Halliburton tops profit estimates, upbeat on overseas growth

By Seher Dareen

(Reuters) – Halliburton (NYSE:) beat quarterly profit expectations on Tuesday, helped by strength in its drilling and evaluation business, especially in overseas markets, sending its shares up more than 2%.

With a better economic environment and acreages internationally, oilfield services are setting their sights outside the United States to grow, with the North American segment dominated by higher efficiencies but fewer wells.

The company’s international revenue was boosted by improved activity in the Middle East, in line with larger rival SLB, which beat analysts’ estimates for quarterly profit last week.

“In 2024, we expect international E&P spending to grow at a low double-digit pace … we believe the Middle East/Asia region will likely experience the greatest increases in activity with other regions closely behind,” Chief Executive Jeff Miller said during a post-earnings call.

Though revenue from North America fell in the fourth quarter, the top U.S. fracking service provider said it expects strong business in the region in 2024 due to “stable levels” of activity and contracted nature of its portfolio.

“Halliburton has viewed NAM for a while as a cash flow machine and while activity is likely flattish it remains at elevated levels,” said James West, a senior managing director at Evercore ISI.

However, he warned that “we do not expect the same amount of production growth in 2024 as the industry experienced in 2023.”

Halliburton said it expects lower revenues in the first quarter on weather-related seasonality.

The company said it returned $1.4 billion of cash to shareholders in 2023 through stock repurchases and dividends, which represents over 60% of its free cash flow, and plans to return over 50% in 2024.

The Houston-based company’s adjusted net income was 86 cents per share for the three months ended Dec. 31, higher than 80 cents expected by LSEG analysts.