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    Halliburton Co (HAL)

    Board Change

    Business Description

    Halliburton Company is one of the world's largest providers of products and services to the energy industry, operating in more than 70 countries. The company is organized into two main operating segments: Completion and Production, and Drilling and Evaluation. Halliburton offers a wide range of services and products, including cementing, stimulation, specialty chemicals, field and reservoir modeling, and precise wellbore placement solutions . In 2023, the Completion and Production segment significantly contributed to the company's revenue, with a reported increase of 18% compared to the previous year, while the Drilling and Evaluation segment saw a 7% increase in revenue . The company also focuses on sustainability and energy mix transition, aiming to reduce emissions and support clean energy initiatives .

    1. Completion and Production - Provides services such as cementing, stimulation, specialty chemicals, intervention, pressure control, artificial lift, and completion products.

      • Artificial Lift - Enhances oil recovery by lifting fluids from the well.
      • Cementing - Secures and supports well casings and provides zonal isolation.
      • Completion Tools - Offers tools and equipment for well completion.
      • Multi-Chem - Supplies specialty chemicals for various oilfield applications.
      • Pipeline & Process Services - Delivers pipeline cleaning, testing, and maintenance services.
      • Production Enhancement - Improves well productivity through stimulation and other techniques.
      • Production Solutions - Provides customized solutions to optimize production.

    2. Drilling and Evaluation - Offers field and reservoir modeling, drilling, fluids, evaluation, and precise wellbore placement solutions.

      • Baroid - Supplies drilling fluid systems and services.
      • Drill Bits and Services - Designs and manufactures drill bits for various drilling applications.
      • Halliburton Project Management - Manages complex oil and gas projects.
      • Landmark Software and Services - Provides software solutions for reservoir management and decision-making.
      • Sperry Drilling - Offers directional drilling and measurement-while-drilling services.
      • Testing and Subsea - Conducts well testing and provides subsea solutions.
      • Wireline and Perforating - Delivers wireline logging and perforating services for well evaluation and completion.

    Q3 2024 Summary

    Initial Price$33.96July 1, 2024
    Final Price$29.93October 1, 2024
    Price Change$-4.03
    % Change-11.87%

    What went well

    • Halliburton has 90% of its fracturing fleet committed for 2025, indicating strong demand and future revenue visibility. The company stays out of the spot market, sizes the fleet appropriately, and leverages its high-performance technology to command premium pricing.
    • Significant R&D investment in intervention technologies, such as the riserless intervention service developed with TechnipFMC, positions Halliburton for outsized international growth. These advancements open new markets and make wells economically viable that previously were not.
    • Leading edge in fracking efficiency and technology, exemplified by the Zeus platform, allows Halliburton to achieve more with less equipment, driving capital efficiency and supporting margins. The company is at the forefront of industry efficiency gains, helping customers be more productive while maintaining profitability.

    What went wrong

    • Uncertainty in Fleet Pricing for 2025: Despite having 90% of their fleet committed for 2025, Halliburton has not provided details on the pricing of these contracts, raising concerns about the profitability of their operations in a potentially challenging market.
    • Increased Efficiency Reducing Demand: Operators are becoming more efficient, with the ability to use four frac fleets in 2025 to perform the work of five fleets in 2024, which could lead to reduced demand for Halliburton's services and impact their revenues and margins.
    • Limited Room for Further Efficiency Gains: Halliburton acknowledges that the industry has become so efficient that it may be harder to achieve additional efficiency improvements from here, potentially limiting future growth and margin expansion.

    Q&A Summary

    1. North America Fleet Commitments
      Q: Do you have 90% of your frac fleets committed for 2025?
      A: Yes, 90% of our frac fleets are committed for 2025, with up to 50% potentially being Zeus fleets. This strong commitment gives us confidence about 2025, and we're focused on maximizing value by solving the hardest problems in unconventionals and leveraging our Zeus platform.

    2. Impact of Efficiency on Profitability
      Q: How does increased efficiency impact your profitability in North American frac?
      A: We're at the leading edge of efficiency, getting more reps with less capital. Generating the same or more revenue with less equipment is positive and strategically aligns with why we build equipment the way we do. Our Zeus platform creates outsized value for customers, and leading this efficiency keeps us busy and creates more opportunities.

    3. 2025 CapEx Guidance
      Q: Will CapEx remain at 6% of revenue for next year?
      A: Yes, we expect CapEx to be 6% of revenue in 2025. This will be balanced between Completion & Production, Drilling & Evaluation, and between North America and international markets.

    4. Stock Buybacks
      Q: Is $250 million per quarter the right run rate for stock buybacks in 2025?
      A: We plan to average $250 million per quarter in stock buybacks, leading to around $1 billion for the year, significantly up from 2023. We view buybacks as a systematic mechanism to return cash to shareholders through cycles.

    5. International Growth Opportunities
      Q: How does international opportunity compare to North America, particularly regarding productivity?
      A: Internationally, we're much further behind in technology application compared to North America. We're not yet at the point where efficiency reduces demand internationally; in fact, demand is increasing. We see solid growth opportunities across business lines and geographies, especially in intervention services where we're investing in R&D and developing technologies like riserless intervention.

    6. Cybersecurity Incident Impact
      Q: What lessons were learned from the cybersecurity incident, and how does it affect the ERP rollout?
      A: The importance of preparedness and partnering with top professionals cannot be overemphasized. The incident caused our IT team to focus on restoration, delaying the ERP system rollout by 3 to 6 months, pushing completion into H1 2026.

    7. Offshore Business Outlook
      Q: Is there anything to be mindful of for your offshore business in 2025?
      A: We see stability in our biggest offshore markets like the Gulf of Mexico, Brazil, Guyana, Norway, and West Africa. We expect customers to continue drilling and developing offshore resources, and we're equipped to support them.

    8. Growth in Intervention Services
      Q: Does growth in intervention services make earnings less cyclical?
      A: Yes, we believe that growth in our intervention business makes earnings less cyclical, and it's part of the reason we want to continue investing to generate outsized growth.

    Key Metrics

    View all financials →

    Executive Team

    NamePositionStart DateShort Bio
    Van H. BeckwithExecutive Vice President, Secretary, and Chief Legal OfficerDecember 2020Van H. Beckwith has been serving as the Executive Vice President, Secretary, and Chief Legal Officer of Halliburton Company since December 2020. Prior to this role, he was the Senior Vice President and General Counsel .
    Eric J. CarreExecutive Vice President and Chief Financial OfficerMay 2022Eric J. Carre has been serving as the Executive Vice President and Chief Financial Officer of Halliburton Company since May 2022. He was previously the Executive Vice President of Global Business Lines from May 2016 to April 2022 .
    Charles E. Geer, Jr.Senior Vice President and Chief Accounting OfficerDecember 2019Charles E. Geer, Jr. is the Senior Vice President and Chief Accounting Officer of Halliburton Company since December 2019. He was Vice President and Corporate Controller from January 2015 to December 2019 .
    Myrtle L. JonesSenior Vice President, TaxMarch 2013Myrtle L. Jones serves as the Senior Vice President, Tax at Halliburton Company since March 2013 .
    Timothy M. McKeonSenior Vice President and TreasurerJanuary 2022Timothy M. McKeon is the Senior Vice President and Treasurer of Halliburton Company since January 2022. He was Vice President and Treasurer from January 2014 to December 2021 .
    Jeffrey A. MillerChairman of the Board, President, and Chief Executive OfficerJanuary 2019Jeffrey A. Miller has been with Halliburton since 1997, serving in various leadership roles. He has been Chairman of the Board, President, and CEO since January 2019. He was a Board member since 2014 .
    Lawrence J. PopeExecutive Vice President of Administration and Chief HR OfficerJanuary 2008Lawrence J. Pope has been serving as the Executive Vice President of Administration and Chief Human Resources Officer at Halliburton Company since January 2008 .
    Mark J. RichardPresident, Western HemisphereFebruary 2019Mark J. Richard is the President, Western Hemisphere at Halliburton Company since February 2019. He was Senior Vice President, Northern U.S. Region from August 2018 to January 2019 .
    Jill D. SharpSenior Vice President, Internal Assurance ServicesJanuary 2022Jill D. Sharp has been serving as the Senior Vice President, Internal Assurance Services at Halliburton Company since January 2022. She was Vice President, Internal Assurance Services from September 2021 to December 2021 .
    Shannon SlocumPresident, Eastern HemisphereMarch 2023Shannon Slocum is the President, Eastern Hemisphere of Halliburton Company since March 2023. He was Senior Vice President, Global Business Development and Marketing from January 2020 to February 2023 .

    Questions to Ask Management

    1. Despite your guidance of international growth in the low to mid-single digits next year, how do you plan to accelerate growth beyond market rates to meet investor expectations, especially after acknowledging that full-year revenue growth will be below prior guidance?

    2. Given the 9% year-over-year decline in North America revenue and a full-year revenue decline expected at the low end of prior guidance, what specific strategies will you implement to reverse this trend and improve competitiveness in the North American market amid ongoing challenges?

    3. The August cybersecurity event negatively impacted your adjusted earnings by $0.02 per share and affected free cash flow due to delayed billing and collections; what comprehensive measures are you taking to enhance your cybersecurity infrastructure to prevent future incidents that could affect your financial performance?

    4. As competition intensifies in your core international business lines like cementing, completion tools, and drilling fluids, how do you plan to maintain or grow your market share, and what innovative solutions are you offering to differentiate yourself in these mature markets?

    5. With plans for over 50% of your active fleet to be Zeus fleets next year, what potential risks do you foresee regarding customer adoption, technological integration, or supply chain constraints that could hinder the deployment of the Zeus platform, and how might these challenges affect your operational and financial goals?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateFebruary 2006
    End Date/DurationN/A
    Total Additional AmountN/A
    Remaining Authorization$3.4 billion as of 2024-12-21
    DetailsSystematic mechanism to return cash to shareholders, targeting $250 million per quarter with an aim of $1 billion for the year

    Past Guidance

    Q3 2024 Earnings Call

    • Issued Period: Q3 2024
    • Guided Period: Q4 2024 and FY 2024
    • Guidance:
      1. Corporate Expenses: Expected to increase by about $10 million in Q4 .
      2. SAP S/4 Migration Expenses: Expected to increase by about $5 million in Q4 .
      3. Net Interest Expense: Expected to increase by about $5 million in Q4 .
      4. Other Net Expense: Expected to be approximately $35 million in Q4 .
      5. Effective Tax Rate: Expected to be approximately 23.5% in Q4 .
      6. Capital Expenditures: For the full year 2024, expected to be approximately 6.4% of revenue .
      7. Free Cash Flow: Expected to be at least 10% higher than in 2023 for the full year 2024 .
      8. Completion and Production Division: Anticipated sequential revenue decline of 1% to 3% and margins to decline 75 to 125 basis points in Q4 .
      9. Drilling and Evaluation Division: Expected sequential revenue to be flat to up 2% and margins to be flat to up 50 basis points in Q4 .
      10. International Revenue Growth: Expected to be in line with the overall market and below prior guidance for the full year .
      11. North America Revenue: Expected to decline at the low end of prior guidance for the full year due to seasonality and budget exhaustion .
      12. Capital Expenditures for 2025: Broadly expected to remain at 6% of revenue .
      13. Stock Buybacks: Planned to average $250 million per quarter, leading to approximately $1 billion for the year, significantly up from 2023 .

    Q2 2024 Earnings Call

    • Issued Period: Q2 2024
    • Guided Period: Q3 2024
    • Guidance:
      1. Corporate Expenses: Expected to increase slightly in Q3 2024 .
      2. SAP Expenses: Expected to increase slightly in Q3 2024 .
      3. Net Interest Expense: Expected to be roughly flat in Q3 2024 .
      4. Other Net Expense: Expected to be approximately $35 million in Q3 2024 .
      5. Effective Tax Rate: Expected to increase by approximately 1% in Q3 2024 .
      6. Capital Expenditures: Expected to be approximately 6% of revenue for the full year 2024 .
      7. Free Cash Flow: Expected to be at least 10% higher than in 2023 for the full year 2024 .
      8. Completion and Production Division: Anticipated sequential revenue to be down 1% to 3% and margins to decrease by 75 to 125 basis points in Q3 2024 .
      9. Drilling and Evaluation Division: Expected sequential revenue to increase 2% to 4% and margins to increase by 25 to 75 basis points in Q3 2024 .
      10. North America Revenue: Expected to decline 6% to 8% for the full year 2024 compared to the previous year .
      11. International Business: Expected to deliver about 10% revenue growth for the full year 2024 .

    Q1 2024 Earnings Call

    • Issued Period: Q1 2024
    • Guided Period: Q2 2024 and FY 2024
    • Guidance:
      1. Completion and Production Division:
        • Sequential revenue is expected to increase by 2% to 4%.
        • Margins are anticipated to increase by 25 to 75 basis points .
      2. Drilling and Evaluation Division:
        • Sequential revenue is expected to increase by 1% to 3%.
        • Margins are anticipated to increase by 25 to 75 basis points .
      3. Corporate Expenses: Expected to be approximately flat for the second quarter of 2024 .
      4. SAP Expenses: Expected to be approximately flat for the second quarter of 2024 .
      5. Net Interest Expense: Expected to be roughly flat for the second quarter of 2024 .
      6. Other Net Expense: Expected to be approximately $35 million for the second quarter of 2024 .
      7. Effective Tax Rate: Expected to increase by approximately 75 basis points for the second quarter of 2024 .
      8. Capital Expenditures: Expected to remain approximately 6% of revenue for the full year of 2024 .
      9. Free Cash Flow: Expected to be at least 10% higher than in 2023 for the full year of 2024 .
      10. International Revenue: Expected to grow at low double digits year-on-year for 2024 .
      11. North America Revenue and Margins: Expected to be flattish compared with 2023 levels for the full year of 2024 .

    Q4 2023 Earnings Call

    • Issued Period: Q4 2023
    • Guided Period: Q1 2024
    • Guidance:
      1. Corporate Expenses: Expected to be flat in Q1 2024 compared to Q4 2023 .
      2. SAP S/4 Migration Expenses: Expected to be approximately $30 million or $0.03 per share in Q1 2024, with a total of $120 million expected for the full year 2024 and $80 million in 2025 .
      3. Net Interest Expense: Expected to be roughly $85 million in Q1 2024 .
      4. Other Net Expense: Expected to be about $35 million in Q1 2024 .
      5. Effective Tax Rate: Expected to be approximately 21% for Q1 2024, slightly lower than the anticipated full-year effective tax rate .
      6. Capital Expenditures: Expected to remain approximately 6% of revenue for the full year 2024 .
      7. Free Cash Flow: Expected to be directionally higher in 2024 compared to 2023 .
      8. Completion and Production Division: Sequential revenue expected to be flat to down 2% in Q1 2024, with margins lower by 125 to 175 basis points .
      9. Drilling and Evaluation Division: Sequential revenue expected to decline between 1% to 3% in Q1 2024, with margins lower by 25 to 75 basis points .
      10. International Business: Expected low double-digit growth in 2024 .
      11. North America Business: Expected to have a flattish revenue and margin environment for 2024 .

    Latest news

    Recent developments and announcements about HAL.

    Corporate Leadership

      Leadership Change

      ·
      Jan 8, 2025, 9:34 PM

      Who is leaving? Bhavesh (Bob) V. Patel, a Director at Halliburton, has decided not to stand for re-election and will retire early to pursue other opportunities. He will remain in his role until May 21, 2025, when his term ends.

      Why? His decision is personal and not due to any disagreements with Halliburton's operations, policies, or practices.

      Who is stepping up? No successor has been announced yet.

      Board Change

      ·
      Jan 8, 2025, 9:34 PM

      Bhavesh (Bob) V. Patel, a member of the Halliburton Company Board of Directors, has announced his decision to not stand for re-election and retire early. He will remain on the board until his term ends on May 21, 2025, prior to the annual meeting of shareholders.