Halliburton: Q4 TAKE THREE

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Key Innovations and Operating Highlights: In Q4 2024, Halliburton (HAL) introduced the “Intelli” suite of diagnostic well intervention wireline logging services to enable increased production, help extend asset life, and reduce the total cost of operations. It also introduced “iCruise Force intelligent,” which can expand drilling capabilities and extend drilling depths in complex formations. During Q4, it added “SandTrap XL” to its sand consolidation portfolio, which addresses the challenge of excessive sand production with a low-viscosity resin system.

The company also extended its in-country operations in Namibia, including oilfield automation and remote operations, geosteering, measurement while drilling, and well testing.

Q4 Performance And Long-Term Outlook : Quarter-over-quarter, revenues in the company's Completion and Production operating segment decreased by 3.7% in Q4. The top line in the Drilling and Evaluation segment, in comparison, increased by 1.4%. Geographically, Latin America and North America witnessed a steep fall (9.5% and 7.3% down, respectively) as opposed to a 10% and 7.4% rise in Europe/Africa/CIS and the Middle East/Asia in Q4 from Q3.

Lower stimulation activity, wireline activity, and fluid services in the US onshore, lower completion tool sales in North America, and lower pressure pumping services in Latin America weighed on the Q4 financials. Some positives include improved drilling services in the Gulf of Mexico and the North Sea and artificial lift activity in the US onshore. Also, stimulation and completion-related sales picked up in the Middle East. HAL's management has identified drilling technology, unconventionals, well intervention, and artificial lift as growth engines for the long term.

Cash Flows Strengthen; Repurchase Continues : HAL's cash flow from operations strengthened (12% up) in FY2024 compared to a year ago. As a result, its FCF increased by ~17%. Debt-to-equity (0.71x) also showed improvement from FY2023, due primarily to higher shareholders' equity and slightly lower debt. During Q4, it repurchased shares worth $309 million to improve shareholder returns. The share buyback has been a consecutive exercise for the past four quarters.

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.

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