Halliburton Company (HAL) 2024 Q2 Earnings Call Summary
July 19, 2024 
Halliburton Company (HAL)
| Market Cap | 0.21T |
|---|---|
| Beta | |
| P/E | 39.75452774136047 |
| EPS | 12.247158441111395 |
| Dividend | 0 |
| Dividend Yield | 0.00% |
Optimistic Highlights
- Strong International Business and North America Service Offerings: Halliburton reported solid Q2 results, showcasing the strength of its international business and the differentiation of its North America service offerings.
- International Revenue Growth: International revenue grew 8% year-over-year, marking the 12th consecutive quarter of year-on-year growth in the international business.
- Innovative Product Lines: Highlighted growth in Landmark Software, artificial lift product line, and drilling services, particularly in unconventional drilling with the iCruise X rotary steerable system and LOGIX autonomous drilling platform.
- Cash Flow and Stock Repurchase: Generated $1.1 billion of cash flow from operations and about $800 million of free cash flow, with $250 million repurchased in common stock.
- Technology Investments: Investments in differentiated drilling technology and the latest addition to Octiv, part of the ZEUS platform, are expected to drive above-market growth.
Pessimistic Highlights
- North America Revenue Decline: North America revenue decreased by 8% year-over-year, attributed to a 12% decline in rig count over the same period.
- Lowered North America Revenue Outlook: Full-year North America revenues are now expected to decline 6% to 8% versus last year, driven by lower activity.
- Retirement of Fleets: Halliburton retired a few fleets in Q2 as part of its strategy to prioritize returns over market share.
Company Outlook
- International Business Growth: Halliburton expects its international business to deliver about 10% revenue growth for the full year, with strong demand for services, high activity levels, and equipment tightness across major basins.
- North America Market Strategy: Despite the current downturn, Halliburton remains committed to its strategy to maximize value in North America, expecting activity to be directionally higher than the second half of 2024.
- Free Cash Flow Growth: Halliburton is on track to deliver over 10% free cash flow growth this year.
Q & A Highlights
Q: Can you discuss the re-contracting of e-fleets and pricing dynamics? (Dave Anderson, Barclays)
A: Demand for e-fleets remains strong, with contracts extending into 2025. Halliburton is confident in the value these fleets create, leading to repeat business with customers. (Jeff Miller)
Q: How do you view international spending trends and growth prospects for 2025? (Arun Jayaram, JPMorgan)
A: International spending trends look strong for 2025, with meaningful work and growth expected across various regions, driven by both NOCs and IOCs. (Jeff Miller)
Q: What could form the bottom in North America activity, and are there any signs of recovery? (Neil Mehta, Goldman Sachs)
A: The bottom in activity could be formed by an increase in activity after E&P companies complete acquisitions and establish new development plans, divestment of assets to smaller operators, and some recovery in natural gas activity. (Jeff Miller)
Q: Can you discuss the adoption of iCruise in North America and its impact? (James West, Evercore ISI)
A: Adoption of iCruise in North America is strong, with significant value creation and efficiency improvements for customers. Halliburton is excited about the market adoption and the technology's potential. (Jeff Miller)
Q: How do you view the margin expansion opportunity in the Drilling and Evaluation division? (Saurabh Pant, Bank of America)
A: Halliburton continues to improve margins in the Drilling and Evaluation division, with expectations for continued growth into 2025, driven by the adoption of new drilling technologies. (Eric Carre)