Halliburton Company (HAL) Q1 2026 Earnings Call Summary

1Key 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.

2Strategic 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.

3Forward 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.

4Bad 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.

5Notable 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.