Halliburton Company

(New York Stock Exchange)
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Bullish +65

Halliburton Q2 2026 Earnings Call Transcript

AI-generated analysis

πŸ“ˆ Halliburton reported Q2 2026 revenue of $5.7 billion, up 6% sequentially and 6% year-over-year.

πŸ’° Adjusted operating margin expanded to 12%, with $824 million in cash flow from operations and $668 million in free cash flow.

πŸ”„ Company repurchased approximately $200 million of common stock during the quarter.

🌍 International revenue reached $3.4 billion, a 6% year-over-year increase driven by offshore and unconventional wins.

πŸ‡ΊπŸ‡Έ North America revenue was $2.3 billion, flat year-over-year but showing sequential improvement due to stimulation activity.

πŸš€ CEO Jeff Miller highlighted energy security as a central issue, driving long-term strategic reserve rebuilding and supply diversification.

πŸ“ˆ International business is expected to grow in the low double digits this year with continued North America progress.

βš™οΈ New technology deployments include the latest Zeus iQ release for better fracture placement and simulfrac operations.

πŸ† Significant contract awards secured in Iraq, Algeria, and offshore markets strengthen the international pipeline.

πŸ“‰ Q3 revenue guidance anticipates flat to down 2% in Completion & Production and down 3-5% in Drilling & Evaluation.

πŸ“ˆ Q3 margin guidance expects C&P margins to improve by 125-175 basis points and D&E margins by 25-75 basis points.

πŸ› οΈ North America land frac business is driving improved margins, offsetting the impact of the chemical business sale.

🌊 Gulf of Mexico fluids activity increased, contributing to higher completion tool sales and operational efficiency.

πŸ”§ Middle East revenue decreased 2% sequentially due to conflict-related disruptions in Kuwait, Iraq, and Qatar.

πŸ’» Landmark digital business continues to grow with acquisitions like Sakal enhancing closed-loop drilling solutions.

πŸ“‰ Q3 corporate expenses are expected to decrease to about $80 million from $83 million in the prior quarter.

πŸ—οΈ Capital expenditures for full year 2026 are projected at approximately $1.1 billion, reflecting disciplined spending.

🌐 Halliburton operates in over 70 countries with a balanced portfolio spanning onshore, offshore, and unconventional markets.

πŸ“Š Q2 net income per diluted share was 64 cents, while adjusted net income per diluted share was 55 cents.

πŸ” Management confirmed that white space in North America has been filled, supporting a steady march toward margin expansion.

Bullish Signals
  • Halliburton delivered Q2 revenue of $5.7 billion, a 6% sequential increase and 6% year-over-year growth, demonstrating strong top-line performance.
  • Adjusted operating margin expanded to 12%, reflecting improved operational efficiency and pricing power in key markets.
  • International revenue grew 6% year-over-year to $3.4 billion, driven by significant wins in offshore, unconventional, and intervention markets.
  • The company generated robust cash flow of $824 million from operations and $668 million in free cash flow, enabling strategic capital returns.
  • Management repurchased $200 million of common stock, signaling confidence in the business and commitment to shareholder value.
  • North America land frac activity is driving improved margins, with white space filled and rig adds exceeding 30-plus rigs.
  • New technology deployments, including Zeus iQ and LOGIX automation platforms, are enhancing customer value and operational efficiency.
  • Significant contract awards in Iraq, Algeria, and offshore regions strengthen the international pipeline and long-term growth prospects.
  • Energy security concerns are driving long-term strategic reserve rebuilding, creating a durable demand tailwind for Halliburton's services.
  • Q3 margin guidance anticipates significant improvements of 125-175 basis points in Completion & Production and 25-75 basis points in Drilling & Evaluation.
Risk Factors
  • Q3 revenue guidance anticipates a decline of flat to down 2% in Completion & Production and down 3-5% in Drilling & Evaluation.
  • The sale of the chemical business has reduced top-line revenue in North America, partially offset by recovery in other regions.
  • Delays in the Gulf of Mexico, a structurally high-margin business, impacted Q2 results and may affect near-term performance.
Full Analysis
Halliburton (NYSE: HAL) reported second-quarter 2026 revenue of $5.7 billion, representing a 6% increase compared to the prior quarter and a 6% year-over-year rise. The company achieved an adjusted operating margin of 12%, generating $824 million in cash flow from operations and $668 million in free cash flow. Management repurchased approximately $200 million of common stock during the quarter, signaling confidence in its capital allocation strategy and commitment to returning value to shareholders. International revenue reached $3.4 billion, marking a 6% year-over-year increase driven by significant wins in offshore markets, unconventional resources, and intervention services. North America revenue remained flat at $2.3 billion year-over-year but showed sequential improvement, supported by higher stimulation activity in the U.S. land sector and increased fluids activity in the Gulf of Mexico. The company successfully deployed new technology, including its latest Zeus iQ release, to enhance well-by-well treatment control and simulfrac operations. Management highlighted a strong global outlook driven by energy security needs, which necessitate long-term strategic reserve rebuilding and supply diversification. CEO Jeff Miller emphasized that Halliburton's differentiated technology and value proposition are setting the stage for future revenue growth and margin expansion. The company expects international business to grow in the low double digits this year, with continued progress in North America through pricing improvements and technology deployment. Looking ahead to the third quarter, Halliburton anticipates sequential revenue to be flat to down 2% in its Completion and Production division and down 3% to 5% in Drilling and Evaluation. However, margins are expected to improve significantly, with C&P margins projected to rise by 125 to 175 basis points and D&E margins improving by 25 to 75 basis points. These improvements are driven by North America land frac business recovery, lift business growth, completion tool delivery in the Gulf of Mexico, and a Middle East recovery in C&P and Drilling & Evaluation.