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Halliburton Announces First Quarter 2024 Results
* Net income of $0.68 per diluted share.
* Adjusted net income per diluted share(1 )of $0.76.
* Revenue of $5.8 billion and operating margin of 17%.
* Cash flow from operations of $487 million and free cash flow(2) of $206
million.
* Repurchases of approximately $250 million of common stock.
Halliburton Company (NYSE: HAL) announced today net income of $606 million, or
$0.68 per diluted share, for the first quarter of 2024. This compares to net
income for the first quarter of 2023 of $651 million, or $0.72 per diluted
share. Adjusted net income(3) in the first quarter of 2024, was $679 million,
or $0.76 per diluted share. Halliburton's total revenue for the first quarter
of 2024 was $5.8 billion, a 2% increase when compared to the first quarter of
2023. Operating income was $987 million in the first quarter of 2024, flat
when compared to the first quarter of 2023.
"Halliburton delivered solid first quarter results that again demonstrated the
power of our strategy and the strength of our execution. Activity in North
America recovered from fourth-quarter lows, and our international business
delivered its 11th consecutive quarter of year-on-year growth," commented Jeff
Miller, Chairman, President and CEO.
"Our customers’ multi-year activity plans across markets and asset types
confirms my confidence in the strength and duration of this upcycle.
"Halliburton demonstrated its commitment to shareholder returns in the first
quarter and repurchased $250 million of common stock - a solid start to the
year and a good benchmark for our expectations going forward," concluded
Miller.
Operating Segments
Completion and Production
Completion and Production revenue in the first quarter of 2024 was $3.4
billion, down slightly when compared to the first quarter of 2023, while
operating income was $688 million, an increase of $22 million, or 3%. These
results were primarily driven by reduced pressure pumping services in U.S.
land. Partially offsetting this decline were higher completion tool sales in
the Western Hemisphere and Europe/Africa, improved stimulation activity in
Latin America, increased cementing activity internationally, and higher
artificial lift activity in North America. Operating income increased due to
completion tool product sales and activity and pricing in artificial lift and
cementing services.
Drilling and Evaluation
Drilling and Evaluation revenue in the first quarter of 2024 was $2.4 billion,
an increase of $163 million, or 7%, when compared to the first quarter of
2023, while operating income was $398 million, an increase of $29 million, or
8%. These results were driven by higher drilling-related services in the
Middle East and North America, improved activity in multiple product service
lines in Latin America, and higher fluid services in Europe. Partially
offsetting these improvements were lower project management activity in the
Middle East/Asia, reduced wireline activity in North America, reduced drilling
services in Europe/Africa, and lower fluid services in Asia.
Geographic Regions
North America
North America revenue in the first quarter of 2024 was $2.5 billion, an 8%
decrease when compared to the first quarter of 2023. This decline was
primarily driven by lower pressure pumping services in U.S. land along with
lower wireline activity throughout the region. Partially offsetting these
declines were improved completion tool sales, higher pressure pumping
services, and improved drilling-related services in the Gulf of Mexico along
with higher artificial lift activity in U.S. land.
International
International revenue in the first quarter of 2024 was $3.3 billion, an
increase of 12% when compared to the first quarter of 2023.
Latin America revenue in the first quarter of 2024 was $1.1 billion, an
increase of 21% year over year. This improvement was primarily due to higher
drilling-related services and increased software sales in Mexico, improved
pressure pumping services and fluid services in Argentina, and increased
activity in multiple product service lines in Brazil and Ecuador. Partially
offsetting these improvements was lower fluid services in Brazil and the
Caribbean.
Europe/Africa revenue in the first quarter of 2024 was $729 million, an
increase of 10% year over year. This increase was primarily driven by higher
completion tool sales in the region and improved fluid services in Norway and
the Caspian Area. Partially offsetting these improvements was lower drilling
services in the region.
Middle East/Asia revenue in the first quarter of 2024 was $1.4 billion, an
increase of 6% year over year. This increase was primarily due to improved
activity in multiple product service lines in Kuwait, Saudi Arabia, and Oman.
Partially offsetting these improvements were decreased project management
activity in India and Saudi Arabia and lower fluid services in Asia.
Other Financial Items
During the first quarter of 2024, Halliburton:
* Repurchased approximately $250 million of its common stock.
* Paid dividends of $0.17 per share.
* Spent $34 million on SAP S4 migration.
Selective Technology & Highlights
* Halliburton introduced Reservoir Xaminer™, a formation testing service
designed to provide precise formation pressure measurements and representative
samples of the reservoir fluid in less time. Reservoir Xaminer service is
designed to provide fast, high-quality, and customized data, even in the
toughest conditions. It features an innovative technological advancement in
the enhanced probe section with dual quartz pressure sensors. Additionally,
the service provides real-time monitoring, larger area dual probes, and
high-strength straddle packers. This gives operators the ability to test their
formations more quickly and accurately.
* Halliburton added the CorrosaLock™ cement system to its growing carbon
capture, utilization, and storage (CCUS) portfolio. The CorrosaLock cement
system, which is designed for CO(2) storage, is a composite of Portland-based
cement and Halliburton’s proprietary WellLock(®) resin system. The
incorporation of resin generates a film on the composite surface that creates
a coating effect that aids in bonding. Resin also reduces the system’s
effective porosity and forms an adhesive layer to help protect cement from
CO(2) degradation. The result is enhanced cement sheath elasticity and shear
bond strength that allows the barrier to better withstand downhole forces
during cyclic injection and provides increased anchoring force to the
formation when compared to conventional cement systems. The CorrosaLock system
joins the WellLock resin system, ThermaLock™ cement, and CorrosaCem™
cement system as part of Halliburton’s advanced CCUS portfolio.
* Halliburton added the SuperFill™ II diverter to its SuperFill™ surge
reduction equipment portfolio. The SuperFill II diverter redirects fluid flow
to minimize frictional pressure loss through the length of the landing string,
which enhances the benefits of the auto-fill float equipment. The innovative
operating glass seat provides an open internal flow path with no restrictions
once the diverter is closed. The SuperFill II diverter is compatible with the
industry’s liner and subsurface release plug systems. The versatility of
this feature ensures increased efficiency throughout the entire operational
spectrum, from running casing to total depth, to the release of the cementing
wiper plugs, to the installation of the liner.
* Halliburton Labs announced Pulakesh Mukherjee, a Partner at Imperative
Ventures, joined its advisory board. Mr. Mukherjee brings extensive experience
in energy systems, innovation, and venture capital to support Halliburton
Labs’ collaborative environment where entrepreneurs, academics, investors,
and experienced practitioners advance the future of energy faster.
(1) Adjusted net income per diluted share is a non-GAAP financial measure; please
see reconciliation of Net Income to Adjusted Net Income in Footnote Table 1.
(2) Free cash flow is a non-GAAP financial measure; please see reconciliation of
Cash Flows from Operating Activities to Free Cash Flow in Footnote Table 2.
(3) Adjusted net income is a non-GAAP financial measure; please see reconciliation
of Net Income to Adjusted Net Income in Footnote Table 1.
About Halliburton
Halliburton is one of the world’s leading providers of products and services
to the energy industry. Founded in 1919, we create innovative technologies,
products, and services that help our customers maximize their value throughout
the life cycle of an asset and advance a sustainable energy future. Visit us
at www.halliburton.com
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Forward-looking Statements
The statements in this press release that are not historical statements are
forward-looking statements within the meaning of the federal securities laws.
These statements are subject to numerous risks and uncertainties, many of
which are beyond the company's control, which could cause actual results to
differ materially from the results expressed or implied by the statements.
These risks and uncertainties include, but are not limited to: changes in the
demand for or price of oil and/or natural gas, including as a result of
development of alternative energy sources, general economic conditions such as
inflation and recession, the ability of the OPEC+ countries to agree on and
comply with production quotas, and other causes; changes in capital spending
by our customers; the modification, continuation or suspension of our
shareholder return framework, including the payment of dividends and purchases
of our stock, which will be subject to the discretion of our Board of
Directors and may depend on a variety of factors, including our results of
operations and financial condition, growth plans, capital requirements and
other conditions existing when any payment or purchase decision is made;
potential catastrophic events related to our operations, and related
indemnification and insurance; protection of intellectual property rights;
cyber-attacks and data security; compliance with environmental laws; changes
in government regulations and regulatory requirements, particularly those
related to oil and natural gas exploration, the environment, radioactive
sources, explosives, chemicals, hydraulic fracturing services, and
climate-related initiatives; assumptions regarding the generation of future
taxable income, and compliance with laws related to and disputes with taxing
authorities regarding income taxes; risks of international operations,
including risks relating to unsettled political conditions, war, including the
ongoing Russia and Ukraine conflict and any expansion of that conflict, the
effects of terrorism, foreign exchange rates and controls, international trade
and regulatory controls and sanctions, and doing business with national oil
companies; weather-related issues, including the effects of hurricanes and
tropical storms; delays or failures by customers to make payments owed to us;
infrastructure issues in the oil and natural gas industry; availability and
cost of highly skilled labor and raw materials; completion of potential
dispositions, and acquisitions, and integration and success of acquired
businesses and joint ventures. Halliburton's Form 10-K for the year ended
December 31, 2023, recent Current Reports on Form 8-K and other Securities and
Exchange Commission filings discuss some of the important risk factors
identified that may affect Halliburton's business, results of operations, and
financial condition. Halliburton undertakes no obligation to revise or update
publicly any forward-looking statements for any reason.
HALLIBURTON COMPANY
Condensed Consolidated Statements of Operations
(Millions of dollars and shares except per share data)
(Unaudited)
Three Months Ended
March 31 December 31
2024 2023 2023
Revenue:
Completion and Production $ 3,373 $ 3,409 $ 3,317
Drilling and Evaluation 2,431 2,268 2,422
Total revenue $ 5,804 $ 5,677 $ 5,739
Operating income:
Completion and Production $ 688 $ 666 $ 716
Drilling and Evaluation 398 369 420
Corporate and other (65 ) (58 ) (63 )
SAP S4 upgrade expense (34 ) — (15 )
Total operating income 987 977 1,058
Interest expense, net (92 ) (101 ) (98 )
Loss on Blue Chip Swap transactions (a) — — (6 )
Other, net (b) (108 ) (47 ) (119 )
Income before income taxes 787 829 835
Income tax provision (c) (178 ) (174 ) (168 )
Net income $ 609 $ 655 $ 667
Net income attributable to noncontrolling interest (3 ) (4 ) (6 )
Net income attributable to company $ 606 $ 651 $ 661
Basic and diluted net income per share $ 0.68 $ 0.72 $ 0.74
Basic weighted average common shares outstanding 889 904 893
Diluted weighted average common shares outstanding 891 907 897
(a) The Central Bank of Argentina maintains currency controls that limit our
ability to access U.S. dollars in Argentina and remit cash from our Argentine
operations. The execution of certain trades known as Blue Chip Swaps,
effectively results in a parallel U.S. dollar exchange rate. During the three
months ended December 31, 2023, Halliburton entered into Blue Chip Swap
transactions which resulted in a $6 million pre-tax loss.
(b) During the three months ended March 31, 2024, Halliburton incurred a charge of
$82 million primarily due to impairment of an investment in Argentina and
currency devaluation in Egypt. Halliburton incurred a loss of $103 million due
to the devaluation of the currency in Argentina during the three months ended
December 31, 2023.
(c) The tax provision during the three months ended March 31, 2024, includes the
tax effect on the impairment of an investment in Argentina and Egypt currency
impact. The tax provision during the three months ended December 31, 2023
includes the tax effect on the Argentina currency impact. Additionally, during
the three months ended December 31, 2023 the tax provision includes the loss
on Blue Chip Swap transactions.
See Footnote Table 1 for Reconciliation of Net Income to Adjusted Net Income.
HALLIBURTON COMPANY
Condensed Consolidated Balance Sheets
(Millions of dollars)
(Unaudited)
March 31 December 31
2024 2023
Assets
Current assets:
Cash and equivalents $ 1,891 $ 2,264
Receivables, net 5,103 4,860
Inventories 3,258 3,226
Other current assets 1,171 1,193
Total current assets 11,423 11,543
Property, plant, and equipment, net 4,973 4,900
Goodwill 2,850 2,850
Deferred income taxes 2,472 2,505
Operating lease right-of-use assets 1,082 1,088
Other assets 1,854 1,797
Total assets $ 24,654 $ 24,683
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 3,092 $ 3,147
Accrued employee compensation and benefits 542 689
Current portion of operating lease liabilities 267 262
Other current liabilities 1,478 1,510
Total current liabilities 5,379 5,608
Long-term debt 7,637 7,636
Operating lease liabilities 883 911
Employee compensation and benefits 381 408
Other liabilities 692 687
Total liabilities 14,972 15,250
Company shareholders’ equity 9,636 9,391
Noncontrolling interest in consolidated subsidiaries 46 42
Total shareholders’ equity 9,682 9,433
Total liabilities and shareholders’ equity $ 24,654 $ 24,683
HALLIBURTON COMPANY
Condensed Consolidated Statements of Cash Flows
(Millions of dollars)
(Unaudited)
Three Months Ended
March 31
2024 2023
Cash flows from operating activities:
Net income $ 609 $ 655
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation, depletion, and amortization 263 241
Working capital (a) (341 ) (728 )
Other operating activities (44 ) (46 )
Total cash flows provided by operating activities 487 122
Cash flows from investing activities:
Capital expenditures (330 ) (268 )
Proceeds from sales of property, plant, and equipment 49 41
Other investing activities (100 ) (68 )
Total cash flows used in investing activities (381 ) (295 )
Cash flows from financing activities:
Stock repurchase program (250 ) (100 )
Dividends to shareholders (151 ) (145 )
Other financing activities (21 ) (4 )
Total cash flows used in financing activities (422 ) (249 )
Effect of exchange rate changes on cash (57 ) (45 )
Decrease in cash and equivalents (373 ) (467 )
Cash and equivalents at beginning of period 2,264 2,346
Cash and equivalents at end of period $ 1,891 $ 1,879
(a) Working capital includes receivables, inventories, and accounts payable.
See Footnote Table 2 for Reconciliation of Cash Flows from Operating Activities to Free Cash Flow.
HALLIBURTON COMPANY
Revenue and Operating Income Comparison
By Operating Segment and Geographic Region
(Millions of dollars)
(Unaudited)
Three Months Ended
March 31 December 31
Revenue 2024 2023 2023
By operating segment:
Completion and Production $ 3,373 $ 3,409 $ 3,317
Drilling and Evaluation 2,431 2,268 2,422
Total revenue $ 5,804 $ 5,677 $ 5,739
By geographic region:
North America $ 2,546 $ 2,765 $ 2,423
Latin America 1,108 915 1,030
Europe/Africa/CIS 729 662 767
Middle East/Asia 1,421 1,335 1,519
Total revenue $ 5,804 $ 5,677 $ 5,739
Operating Income
By operating segment:
Completion and Production $ 688 $ 666 $ 716
Drilling and Evaluation 398 369 420
Total operations 1,086 1,035 1,136
Corporate and other (65 ) (58 ) (63 )
SAP S4 upgrade expense (34 ) — (15 )
Total operating income $ 987 $ 977 $ 1,058
FOOTNOTE TABLE 1
HALLIBURTON COMPANY
Reconciliation of Net Income to Adjusted Net Income
(Millions of dollars and shares except per share data)
(Unaudited)
Three Months Ended
March 31 December 31
2024 2023 2023
Net income attributable to company $ 606 $ 651 $ 661
Adjustments:
Loss on Blue Chip Swap transactions — — 6
Other, net (a) 82 — 103
Total adjustments, before taxes 82 — 109
Tax adjustment (b) (9 ) — (1 )
Total adjustments, net of taxes (c) 73 — 108
Adjusted net income attributable to company (c) $ 679 $ 651 $ 769
Diluted weighted average common shares outstanding 891 907 897
Net income per diluted share (d) $ 0.68 $ 0.72 $ 0.74
Adjusted net income per diluted share (d) $ 0.76 $ 0.72 $ 0.86
(a) During the three months ended March 31, 2024, Halliburton incurred a charge of
$82 million primarily due to impairment of an investment in Argentina and
currency devaluation in Egypt. Halliburton incurred a loss of $103 million due
to the devaluation of the currency in Argentina during the three months ended
December 31, 2023.
(b) The tax adjustment in the table above includes the tax effect on the
impairment of an investment in Argentina and Egypt currency impact during the
three months ended March 31, 2024. During the three months ended December 31,
2023 the tax adjustment includes the tax effect on the Argentina currency
impact. Additionally, during the three months ended December 31, 2023, the tax
adjustment also includes the loss on Blue Chip Swap transactions.
(c) Adjusted net income attributable to company is a non-GAAP financial measure
which is calculated as: “Net income attributable to company” plus "Total
adjustments, net of taxes" for the respective periods. Management believes net
income adjusted for the Argentina and Egypt currency impact, Argentina
investment impairment, and the loss on Blue Chip Swap transactions, along with
the tax adjustment, is useful to investors to assess and understand operating
performance, especially when comparing those results with previous and
subsequent periods or forecasting performance for future periods, primarily
because management views the excluded items to be outside of the company's
normal operating results. Management analyzes net income without the impact of
these items as an indicator of performance to identify underlying trends in
the business and to establish operational goals. Total adjustments remove the
effect of these items.
(d) Net income per diluted share is calculated as: "Net income attributable to
company" divided by "Diluted weighted average common shares outstanding."
Adjusted net income per diluted share is a non-GAAP financial measure which is
calculated as: "Adjusted net income attributable to company" divided by
"Diluted weighted average common shares outstanding." Management believes
adjusted net income per diluted share is useful to investors to assess and
understand operating performance.
FOOTNOTE TABLE 2
HALLIBURTON COMPANY
Reconciliation of Cash Flows from Operating Activities to Free Cash Flow
(Millions of dollars)
(Unaudited)
Three Months Ended
March 31 December 31
2024 2023 2023
Total cash flows provided by operating activities $ 487 $ 122 $ 1,410
Capital expenditures (330 ) (268 ) (399 )
Proceeds from sales of property, plant, and equipment 49 41 59
Free cash flow (a) $ 206 $ (105 ) $ 1,070
(a) Free Cash Flow is a non-GAAP financial measure which is calculated as “Total
cash flows provided by operating activities” less “Capital expenditures”
plus “Proceeds from sales of property, plant, and equipment.” Management
believes that Free Cash Flow is a key measure to assess liquidity of the
business and is consistent with the disclosures of Halliburton's direct,
large-cap competitors.
Conference Call Details
Halliburton Company (NYSE: HAL) will host a conference call on Tuesday, April
23, 2024, to discuss its first quarter 2024 financial results. The call will
begin at 8:00 a.m. CT (9:00 a.m. ET).
Please visit the Halliburton website
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to listen to the call via live webcast. A recorded version will be available
under the same link immediately following the conclusion of the conference
call. You can also pre-register for the conference call and obtain your dial
in number and passcode by clicking here
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Investors Relations Contact
David Coleman
Investors@Halliburton.com
(mailto:investors@halliburton.com)
281-871-2688
Media Relations
Victoria Ingalls
PR@Halliburton.com
(mailto:pr@halliburton.com)
281-871-2601
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