Market Overview

Halliburton Announces Fourth Quarter 2018 Results

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  • Reported income from continuing operations of $0.76 per diluted share
  • Adjusted income from continuing operations of $0.41 per diluted share,
    excluding a tax benefit related to a strategic change in the company's
    corporate structure

Halliburton Company (NYSE:HAL) announced today income from continuing
operations of $664 million, or $0.76 per diluted share, for the fourth
quarter of 2018. This compares to income from continuing operations for
the third quarter of 2018 of $435 million, or $0.50 per diluted share.
Adjusted income from continuing operations for the fourth quarter of
2018, excluding a tax benefit related to a strategic change in the
company's corporate structure, was $358 million, or $0.41 per diluted
share. Halliburton's total revenue in the fourth quarter of 2018 was
$5.9 billion, a 4% decrease from revenue of $6.2 billion in the third
quarter of 2018. Operating income was $608 million during the fourth
quarter of 2018, a 15% decrease compared to operating income of $716
million in the third quarter of 2018.

Total revenue for the full year of 2018 was $24.0 billion, an increase
of $3.4 billion, or 16%, from 2017. Reported operating income for 2018
was $2.5 billion, compared to a reported operating income of $1.4
billion for 2017. Excluding special items, adjusted operating income for
2018 was $2.7 billion, a 35% improvement from adjusted operating income
of $2.0 billion for 2017.

"I am pleased with our overall financial results for the year and for
the fourth quarter. Our team optimized our performance in North America
as the market softened, and the recovery of our international business
continued," commented Jeff Miller, Chairman, President and CEO.

"The trajectory of this cycle has been far from smooth. As expected, in
North America, the demand for completion services decreased during the
fourth quarter, leading to lower pricing for hydraulic fracturing
services.

"Our international business continues to show signs of a steady
recovery, with revenue increasing 7% sequentially, underscoring the
versatility and global reach of our business portfolio.

"As North American oil production reaches historic highs, operators
focus on returns over growth, and the international recovery continues,
Halliburton is well prepared to thrive. We intend to dynamically respond
to the changing market environment, reduce capital spending, develop
differentiating technologies, and generate strong cash flow.

"Halliburton celebrates 100 years of service in 2019. As we enter our
next century, we will remain focused on collaborating with our customers
and engineering solutions to maximize their asset value, and on
delivering strong cash flow and industry-leading returns for our
shareholders," concluded Miller.

Operating Segments

Completion and Production

Completion and Production revenue in the fourth quarter of 2018 was $3.8
billion, a decrease of $338 million, or 8%, when compared to the third
quarter of 2018, while operating income was $496 million, a sequential
decrease of $117 million, or 19%. These declines were primarily driven
by lower activity and pricing for stimulation services in North America,
partially offset by stimulation activity increases in Argentina and
year-end completion tool sales internationally.

Drilling and Evaluation

Drilling and Evaluation revenue in the fourth quarter of 2018 was $2.1
billion, an increase of $102 million, or 5%, when compared to the third
quarter of 2018, while operating income was $185 million, a sequential
increase of $4 million, or 2%. These increases were primarily due to
year-end software sales, increased fluids activity in the Gulf of
Mexico, and improved project management activity in Latin America. These
improvements were partially offset by reduced drilling activity in the
Western Hemisphere.

Geographic Regions

North America

North America revenue in the fourth quarter of 2018 was $3.3 billion, an
11% decrease sequentially. This decrease was primarily driven by lower
activity and pricing in stimulation services, partially offset by higher
fluids activity in the Gulf of Mexico.

International

International revenue in the fourth quarter of 2018 was $2.6 billion, a
7% increase sequentially, resulting primarily from increased year-end
product and software sales in Middle East/Asia and Latin America,
partially offset by a seasonal decline in pipeline services in
Europe/Africa/CIS.

Latin America revenue in the fourth quarter of 2018 was $607 million, a
16% increase sequentially, resulting primarily from year-end software
and completion tool sales and higher stimulation activity across the
region, coupled with improved activity across multiple product service
lines in Mexico.

Europe/Africa/CIS revenue in the fourth quarter of 2018 was $746
million, relatively flat sequentially, primarily driven by a seasonal
decline in pipeline services across the region, coupled with decreased
activity across multiple product service lines in the North Sea. These
results were partially offset by year-end completion tool sales in Ghana
and Nigeria.

Middle East/Asia revenue in the fourth quarter of 2018 was $1.2 billion,
an 8% increase sequentially, largely resulting from year-end completion
tool sales in the Middle East, coupled with higher project management
activity throughout the region.

Corporate and Other Events

During the fourth quarter of 2018, Halliburton recognized the impact of
a strategic change in the company's corporate structure, which resulted
in a net tax benefit of $306 million, or $0.35 per diluted share.

During the fourth quarter of 2018, Halliburton repurchased $200 million
of common stock.

Selective Technology & Highlights

  • Halliburton won three World Oil Awards in 2018. Its Voice of the
    Oilfield™ solution won the "Best Digital Transformation Award," while
    its BaraOmni™ Hybrid Separation System and Global Rapid Intervention
    Package (GRIP™) won "Best Health, Safety, Environment/Sustainable
    Development Award" for both the onshore and offshore categories,
    respectively. In addition, Halliburton was a finalist in five other
    award categories.
  • Halliburton unveiled Cerebro™ in-bit sensor package, a new technology
    that obtains performance data directly from the drill bit and analyzes
    it to optimize cutter engagement, reduce uncertainty, and increase
    drilling efficiency. This new service improves data measurement and
    overall drilling performance.
  • Halliburton released the Illusion® Spire, the first fluid efficient
    dissolvable frac plug. The Illusion Spire plug is designed with a
    water saving element, so that operators can pump faster and reduce
    completion time.
  • In December 2018, Halliburton acquired SmartFibres, an industry leader
    in the development, design and manufacturing of downhole fiber optic
    pressure gauges. The addition of SmartFibres strengthens Halliburton's
    production enhancement portfolio, providing a distinct advantage
    within the fiber optic space in both unconventional and mature fields.
  • Halliburton announced it has signed two contracts with Eni Iraq BV
    (Eni) to provide integrated drilling services at Eni's Zubair Oil
    Field in Southern Iraq. Under the contracts, Halliburton will mobilize
    four to six rigs to drill development wells over the next two years.

About Halliburton

Founded in 1919, Halliburton celebrates its 100 years of service as one
of the world's largest providers of products and services to the energy
industry. With 60,000 employees, representing 140 nationalities in more
than 80 countries, the company helps its customers maximize value
throughout the lifecycle of the reservoir — from locating hydrocarbons
and managing geological data, to drilling and formation evaluation, well
construction and completion, and optimizing production throughout the
life of the asset. Visit the company's website at www.halliburton.com.
Connect with Halliburton on Facebook,
Twitter,
LinkedIn,
Instagram
and YouTube.

NOTE: The statements in this press release that are not historical
statements, including statements regarding future financial performance,
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: the continuation or suspension of our
stock repurchase program, the amount, the timing and the trading prices
of Halliburton common stock, and the availability and alternative uses
of cash; changes in the demand for or price of oil and/or natural gas;
potential catastrophic events related to our operations, and related
indemnification and insurance matters; protection of intellectual
property rights and against cyber-attacks; compliance with environmental
laws; changes in government regulations and regulatory requirements,
particularly those related to oil and natural gas exploration,
radioactive sources, explosives, chemicals, hydraulic fracturing
services, and climate-related initiatives; the impact of federal tax
reform, compliance with laws related to income taxes and assumptions
regarding the generation of future taxable income; risks of
international operations, including risks relating to unsettled
political conditions, war, 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; changes in capital spending by customers; delays or failures by
customers to make payments owed to us; execution of long-term,
fixed-price contracts; structural changes and infrastructure issues in
the oil and natural gas industry; maintaining a highly skilled
workforce; availability and cost of raw materials; agreement with
respect to and completion of potential acquisitions and integration and
success of acquired businesses and operations of joint ventures.
Halliburton's Form 10-K for the year ended December 31, 2017, Form 10-Q
for the quarter ended September 30, 2018, 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
December 31     September 30
        2018     2017     2018
Revenue:
Completion and Production $ 3,832 $ 3,804 $ 4,170
Drilling and Evaluation       2,104         2,136         2,002  
Total revenue       $ 5,936         $ 5,940         $ 6,172  
Operating income:
Completion and Production $ 496 $ 554 $ 613
Drilling and Evaluation 185 293
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