Categories Analysis, Earnings, Technology
Earnings Preview: Slide in crude oil prices could hurt Halliburton in Q4
Oilfield service provider Halliburton Co (HAL) is expected to announce its fourth-quarter 2018 results before the opening bell on Jan. 22.
For the three-month period that ended on December 2018, the Street expects earnings of $0.37 per share on revenue of about $5.9 billion.
With sector leader Schlumberger (SLB) not exuding confidence, Halliburton is also not expected to beat earnings consensus for the quarter.
Oil service providers usually see a surge in their sales and profitability after strong commodity prices, as they typically point to robust upstream activities.
But West Texas Intermediate (WTI) crude oil prices crashed in the past quarter. This could lead to stakeholders treading a more careful line regarding further investment.
A general industry slowdown would hurt the overall demand for services and equipment — something that is not looking good for Halliburton.
REVISITING THE THIRD QUARTER
In the previously reported quarter, robust international activity beat the slowdown in North American drilling fluids demand and pricing pressures leading to an earnings beat of 2%.
Net income rose to $435 million or $0.50 per share in the September quarter from $365 million or $0.42 per share.
ALL IS NOT WELL
Despite reservations on slowing demand for Halliburton services, the fourth quarter saw US rig count rise by 29 to 1,083 from 1,054 — despite the oil price crash.
Halliburton is expected to gain favorably on this.
However, pipeline takeaway capacity constraints in the Permian Basin might still come to bite Halliburton’s prospects.
The company has already warned about a slowdown in the Permian Basin affecting fourth-quarter earnings. This could also push Halliburton’s adjusted operating income estimate for completion and production close to $460 million, much lower than third quarter’s $613 million. This is troublesome, since it is the lion’s share of the company’s total operating income.
Get access to timely and accurate verbatim transcripts that are published within hours of the event
Most Popular
Intensity Therapeutics is establishing a new field of localized cancer reduction: CEO
Intensity Therapeutics, Inc. (NASDAQ: INTS) is a clinical biotechnology company engaged in the discovery development, and commercialization of first-in-class cancer drugs that attenuate tumors with minimal side effects while training
INTU Earnings: Intuit Q1 2025 adj. profit rises on higher revenues
Financial technology company Intuit Inc. (NASDAQ: INTU) Thursday announced results for the first quarter of 2025, reporting a modest increase in adjusted earnings. The Mountain View-headquartered company’s first-quarter revenue came
Riding the AI wave, Nvidia looks set to stay on the high-growth path
After delivering strong results for the third quarter, Nvidia Corporation (NASDAQ: NVDA) this week said the launch of its new-generation Blackwell chip is on track. The company is thriving on