- Net income of $0.26 per diluted share
- Cash flow from operating activities of $409 million and free
cash flow of $265 million
Halliburton Company (NYSE: HAL) announced today net income of
$227 million, or $0.26 per diluted share, for the second quarter of
2021. This compares to net income for the first quarter of 2021 of
$170 million, or $0.19 per diluted share. Halliburton's total
revenue for the second quarter of 2021 was $3.7 billion, compared
to revenue of $3.5 billion in the first quarter of 2021. Operating
income was $434 million in the second quarter of 2021 compared to
operating income of $370 million in the first quarter of 2021.
“Our second quarter performance demonstrates that our strategy
is working well and Halliburton’s strategic priorities are driving
value in this transition year. Total company revenue increased 7%
sequentially, as both North America and international markets
continued to improve, and operating income grew 17% with solid
margin performance in both divisions,” commented Jeff Miller,
Chairman, President and CEO.
“Halliburton’s Completion and Production division margin reached
three-year highs, while our Drilling and Evaluation division margin
outperformed expectations, setting both divisions up for robust
margin growth this year.
“Our solid free cash flow generation further demonstrates the
effectiveness of our strategy to strengthen the cash flow profile
of our business.
“The positive activity momentum we see in North America and
international markets today, combined with our expectations for
future customer demand, gives us conviction for an unfolding
multi-year upcycle.
“Halliburton’s value proposition, unique exposure to both
international and North America markets, and differentiated
technologies across an integrated services portfolio solidify our
sustainable competitive advantage, and deliver strong free cash
flow and industry-leading returns,” concluded Miller.
Operating Segments
Completion and Production
Completion and Production revenue in the second quarter of 2021
was $2 billion, an increase of $178 million, or 10%, when compared
to the first quarter of 2021, while operating income was $317
million, an increase of $65 million, or 26%. These results were
driven by increased activity across multiple product service lines
in North America land, higher cementing activity in the Eastern
Hemisphere and Latin America, increased completion tools sales in
the Middle East, the North Sea, and Latin America, as well as
higher well intervention services in Saudi Arabia and Algeria.
Partially offsetting these improvements was lower stimulation
activity in Latin America.
Drilling and Evaluation
Drilling and Evaluation revenue in the second quarter of 2021
was $1.7 billion, an increase of $78 million, or 5%, when compared
to the first quarter of 2021, while operating income was $175
million, an increase of $4 million, or 2%. These results were due
to improved drilling-related services and wireline activity across
all regions, along with increased testing services in the Eastern
Hemisphere. Partially offsetting these increases were reduced
software sales globally.
Geographic Regions
North America
North America revenue in the second quarter of 2021 was $1.6
billion, a 12% increase when compared to the first quarter of 2021.
This increase was primarily driven by higher pressure pumping
services, drilling-related services, and wireline activity in North
America land, as well as higher well construction activity in the
Gulf of Mexico. Partially offsetting these increases were reduced
software sales across the region.
International
International revenue in the second quarter of 2021 was $2.1
billion, a 4% increase when compared to the first quarter of 2021.
This improvement was primarily driven by higher well construction
activity, completion tools sales, and well intervention services
across all regions. Partially offsetting these increases were lower
software sales across all regions and decreased stimulation
activity in Latin America.
Latin America revenue in the second quarter of 2021 was $534
million, flat sequentially. Increased activity in multiple product
service lines in Mexico, higher fluid services in Brazil, as well
as additional completion tools sales in Guyana, were offset by
reduced stimulation activity in Argentina, Mexico, and Brazil,
lower software sales across the region, and decreased project
management activity in Mexico and Ecuador.
Europe/Africa/CIS revenue in the second quarter of 2021 was $679
million, a 7% increase sequentially, resulting from increased
activity across multiple product service lines in Russia, Norway,
Algeria, and Ghana. These increases were partially offset by lower
software sales across the region and lower activity in Nigeria.
Middle East/Asia revenue in the second quarter of 2021 was $925
million, a 5% increase sequentially, resulting from improved
activity in multiple product service lines in Saudi Arabia, higher
well intervention services across the region, increased
drilling-related services in Oman, higher completion tools sales in
Kuwait, higher well construction activity in Australia, and
increased pipeline services in China. These improvements were
partially offset by lower software sales across the region, lower
project management activity in India, and lower activity in
Bangladesh.
Selective Technology &
Highlights
- Halliburton announced StrataXaminer™, a new wireline logging
service that helps operators acquire more accurate well data to
better evaluate production potential. Obtaining high resolution
images in oil or synthetic-based fluid systems has been an industry
challenge for decades. StrataXaminer delivers high-resolution
images of the reservoir structure to identify bedding, fracture
patterns, fault zones, and potential flow barriers with increased
accuracy.
- Halliburton and TGS-NOPEC Geophysical ASA announced a
collaboration to bring advanced seismic imaging to fiber optic
sensing. The alliance will provide operators with advanced insight
to determine their reservoir potential for oil and gas production
or carbon storage. The Halliburton FiberVSP™ and Odassea™
distributed acoustic sensing solutions will now incorporate TGS’s
seismic imaging workflows that process the entire seismic wavefield
to generate high-resolution reservoir images.
- Halliburton was awarded a contract from Kuwait Oil Company
(KOC), a world leader in digital transformation, to expand KOC’s
digital transformation journey by implementing solutions to
maximize operational efficiency and increase production. The scope
applies to all Kuwait fields including West Kuwait, South and East
Kuwait, and Heavy Oil, complementing a recently awarded contract
for similar services in North Kuwait.
- Halliburton Labs announced four new companies that join four
companies already participating in its collaborative environment to
advance and scale cleaner, affordable energy. Alumina Energy,
Ionada, Parasanti, and SurgePower Materials receive access to a
broad range of industrial capabilities, technical expertise, and
mentorship to scale their businesses.
- Halliburton announced it will redeem, with cash on hand, the
remaining $500 million outstanding principal amount of its 3.25%
Senior Notes due 2021 on August 15, 2021.
- Halliburton was awarded a contract from Petronas for a well
construction program involving six wells in offshore East Malaysia.
Halliburton will deliver these wells in collaboration with Sapura
Drilling using its state-of-the-art Halliburton 4.0 digital
platform. Deployed digital technologies will include the complete
suite of Digital Well Program®, Digital Well Operations, and
Digital Well Automation - all DecisionSpace® 365 cloud
applications. The scope of work also includes key digital
technologies from Sperry Drilling, Cementing, Drill Bits, Baroid,
and Completions product lines. The campaign is the first integrated
project of its kind in Malaysia, combining rig services with all
aspects of planning, operations, and automation.
- Halliburton was awarded a contract from Ecopetrol to
collaborate on their digital transformation strategy for drilling
and completions, including the digitalization of the well delivery
process. This enables Ecopetrol to optimize their planning, design,
and well execution end-to-end and accelerate value creation across
the asset lifecycle.
- Halliburton announced that it won a contract to provide
Production Chemicals and Associated Services for a large IOC in
Oman. Under the seven-year contract, Halliburton will supply a full
suite of customized products along with specialized services to
support the in-field chemical treatments.
- TechnipFMC and Halliburton announced they received an OTC
Spotlight on New Technology Award® (SONT) for their Odassea™ Subsea
Fiber Optic Solution, an advanced downhole fiber optic sensing
system. ExxonMobil selected the solution for its Payara development
project in Guyana. The award followed completion of front-end
engineering and design studies and qualifications. The Odassea
service integrates hardware and digital systems to strengthen
capabilities in subsea reservoir monitoring and production
optimization. Halliburton provides the fiber optic sensing
technology and analysis for reservoir diagnostics. TechnipFMC
provides the optical connectivity from the topside to the
completions.
- Halliburton announced an expansion of its digital collaboration
with Aker BP, a Norwegian oil and gas exploration and production
company, by deploying digital twins to automate work processes and
accelerate decision-making. Aker BP is using Digital Well Program®,
a DecisionSpace® 365 cloud application, that turns well planning
and design into a live process where field development scenarios
are continuously updated and compared to a digital twin to deliver
safe, cost-effective, and productive wells.
- Halliburton signed a contract with Petrofac, an international
service provider to the energy industry, to adopt Digital Well
Program®, a DecisionSpace® 365 cloud application, to automate
drilling, completions, and engineering processes. The three-year
contract enables Petrofac to incorporate artificial intelligence,
machine learning, and data science to optimize its well engineering
service offering.
About Halliburton
Founded in 1919, Halliburton is one of the world's largest
providers of products and services to the energy industry. With
more than 40,000 employees, representing 130 nationalities in more
than 70 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.
Forward-looking
Statements
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
impact of COVID-19 and any variants, the related economic
repercussions and resulting negative impact on demand for oil and
gas, operational challenges relating to COVID-19 and efforts to
mitigate the spread of the virus, including logistical challenges,
protecting the health and well-being of our employees, remote work
arrangements, performance of contracts and supply chain
disruptions; the ability of the OPEC+ countries to agree on and
comply with supply limitations; 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; 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, and the resulting impact on our liquidity; 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 dispositions, acquisitions and integration and success of
acquired businesses and operations of joint ventures. Halliburton's
Form 10-K for the year ended December 31, 2020, Form 10-Q for the
quarter ended March 31, 2021, 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
June 30
March 31
2021
2020
2021
Revenue:
Completion and Production
$
2,048
$
1,672
$
1,870
Drilling and Evaluation
1,659
1,524
1,581
Total revenue
$
3,707
$
3,196
$
3,451
Operating income (loss):
Completion and Production
$
317
$
159
$
252
Drilling and Evaluation
175
127
171
Corporate and other
(58
)
(50
)
(53
)
Impairments and other charges
—
(2,147
)
—
Total operating income (loss)
434
(1,911
)
370
Interest expense, net
(120
)
(124
)
(125
)
Other, net
(19
)
(48
)
(22
)
Income (loss) before income
taxes
295
(2,083
)
223
Income tax benefit (provision) (a)
(65
)
402
(52
)
Net Income (loss)
$
230
$
(1,681
)
$
171
Net (Income) loss attributable to
noncontrolling interest
(3
)
5
(1
)
Net Income (loss) attributable to
company
$
227
$
(1,676
)
$
170
Basic and diluted net income (loss) per
share
$
0.26
$
(1.91
)
$
0.19
Basic and diluted weighted average common
shares outstanding
890
877
889
(a)
During the three months ended June 30,
2020 the tax benefit includes the tax effect on impairments and
other charges.
HALLIBURTON COMPANY
Condensed Consolidated Statements
of Operations
(Millions of dollars and shares
except per share data)
(Unaudited)
Six Months Ended
June 30
2021
2020
Revenue:
Completion and Production
$
3,918
$
4,634
Drilling and Evaluation
3,240
3,599
Total revenue
$
7,158
$
8,233
Operating income (loss):
Completion and Production
$
569
$
504
Drilling and Evaluation
346
344
Corporate and other
(111
)
(110
)
Impairments and other charges
—
(3,220
)
Total operating income (loss)
804
(2,482
)
Interest expense, net
(245
)
(258
)
Loss on early extinguishment of debt
(a)
—
(168
)
Other, net
(41
)
(71
)
Income (loss) before income
taxes
518
(2,979
)
Income tax benefit (provision) (b)
(117
)
283
Net Income (loss)
$
401
$
(2,696
)
Net (Income) loss attributable to
noncontrolling interest
(4
)
3
Net Income (loss) attributable to
company
$
397
$
(2,693
)
Basic and diluted net income (loss) per
share
$
0.45
$
(3.07
)
Basic and diluted weighted average common
shares outstanding
889
877
(a)
During the six months ended June 30, 2020,
Halliburton recognized a $168 million loss on extinguishment of
debt related to the early redemption of $1.5 billion aggregate
principal amount of senior notes.
(b)
The tax benefit during the six months
ended June 30, 2020 includes the tax effect on impairment and other
charges. Additionally, during the six months ended June 30, 2020,
Halliburton recognized a $310 million tax expense associated with a
valuation allowance on its deferred tax assets based on current
market conditions and the expected impact on the Company's business
outlook.
HALLIBURTON COMPANY
Condensed Consolidated Balance
Sheets
(Millions of dollars)
(Unaudited)
June 30
December 31
2021
2020
Assets
Current assets:
Cash and equivalents
$
2,658
$
2,563
Receivables, net
3,459
3,071
Inventories
2,355
2,349
Other current assets
1,455
1,492
Total current assets
9,927
9,475
Property, plant, and equipment, net
4,214
4,325
Goodwill
2,804
2,804
Deferred income taxes
2,174
2,166
Operating lease right-of-use assets
735
786
Other assets
1,063
1,124
Total assets
$
20,917
$
20,680
Liabilities and Shareholders’
Equity
Current liabilities:
Accounts payable
$
1,891
$
1,573
Accrued employee compensation and
benefits
528
517
Current maturities of long-term debt
515
695
Current portion of operating lease
liabilities
247
251
Other current liabilities
1,153
1,385
Total current liabilities
4,334
4,421
Long-term debt
9,124
9,132
Operating lease liabilities
688
758
Employee compensation and benefits
536
562
Other liabilities
806
824
Total liabilities
15,488
15,697
Company shareholders’ equity
5,420
4,974
Noncontrolling interest in consolidated
subsidiaries
9
9
Total shareholders’ equity
5,429
4,983
Total liabilities and shareholders’
equity
$
20,917
$
20,680
HALLIBURTON COMPANY
Condensed Consolidated Statements
of Cash Flows
(Millions of dollars)
(Unaudited)
Six Months Ended
Three Months Ended
June 30
June 30
2021
2020
2021
Cash flows from operating
activities:
Net Income (loss)
$
401
$
(2,696
)
$
230
Adjustments to reconcile net income (loss)
to cash flows from operating activities:
Impairments and other charges
—
3,220
—
Depreciation, depletion, and
amortization
449
599
223
Working capital (a)
11
296
(48
)
Deferred income tax benefit
—
(353
)
13
Other operating activities
(249
)
(243
)
(9
)
Total cash flows provided by operating
activities
612
823
409
Cash flows from investing
activities:
Capital expenditures
(295
)
(355
)
(191
)
Proceeds from sales of property, plant,
and equipment
105
122
47
Other investing activities
(31
)
(48
)
(15
)
Total cash flows used in investing
activities
(221
)
(281
)
(159
)
Cash flows from financing
activities:
Payments on long-term borrowings
(192
)
(1,653
)
(4
)
Proceeds from issuance of long-term debt,
net
—
994
—
Dividends to shareholders
(80
)
(198
)
(40
)
Stock repurchase program
—
(100
)
—
Other financing activities
4
20
(1
)
Total cash flows used in financing
activities
(268
)
(937
)
(45
)
Effect of exchange rate changes on
cash
(28
)
(62
)
7
Increase (decrease) in cash and
equivalents
95
(457
)
212
Cash and equivalents at beginning of
period
2,563
2,268
2,446
Cash and equivalents at end of
period
$
2,658
$
1,811
$
2,658
(a)
Working capital includes receivables,
inventories, and accounts payable.
See Footnote Table 1 for Reconciliation of
Cash Flows from Operating Activities to Free Cash Flow
HALLIBURTON COMPANY
Revenue and Operating Income
(Loss) Comparison
By Operating Segment and
Geographic Region
(Millions of dollars)
(Unaudited)
Three Months Ended
June 30
March 31
Revenue
2021
2020
2021
By operating segment:
Completion and Production
$
2,048
$
1,672
$
1,870
Drilling and Evaluation
1,659
1,524
1,581
Total revenue
$
3,707
$
3,196
$
3,451
By geographic region:
North America
$
1,569
$
1,049
$
1,404
Latin America
534
346
535
Europe/Africa/CIS
679
691
634
Middle East/Asia
925
1,110
878
Total revenue
$
3,707
$
3,196
$
3,451
Operating Income
(Loss)
By operating segment:
Completion and Production
$
317
$
159
$
252
Drilling and Evaluation
175
127
171
Total
492
286
423
Corporate and other
(58
)
(50
)
(53
)
Impairments and other charges
—
(2,147
)
—
Total operating income (loss)
$
434
$
(1,911
)
$
370
HALLIBURTON COMPANY
Revenue and Operating Income
(Loss) Comparison
By Operating Segment and
Geographic Region
(Millions of dollars)
(Unaudited)
Six Months Ended
June 30
Revenue
2021
2020
By operating segment:
Completion and Production
$
3,918
$
4,634
Drilling and Evaluation
3,240
3,599
Total revenue
$
7,158
$
8,233
By geographic region:
North America
$
2,973
$
3,509
Latin America
1,069
862
Europe/Africa/CIS
1,313
1,522
Middle East/Asia
1,803
2,340
Total revenue
$
7,158
$
8,233
Operating Income
(Loss)
By operating segment:
Completion and Production
$
569
$
504
Drilling and Evaluation
346
344
Total
915
848
Corporate and other
(111
)
(110
)
Impairments and other charges
—
(3,220
)
Total operating income (loss)
$
804
$
(2,482
)
FOOTNOTE TABLE 1
HALLIBURTON COMPANY
Reconciliation of Cash Flows from
Operating Activities to Free Cash Flow
(Millions of dollars)
(Unaudited)
Six Months Ended
Three Months Ended
June 30
June 30
2021
2020
2021
Total cash flows provided by operating
activities
$
612
$
823
$
409
Capital expenditures
(295
)
(355
)
(191
)
Proceeds from sales of property, plant,
and equipment
105
122
47
Free cash flow (a)
$
422
$
590
$
265
(a)
The Free Cash Flow metric is a non-GAAP
financial measure, which is calculated as “Total cash flows
provided by operating activities” less “Capital expenditures” plus
“Proceeds from sales of property, plant, and equipment.” Management
believes that Free Cash Flow is a key measure to assess liquidity
of the business and is consistent with the disclosures of our
direct, large-cap competitors. Prior periods presented are
consistent with this metric.
Conference Call Details
Halliburton Company (NYSE: HAL) will host a conference call on
Tuesday, July 20, 2021, to discuss its second quarter 2021
financial results. The call will begin at 8:00 AM Central Time
(9:00 AM Eastern Time).
Please visit the website to listen to the call via live webcast.
You may also participate in the call by dialing (844) 358-9181
within North America or +1 (478) 219-0188 outside of North America.
A passcode is not required. Attendees should log in to the webcast
or dial in approximately 15 minutes prior to the start of the
call.
A replay of the conference call will be available on
Halliburton’s website until July 27, 2021. Also, a replay may be
accessed by telephone at (855) 859-2056 within North America or +1
(404) 537-3406 outside of North America, using the passcode
9429544.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210720005193/en/
For Investors: Abu Zeya Halliburton, Investor Relations
Investors@Halliburton.com
281-871-2688
For News Media: Emily Mir Halliburton, External Affairs
PR@Halliburton.com 281-871-2601
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