HAL — Halliburton Company

Halliburton Company (HAL) Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Revenue: $5.4 billion, flat year-over-year.
• Operating Income: $679 million, with an operating margin of 13%.
• Net Income per Diluted Share: $0.55.
• Cash Flow from Operations: $273 million; Free Cash Flow: $123 million.
• Stock Repurchase: $100 million during the quarter.
• Segment Performance:
  • Completion and Production Division: Revenue of $3.0 billion, down 3% year-over-year; operating income of $439 million, down 17%.
  • Drilling and Evaluation Division: Revenue of $2.4 billion, up 4% year-over-year; operating income flat at $351 million.

2. Strategic Updates and Business Highlights

• International Revenue: Increased by 3% year-over-year, with notable growth in Latin America (22% increase) and Europe/Africa (11% increase).
• Middle East Operations: Challenged by conflict-related disruptions, impacting revenue and logistics costs; however, Halliburton remains engaged with clients to navigate these challenges.
• Technological Advancements: Successful deployment of Zeus electric fracturing services in Argentina and acquisition of Sekal for rig automation, enhancing operational efficiency.
• Collaborative Agreements: Strategic collaboration with PETRONAS in Suriname to support offshore asset development, showcasing Halliburton's strong market position.

3. Forward Guidance and Outlook

• Q2 2026 Expectations:
  • Middle East: Uncertain recovery timeline; estimated impact of $0.07 to $0.09 per share due to ongoing disruptions.
  • Completion and Production Division: Anticipated sequential revenue increase of 4% to 6%, with margin improvement.
  • Drilling and Evaluation Division: Expected flat to down 2% revenue, with margin decline.
• Full-Year Outlook: International business expected to grow mid- to high-single digits, driven by strong demand outside the Middle East.

4. Bad News, Challenges, or Points of Concern

• Middle East Disruptions: Ongoing conflict has led to decreased activity and increased costs, with unclear recovery timelines.
• North America Revenue Decline: 4% decrease year-over-year, primarily due to lower stimulation activity and adverse weather impacts.
• Operational Risks: The potential for further disruptions in the Middle East could affect future earnings and operational efficiency.

5. Notable Q&A Insights

• Market Dynamics: Jeffrey Miller emphasized that the supply overhang is no longer a concern, with energy security becoming a priority for nations, which could drive increased investment in oil and gas.
• North America Recovery: Early signs of recovery noted, with a shrinking "white space" in the frac calendar and increased demand from smaller operators.
• International Growth: Strong prospects in Latin America and Europe/Africa, with collaborative models yielding positive results.
• Pricing Power: Discussions around pricing are constructive, with indications that equipment availability is tightening, which could lead to improved pricing for Halliburton's services.
• VoltaGrid Technology: Positive outlook on the deployment of VoltaGrid technology internationally, with significant potential for growth.

Overall, Halliburton's Q1 2026 results reflect a mixed performance influenced by external geopolitical factors, but the company remains optimistic about future growth opportunities, particularly outside the Middle East.