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Halliburton Company HAL is set to release first-quarter results on Apr 25. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 67 cents per share on revenues of $5.5 billion.
Let’s delve into the factors that might have influenced the oilfield service firm’s performance in the March quarter. But it’s worth taking a look at HAL’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last reported quarter, this Houston, TX-based provider of technical products and services to drillers of oil and gas wells beat the consensus mark on stronger-than-expected profit from both its divisions. Halliburton had reported adjusted net income per share of 72 cents, higher than the Zacks Consensus Estimate of 67 cents. Revenues of $5.6 billion also came just ahead of the Zacks Consensus Estimate by some $6 million.
HAL beat the Zacks Consensus Estimate in three of the last four quarters and met in the other, which resulted in an earnings surprise of 5.9%, on average. This is depicted in the graph below:
Halliburton Company Price and EPS Surprise
Halliburton Company price-eps-surprise | Halliburton Company Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the first-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 91.4% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 28.4% increase from the year-ago period.
Factors to Consider
Despite pulling back from their multi-year highs, oil prices have remained robust due to stable demand and geopolitical tensions. Consequently, drilling activity — an important factor for services companies — has been picking up. In the United States, a region on which Halliburton is highly dependent, rig count at the end of the first quarter was 755 compared with 670 a year back. This is in sync with the stability in commodity prices.
The number of active units in Canada and international markets has gained sharply too. The steady growth in rig count is an encouraging indicator of contracting activity.
Considering the improved operating environment, the Zacks Consensus Estimate for the first-quarter operating income of Completion & Production, and Drilling & Evaluation is pegged at $629 million and $362 million, respectively, indicating an increase of 112.5% and 23.1% year over year.
On a somewhat bearish note, the increase in HAL’s costs might have dented the company’s to-be-reported bottom line. The company’s fourth-quarter cost of sales totaled $4.5 billion, up 23.9% from the year-ago period. The upward cost trajectory is likely to have continued in the first quarter due to the prevailing inflationary environment.
What Does Our Model Say?
The proven Zacks model does not conclusively show that HAL is likely to beat estimates in the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -0.77%.
Zacks Rank: Halliburton currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Halliburton, here are some firms from the energy space that you may want to consider on the basis of our model:
Marathon Petroleum MPC has an Earnings ESP of +11.24% and a Zacks Rank #1. The firm is scheduled to release earnings on May 2.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MPC’s 2023 earnings has been revised 15.3% upward over the past 60 days. Valued at around $57.5 billion, Marathon Petroleum has gained 39.2% in a year.
Murphy Oil MUR has an Earnings ESP of +12.67% and a Zacks Rank #3. The firm is scheduled to release earnings on May 3.
For 2023, Murphy Oil has a projected earnings growth rate of 4.7%. Valued at around $6.1 billion, MUR has lost 12.7% in a year.
TechnipFMC FTI has an Earnings ESP of +3.71% and a Zacks Rank #3. The firm is scheduled to release earnings on Apr 27.
For 2023, TechnipFMC has a projected earnings growth rate of 1,766.7%. Valued at around $5.9 billion, FTI has gained 52% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Halliburton Company (HAL) : Free Stock Analysis Report
TechnipFMC plc (FTI) : Free Stock Analysis Report
Murphy Oil Corporation (MUR) : Free Stock Analysis Report
Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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