Halliburton (HAL) Comes up Short on Missed Revenue and Lowered Q4 Expectations

Michael Teague |

Despite improving its top and bottom line performances from a year ago, shares for top oil & gas services provider Halliburton (HAL) were trading substantially lower by midday, as the company’s earnings report released prior to the opening bell on Monday fell short of consensus expectations in key metrics.

For the recently-ended third quarter, the world’s second-largest oilfield services company posted a profit of $706 million, or $0.79 per share on revenue of $7.47 billion, a nice improvement on the prior-year period, during which the company netted $602 million, or $0.65 per share on revenue of $7.12 billion. Adjusted earnings of $0.83 per share nudged just ahead of expectations, but revenue came in short of the $7.5 billion for which analysts had been hoping.

The miss comes even as the recently-ended quarter saw the company ramping up its operations abroad, particularly in markets where resource-nationalism and geopolitical considerations have traditionally fostered a more convoluted operating environment for US companies, such as Saudi Arabia, Russia, and, to a lesser extent, Angola. Halliburton also bolstered its presence in key area such as Singapore and Brazil.

Recent and unprecedented flooding in Colorado kept a damper on North American revenue, limiting it to a modest 2 percent increase during the quarter despite increased deep-water drilling in the Gulf of Mexico as well as a seasonal uptick in Canadian operations north of the border.

Segmentally, the company saw both year-over-year and sequential increases in completion & production, as well as drilling & evaluation, with the former putting up a particularly impressive improvement of nearly 5 percent on the year-ago period to $4.5 billion.

Monday’s news comes on the heels of last week’s earnings reports from industry rivals Schlumberger (SLM) and Baker Hughes (BHI) , both of whom watched shares jump on respective successes in Q3. Shares for Halliburton were hovering lower by 2 percent on Monday to just over $51, however, as a result of the company’s own expectations for the fourth quarter, during which revenue and margins will be impacted by slower-than-expected activity in Latin America.

The drop in shares should not be a significant cause for alarm, however. The stock is up over 50 percent on the year, and analysts have generally remained unwavering on their buy-ratings.


[Image Courtesy of Flickr Creative Commons]

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Symbol Name Price Change % Volume
AATV Adaptive Ad Systems Inc 1.69 0.00 0.00 0
BHI Baker Hughes Incorporated 52.15 -0.20 -0.38 3,056,113
HAL Halliburton Company 48.24 -0.19 -0.39 7,399,113
SLM SLM Corporation 7.19 0.05 0.70 2,456,459


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