Key Partnerships and Projects: In Q2 2024, Halliburton (HAL) introduced an advanced submersible borehole and surface pump technology called GeoESP. Its SentinelCem cement system will enable storage in offshore and remote locations. HAL announced a license agreement with Wintershall Dea during Q2 to integrate static and dynamic data in real-time. It also announced a partner agreement with AIQ (an Abu Dhabi-based AI provider). The company opened a new facility in Katy, Texas, to expand its roof coating production. Offshore, it received a multi-well construction contract in Namibia.
International Markets Run The Show: Quarter-over-quarter, the revenues in the company’s Completion and Production operating segment witnessed a marginal rise in Q2. In contrast, the topline in the Drilling and Evaluation segment remained unchanged. Geographically, North America and Latin America witnessed a fall (2.6% and 1% down) compared to a 5.4% rise in the Middle East/Asia in Q2 from Q1. The company’s Europe/Africa/CIS saw a topline rise.
Lower stimulation activity in the US onshore, lower completion tool sales in the Western Hemisphere, and decreased artificial lift services put pressure on the Q2 financials. In contrast, completion tool sales in the Eastern Hemisphere, higher stimulation activity in Latin America, and improved well-intervention services absorbed much of the revenue declines. HAL’s management anticipates equipment tightness and high activity levels in the international energy market. In North America, it focuses on improving shareholder value through the cycle.
Cash Flows And Balance Sheet Strengthen Further: HAL’s cash flow from operations strengthened (34% up) in 1H 2024 compared to a year ago. As a result, its FCF increased significantly. Debt-to-equity (0.76x) also showed clear improvement from FY2023, due primarily to higher shareholders’ equity. During Q2, it repurchased shares worth $250 million to improve shareholder returns, a repeat after Q1. You may read more about the company in our previous article here.
Thanks for reading the HAL take three, designed to give you three critical takeaways from HAL’s earnings report. Soon, we will present a second update on HAL earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.
