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Halliburton posts 3Q financial results; estimates substantial growth

Halliburton

Halliburton, the leading provider of hydraulic fracturing services to the US market, posted its third-quarter financial results this Tuesday. The company secured its third consecutive quarterly profit and said customer spending in the United States could jump 20% next year.

Firstly, rallying oil prices has prompted more drillers to go out in the field and conduct exploration activities, which in turn increases demand for oilfield services. Moreover, with Brent trading around $84.4 a barrel, companies like Halliburton see the potential for growth.

As we have reported previously, Oil prices have rallied to multiyear highs. Brent, particularly, has gone up 63% so far this year; while the US mix is at roughly $82.5 a barrel, up 70% over the same period. Also, the oil rig count has risen sharply, surpassing the 500 last week.

Furthermore, the number of active US hydraulic fracturing fleets climbed to 263 in early October, up from around 100 a year ago, according to data from Primary Vision, reviewed by Reuters.

As a result, demand for oilfield services like those Halliburton offers has increased. The company’s Chief Executive Officer Jeff Miller said about the matter. “I see a multiyear upcycle unfolding. Structural global commodity tightness drives increased demand for our services, both internationally and in North America.”

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Halliburton experiences shares boost after 3Q results post

He also remarked quoted by Reuters. “We expect customers to drill more new wells to offset steep decline rate.” He added that companies had begun the tender process for equipment early amid a tight market.

Consequently, Halliburton’s results surpassed expectations from analysts. It posted an adjusted net income of $248 million, or 28 cents per share, in the three months ended Sept. 30. This was up from the $100 million or 11 cents per share reported a year earlier.

In addition, the company reported revenue of $3.86 billion. Slightly under consensus expectations of $3.912 billion, according to Refinitiv IBES. The results also surpassed the company’s expectations, as it previously downgraded its 3Q estimations after Hurricane Ida, which caused unexpected downtime in the US Gulf of Mexico.

However, Wall Street analysts said Halliburton’s results were neutral to slightly negative, as some financial metrics came in under estimates. Nevertheless, they lauded the company’s report of $469 million in free cash flow, which topped expectations.

Finally, soon after the post, the company’s shares were up 1.2% midday at $26.32; after falling more than 2% in morning activity. They are up 39% year-to-date, trailing gains seen in oil prices.

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