we see the prices go higher. And it seems like Halliburton has been benefiting from that.

- Yeah. In North America and this region, the revenue for the second quarter, $2.4 billion. That was a 26% increase, you compare that to the first quarter of 2022. And the sequential moves are particularly important here as we look through the differing of environment certainly year over year, but even between the first quarter and the second quarter for a company in Halliburton and much of the industry.

And so more broadly here, they're saying the increase primarily driven by increased pressure, pumping services, and artificial lift activity as well in North America land, increased fluid services, wireline activity, the list goes on. But the demand scenario, far different from that even of the first quarter of this year.

- I mean, the bottom line is, fracking is expensive, it's difficult to do. It doesn't make sense when oil prices are lower in demand, it's also lower, right? Now that we've seen oil prices go higher, demand go higher. Halliburton sell in that fracking stuff that it wasn't selling a few years ago.

There was also a headline that caught our eye from the conference call, as reported by Reuters, that the CEO is saying that OPEC spare capacity is at historical lows, the strategic petroleum reserve release is unsustainable, and the risk to Russia's supply remains high. All of that to me sounds like a recipe for continued higher prices, even though, as of late, as we know, thankfully for us, all of us were driving in the US and doing anything really, where we see the trickle down from gas prices, the comedown has been a relief. But it sounds from that headline like it might not last.

- Yeah. My metro card is getting a lot of use these days, not so much on the driving front. But thankfully, at this point, I mean, even internationally here as they were discussing some of their second quarter revenues, they're $2.6 billion, 12% increase. As they mentioned, geographically, increases across the board. And it's really a question of where additional capacity will come online and actually lessen some of the demand for their products and services. But in the near term, that doesn't seem to be the case.

- No, it does not.