Yahoo Finance Halliburton (HAL) Q1 Earnings Beat on International Strength
Halliburton Company HAL reported first-quarter 2024 adjusted net income per share of 76 cents, surpassing the Zacks Consensus Estimate of 74 cents and improving from the year-ago quarter profit of 72 cents (adjusted). The outperformance reflects strength in the international markets, partly offset by weak performance in the North American region.
Meanwhile, revenues of $5.8 billion were 2.2% higher than the corresponding period of 2023 and above the Zacks Consensus Estimate of $5.7 billion.
Inside Halliburton’s Regions & Segments
North American revenues fell 7.9% year over year to $2.4 billion, which also failed to meet our projection of $2.6 billion. On the other hand, revenues from Halliburton’s international operations were up 11.9% from the year-ago period to $3.3 billion and ahead of our estimate of $3.1 billion.
Operating income from the Completion and Production segment was $688 million, up from the year-ago level of $666 million and above our projection of $660.4 million. The division’s performance was buoyed by improving completion tool sales in the Western Hemisphere and Europe/Africa, better stimulation activity in Latin America, to go with higher artificial lift activity in North America. These factors were partly offset by lower pressure pumping activity in U.S. onshore.
Drilling and Evaluation unit profit improved from $369 million in the first quarter of 2023 to $398 million in the corresponding period of 2024. Our model estimated the figure at $398.8 million. This performance could be attributed to higher drilling-related services in in the Middle East and North America, rising activity levels across Latin America product lines plus a pickup in fluid services in Europe. Partly offsetting these positives were the decline in Asia fluid services, a dip in project management work in the Middle East/Asia, and reduced wireline activity in North America.
Halliburton Company Price, Consensus and EPS Surprise
Halliburton Company price-consensus-eps-surprise-chart | Halliburton Company Quote
Balance Sheet
Halliburton reported first-quarter capital expenditure of $330 million, lower than our projection of $338.7 million. As of Mar 31, 2024, the Zacks Rank #3 (Hold) company had approximately $1.9 billion in cash/cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 44.1. HAL also bought back $250 million worth its stock during the January-March period. The company generated $487 million of cash flow from operations in the first quarter, leading to free cash flow of $206 million.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Management Remarks & Outlook
Halliburton — the world’s biggest provider of hydraulic fracking — noted that the company’s strategy and solid execution were the key to its strong first-quarter results. As per HAL, North American activity bounced back from the fourth quarter lows, while its international business generated year-over-year growth for the 11th successive quarter. HAL, which generated an impressive $2.3 billion of free cash flow in 2023, sees the clients’ multi-year activity plans across markets and asset types as proof in the strength and duration of this upcycle.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
SLB SLB, the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. SLB’s bottom line also increased from the year-ago quarter’s earnings of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments. It had a long-term debt of $10.7 billion at the end of the quarter.
Meanwhile, energy infrastructure provider Kinder Morgan KMI reported first-quarter adjusted earnings per share of 33 cents, a penny above the Zacks Consensus Estimate. The bottom line was favorably affected by increased financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s first-quarter DCF was $1.42 billion, up from $1.40 billion a year ago.
As of Mar 31, 2024, Kinder Morgan reported $119 million in cash and cash equivalents. Its long-term debt amounted to $30.1 billion at the quarter-end. For full-year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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