Halliburton Company (NYSE:HAL) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings report presents a mixed picture with several negative factors. Financial performance shows a decline in revenue and a flat margin, while international and North America revenues decreased. The Q&A reveals concerns about activity slowdown, unclear recovery timing in Mexico, and tariff impacts. Although there are positive elements like shareholder returns and potential growth in Saudi Arabia, the overall sentiment is negative due to weak financial results, unclear guidance, and challenges in key markets.
Key Financial Performance
Total Company Revenue $5.4 billion, a decrease of 7% year-over-year.
Adjusted Operating Margin 14.5%, no year-over-year change mentioned.
International Revenue $3.2 billion, a decrease of 2% year-over-year due to lower activity in Mexico.
North America Revenue $2.2 billion, a decrease of 12% year-over-year due to lower stimulation activity in U.S. land and decreased completion tool sales in the Gulf of America.
Cash Flow from Operations $377 million, no year-over-year change mentioned.
Free Cash Flow $124 million, no year-over-year change mentioned.
Net Income per Diluted Share $0.24, no year-over-year change mentioned.
Adjusted Net Income per Diluted Share $0.60, no year-over-year change mentioned.
Completion and Production Division Revenue $3.1 billion, a decrease of 8% year-over-year due to decreased pressure pumping activity and lower completion tool sales in the western hemisphere.
Drilling and Evaluation Division Revenue $2.3 billion, a decrease of 6% year-over-year due to decreased activity in Mexico and Saudi Arabia.
Capital Expenditures $302 million, expected to be about 6% of revenue for the full year 2025.
Corporate and Other Expense $66 million, expected to be about flat in Q2.
Net Interest Expense $86 million, expected to increase by about $5 million in Q2.
Other Net Expense $39 million, expected to increase by about $5 million in Q2.
Normalized Effective Tax Rate 22.1%, expected to be approximately 23% in Q2.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Zeus IQ Technology: Achieved a significant milestone with the successful completion of the first closed loop autonomous fracturing operation in the world, utilizing real-time feedback from the reservoir.
Optime Subsea Acquisition: Closed the acquisition of Optime Subsea, a technology expected to transform deep water interventions.
Zeus Equipment Mobilization: Mobilized Zeus equipment to the Middle East, with trials expected in the near term.
International Revenue Growth: International revenue was $3.2 billion, with a decrease of 2% year-over-year due to lower activity in Mexico, but excluding Mexico, revenues grew by mid single digits.
Contract Awards: Halliburton won significant contracts including development and intervention work for Gato do Mato in Brazil and exploration work in Suriname and West Africa.
North America Revenue: North America revenue was $2.2 billion, a 12% decrease year-over-year, but the company expects to outperform the North America services market.
Cash Flow Generation: Generated $377 million of cash flow from operations and $124 million of free cash flow.
Stock Repurchase: Repurchased approximately $250 million of common stock.
Capital Expenditures: Capital expenditures for Q1 were $302 million, with expectations of about 6% of revenue for the full year.
Focus on Technology and Collaboration: Consistent focus on technology development, collaboration, and service quality execution is expected to create value for customers and drive long-term success.
Market Positioning Strategy: Strategy to maximize value in North America remains unchanged, focusing on returns rather than market share.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Market Uncertainty: The trade environment has injected uncertainty into markets, raising broad economic concerns and impacting commodity prices.
International Revenue Risks: There is more risk embedded in the outlook for international revenue, with expectations of flat to slightly down year-over-year revenue.
North America Activity Reductions: Customers are evaluating their activity scenarios for 2025, which could lead to higher than normal white space for committed fleets and potential retirement or export of fleets.
Severance and Impairment Costs: A pre-tax charge of $356 million was recognized due to severance costs, impairment of assets, and legacy environmental reserves.
Supply Chain Challenges: The ongoing trade situation is being monitored closely, with an estimated impact of $0.02 to $0.03 per share in Q2.
Regulatory and Economic Factors: The macro environment for oil and gas is dynamic, with OPEC production returns affecting commodity prices and overall market conditions.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
International Revenue Outlook: Expect year-over-year international revenue to be flat to slightly down due to increased market risks.
Contract Awards: Significant contracts awarded, including work with Shell in Brazil and Suriname, enhancing visibility and confidence for future revenue.
Growth Engines: Expect unconventional, artificial lift, intervention, and directional drilling to grow faster than other business segments.
Technology Development: Successful deployment of Zeus IQ technology, expected to enhance productivity and production.
Acquisition: Acquisition of Optime Subsea to transform deep water interventions.
Q2 Revenue Guidance: Completion and production division revenue expected to increase 1% to 3%; drilling and evaluation division revenue expected to be flat to down 2%.
Capital Expenditures: Expected to be about 6% of revenue for the full year 2025.
Free Cash Flow: Expected to generate solid free cash flow in 2025, with at least $1.6 billion returned to shareholders through buybacks and dividends.
Q2 Effective Tax Rate: Expected to be approximately 23% based on geographic earnings mix.
Impact of Trade Situation: Initial estimates for Q2 impact of trade situation are about $0.02 to $0.03 per share.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Share Repurchase: During the first quarter, Halliburton repurchased approximately $250 million of its common stock.
Shareholder Return Plan: Halliburton expects to return at least $1.6 billion of cash to shareholders through buybacks and dividends in 2025.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:How do you think about U.S. activity through the balance of the year, if we stay in this type of commodity price environment?
A:Customers are digesting information and the market is not building new equipment. Activity may slow down, impacting production, but operators are biased to work through challenges.
Q:What is the trajectory for Mexico over the course of this year into 2026, and do you see a path to resolution?
A:There is no immediate recovery in Mexico, and the new administration is working through challenges. Oil and gas are important to Mexico's economy, and recovery is expected, but timing is unclear.
Q:Do you see Saudi growing in the Halliburton portfolio this year?
A:We expect growth in Saudi for our portfolio in 2025, with opportunities in Jafurah and other areas.
Q:How are you thinking about margin progression through the rest of the year?
A:Margins are expected to be flat in Q2, with specific impacts from tariffs and mobilization costs. The second half of the year is forecasted to have margins similar to 2024.
Q:What parts of the non-OPEC food chain do you expect to see spending impacts?
A:International spending looks flat overall, but Norway and Brazil are seeing solid growth, with Europe and Africa expected to make significant jumps in Q3.
Q:Can you describe the cash flow statement regarding the $345 million equity investment?
A:The investment relates to an increase in ownership in VoltaGrid, and the cash outflow includes typical incentive payouts and restructuring charges.
Q:What is the impact of tariffs on your business?
A:Tariffs are impacting about 60% of the C&P division and 40% of the D&E division, with specific components affected. More clarity is needed for future impacts.
Q:How do you think Zeus IQ will work in sustaining margins?
A:Zeus IQ addresses challenges in hydraulic fracturing, improving recovery rates and creating value for customers, which can drive growth even in a softer market.
Q:What’s the end game with VoltaGrid?
A:It’s optionality; we’re exploring growth opportunities but are being prudent and not chasing after short-term gains.
Q:What is your outlook for gas basin activities?
A:Positive outlook due to structural demand for gas, with more inbounds from gas operators.
Q:How is Halliburton positioned in the offshore cycle compared to prior cycles?
A:Technically better positioned with strong contract wins in offshore projects, creating alignment with customers.
Q:What are the drivers for D&E margins to improve in the second half?
A:Less mobilization costs and incremental work are expected to improve margins.
Q:What is the differentiation that VoltaGrid brings?
A:VoltaGrid is part of our strategy for competitive advantage, focusing on sustainable differentiation through technology.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the timing of recovery in Mexico, stating it is too early to call. Additionally, there was vague language around the specific impacts of tariffs on product lines, indicating a need for more clarity in the future.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Gulf America
Saudi Arabia
Secretary
Suriname
Transcript inline
activity Mexico
completion production
construction
contract technology
decrease activity
drilling evaluation
engine
estimate
evaluation division
expectation day
exploration work
frack
game IQ
increase activity
intervention drilling
loop
margin result
market condition
moment
operation
product service
production division
reservoir
safety service
service line
start
success
supply
technology value
trade
value North
visit
water
HAL Transcript
Halliburton Company (HAL) Q4 2025 Earnings Call Transcript
Positive1-21
The earnings call summary and Q&A reveal a generally positive outlook for Halliburton. Key factors include strong Q4 performance, strategic partnerships like VoltaGrid, stable international markets, and technological advancements like ZEUS IQ. While North American revenue is expected to decline, international growth and cost reductions offer optimism. The positive guidance for 2026, especially in emerging markets and offshore activities, suggests a favorable stock price reaction. However, uncertainties remain regarding specific timelines and impacts, slightly tempering the overall sentiment.
Halliburton Company (HAL) Q3 2025 Earnings Call Transcript
Unknown10-21
The earnings call indicates declining revenues in North America and internationally, with reduced margins and activity. Although there is growth in artificial lift and strategic partnerships like VoltaGrid, overall guidance is weak, and management avoided specifics in key areas. The Q&A section highlights market tightness concerns and a flattish outlook for North America, suggesting potential near-term stock pressure.
Halliburton Company (HAL) Q2 2025 Earnings Call Transcript
Unknown7-22
The earnings call presents a mixed outlook: strong contract awards and technology development are positives, but weak Q3 guidance and margin reductions in North America are concerning. International growth in unconventionals and solid shareholder returns are encouraging, yet the lack of specific guidance on key projects and potential risks in North America temper enthusiasm. The Q&A reveals cautious customer behavior and ongoing challenges, suggesting a balanced sentiment with no clear catalyst for significant stock movement.
Halliburton Company (NYSE:HAL) Q1 2025 Earnings Call Transcript
Unknown4-23
The earnings report presents a mixed picture with several negative factors. Financial performance shows a decline in revenue and a flat margin, while international and North America revenues decreased. The Q&A reveals concerns about activity slowdown, unclear recovery timing in Mexico, and tariff impacts. Although there are positive elements like shareholder returns and potential growth in Saudi Arabia, the overall sentiment is negative due to weak financial results, unclear guidance, and challenges in key markets.
HAL Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
