Halliburton Tops Estimates Yet Again - Analyst Blog
22 Abril 2013 - 6:53AM
Zacks
Major oilfield services provider Halliburton
Co. (HAL) reported better-than-anticipated first quarter
2013 results – the fourth outperformance in the last 5 quarters –
helped by robust showing from its international business. Earnings
per share from continuing operations – excluding a charge
associated with the Gulf of Mexico disaster in 2010 – came in at 67
cents, beating the Zacks Consensus Estimate of 58 cents.
Following Baker Hughes Inc. (BHI) and
Schlumberger Ltd. (SLB), Halliburton stepped up as
the third member of the ‘big 4 oil service companies’ to post above
consensus result. The remaining member of the contingent,
Weatherford International Ltd. (WFT), is scheduled
to report next month.
However, the company’s per share profits came sharply lower than
the adjusted first quarter 2012 level of 89 cents, amid sluggish
activity in its core North American operations.
Revenues of $7.0 billion were 1.5% greater than that achieved
during the first quarter of 2012 and also surpassed the Zacks
Consensus Estimate of $6.9 billion.
During the quarter, North America accounted for approximately 53%
of Halliburton’s total revenues and 59% of its operating
income.
Segmental Performance
Completion & Production: Revenues for
Halliburton’s Completion and Production segment were down by 4.4%
year over year and 5.5% sequentially.
Operating income for the unit came in at $615 million, down 40.6%
from the year-earlier level, with North American profitability
plunging 50.4%. The dismal showing in the region – responsible for
more than 70% of the segment profits – was due to a tight pricing
environment for production enhancement services and depressed
domestic demand for stimulation activities.
However, the segment operating income managed to exhibit a 2.0%
sequential increase. This was driven by improved overall activity
in Australia and Saudi Arabia, a surge in completion tools demand
across Angola, the United Kingdom and Malaysia, as well as higher
cementing activity in Indonesia.
Drilling & Evaluation: Revenues from
Halliburton’s Drilling and Evaluation business were 2.7% below the
fourth quarter levels but improved by a healthy 11.5% year over
year to $2.9 billion.
Income in the Drilling and Evaluation unit increased 10.6% from the
year-ago period to $407 million, driven by robust drilling
activities in international regions and supported by the revival of
deepwater work in the Gulf of Mexico. In particular, Halliburton
gained from higher demand for drilling services in Azerbaijan and
Russia, Mexico and throughout Middle East/Asia. Results were
further propelled by encouraging pricing/sales from the ‘Baroid’
product service line in Brazil, Norway and Angola, as well as
improved levels of wireline activity in Saudi Arabia, China, and
Malaysia.
However, the segment’s operating income fell 15.9% from the
December quarter on the back of tepid drilling and wireline
services activity in the U.S. land market as well as mobilization
expenses related to widening offshore initiatives in Brazil.
Balance Sheet
Halliburton’s capital expenditure in the first quarter was $685
million. As of Mar 31, 2013, the company had approximately $2.0
billion in cash/cash equivalents and $4.8 billion in long-term
debt, representing a debt-to-capitalization ratio of 23.4%.
Zacks Rank
As of now, Halliburton, Baker Hughes, Schlumberger and Weatherford
are all Zacks Rank #3 (Hold) stocks, implying that they are
expected to perform in line with the broader U.S. equity market
over the next one to three months.
BAKER-HUGHES (BHI): Free Stock Analysis Report
HALLIBURTON CO (HAL): Free Stock Analysis Report
SCHLUMBERGER LT (SLB): Free Stock Analysis Report
WEATHERFORD INT (WFT): Free Stock Analysis Report
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