Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Halliburton Co (HAL, Financial) reported total company revenue of $5.7 billion with an adjusted operating margin of 17%.
- International revenue grew by 4% year-over-year, led by a 9% increase in the Middle East/Asia region.
- The company generated $841 million of cash flow from operations and $543 million of free cash flow.
- Halliburton Co (HAL) repurchased approximately $200 million of its common stock during the quarter.
- The company has 90% of its fracturing fleets committed for work in 2025, indicating strong future demand.
Negative Points
- North America revenue decreased by 9% year-over-year, primarily due to lower hydraulic fracturing activity.
- The August cybersecurity event and storms in the Gulf of Mexico reduced adjusted earnings by approximately $0.02 per share.
- The cybersecurity event caused delays in billing and collections, impacting free cash flow.
- The implementation of SAP S/4 is expected to be delayed by 3 to 6 months, with additional costs of $20 million to $30 million.
- Completion and Production division revenue decreased by 3% sequentially, driven by lower hydraulic fracturing services.
Q & A Highlights
Q: How might the election impact Halliburton's business, particularly regarding regulation and permitting?
A: Jeffrey Miller, Chairman, President, and CEO, stated that the election could only be positive for Halliburton. He believes that reduced regulation and faster permitting will benefit the industry, leading to increased onshore activity. This reflects a common-sense view of economics and resource development, which is crucial for the country.
Q: What is the outlook for Halliburton's North America onshore business, considering the current slowdown and pricing pressures?
A: Jeffrey Miller noted that while there is a slowdown, Halliburton's Zeus platform continues to see growing demand. The company plans to stick with its strategy of maximizing value and letting diesel retire or move outside the country, replacing it with electric solutions. The focus remains on creating outsized value for customers.
Q: Can you provide insights into Halliburton's intervention business and its growth prospects?
A: Jeffrey Miller highlighted the importance of the intervention business, which maintains the baseload of oil and gas production globally. Halliburton has invested significantly in R&D for this segment, developing technologies like riserless intervention. This focus is expected to drive outsized growth internationally and make earnings less cyclical.
Q: How does Halliburton view the international market in terms of technology application and efficiency compared to North America?
A: Jeffrey Miller explained that international markets are behind North America in technology application. However, there is significant growth potential as these markets begin to adopt advanced technologies. Halliburton's technology will help create better wells, and the company is positioned to lead this transition.
Q: What are the impacts of the recent cybersecurity incident on Halliburton's operations and future plans?
A: Jeffrey Miller emphasized the importance of preparedness and contracting with top professionals. Eric Carre, CFO, noted that the incident caused delays in the SAP ERP rollout and impacted Q3 stock buybacks. However, the company plans to catch up on buybacks in Q4 and expects the ERP project to be delayed by 3 to 6 months.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
