Halliburton (HAL) Down 3.5% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Halliburton (HAL). Shares have lost about 3.5% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Halliburton due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. Halliburton Reports In-Line Q4 EarningsHalliburton reported fourth-quarter 2024 adjusted net income per share of 70 cents, the same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers reflect softer activity in the North American region, partly offset by improved fluid work in the Gulf of Mexico.Meanwhile, revenues of $5.6 billion were 2.2% lower year over year and missed the Zacks Consensus Estimate by $31 million.Inside Halliburton’s Regions & SegmentsNorth American revenues fell 8.7% year over year to $2.2 billion and missed our projection by 1.1%. On the other hand, revenues from Halliburton’s international operations increased $81 million from the year-ago period to $3.4 billion but failed to surpass our estimate by some $11 million. The Completion and Production segment earned $629 million in operating income, lower than last year’s $716 million but slightly above our estimate of $628 million. The decline was due to reduced stimulation activity in North America and lower pressure pumping services in Latin America. However, this was offset by higher year-end sales of completion tools and increased artificial lift activity in North America and the Middle East, along with better stimulation activity in Africa and the Middle East.The Drilling and Evaluation unit's profit dropped to $401 million in the fourth quarter of 2024 from $420 million in the same period in 2023 and fell short of our estimate of $417.5 million. The decline was caused by reduced drilling services in the Middle East and Latin America, along with lower wireline activity globally. On the positive side, the unit benefited from better fluid services in the Middle East and Europe/Africa, increased drilling services in the North Sea, and stronger international software sales.Balance SheetHalliburton reported fourth-quarter capital expenditure of $426 million, higher than our projection of $450.2 million. As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. HAL bought back $309 million worth of its stock during the October-December period. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion.Management Remarks & OutlookHalliburton's management remains optimistic about the company's long-term outlook despite expecting some softness in the North American market in 2025. The leadership highlighted the company's strong performance in 2024, with over $2.6 billion in free cash flow generated and $1.6 billion returned to shareholders.HAL plans to focus on executing its value proposition and strengthening its technology portfolio. Key growth areas include drilling technology, unconventional resources, well intervention and artificial lift. These efforts aim to drive sustained value creation for stakeholders. How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates review.The consensus estimate has shifted -13.29% due to these changes.VGM ScoresCurrently, Halliburton has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Halliburton has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.Performance of an Industry PlayerHalliburton is part of the Zacks Oil and Gas - Field Services industry. Over the past month, Schlumberger (SLB), a stock from the same industry, has gained 1.4%. The company reported its results for the quarter ended December 2024 more than a month ago.Schlumberger reported revenues of $9.28 billion in the last reported quarter, representing a year-over-year change of +3.3%. EPS of $0.92 for the same period compares with $0.86 a year ago.For the current quarter, Schlumberger is expected to post earnings of $0.74 per share, indicating a change of -1.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.Schlumberger has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Halliburton Company (HAL): Free Stock Analysis Report Schlumberger Limited (SLB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks