Permian basin slowdown might hurt Halliburton’s Q3 results

At a time when oil prices are increasing and worldwide rig count is climbing up, oilfield services firm Halliburton (HAL) is scheduled to report its third quarter financial results on October 22 before the market opens. Analysts expect the company to post a profit of 50 cents per share on revenues of $6.13 billion, representing a growth of about 19% and 12.6% from the prior year third quarter.

Recently, some equity research firms had lowered their Q3 earnings estimates for Halliburton. The slowing down in the Permian basin will act as a headwind for the company in the near term. This, plus the project delays in the Middle East could impact the company’s earnings by $0.08 to $0.10 per share in the third quarter. Investors will keenly look upon what the company is going to project for the fourth quarter and 2019.

In September, Halliburton stated that it stays positive on 2019 outlook for both North America and international markets. In 2019, the company expects to generate strong free cash flow driven by positive market outlook and continued working capital improvements.

Related: Halliburton Q2 2018 earnings transcript

For the quarter ended June 2018, the company met consensus views on the earnings front, while beating revenue expectations. Revenue surged 24% to $6.15 billion on strong market conditions from North America. Profit for the second quarter multi-folded to $511 million or $0.58 per share and included impairments and other charges related to a write-down of all of its remaining investment in Venezuela.

Halliburton reports upbeat revenue in Q2, meets earnings estimate

Meanwhile, the Houston, Texas-based company’s peers Schlumberger (SLB) reported its quarterly results on Friday. Schlumberger’s profit surpassed analysts’ estimates on strong demand, while revenue missed consensus estimates. Another competitor, Baker Hughes (BHGE) is set to report its quarterly earnings on October 30.

Shares of Halliburton, which stayed flat at 2:30 PM ET on Friday, have slumped more than 20% since the beginning of this year and above 10% in the past 52 weeks.

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