Halliburton (HAL.US) announced better-than-expected fourth-quarter results on Wednesday, with its net profit significantly surpassing Wall Street forecasts, driven by the steady release of demand for its oilfield services and equipment in international markets. Following the earnings release, the oilfield services company's stock rose more than 3% in pre-market trading.
In recent years, Halliburton has consistently focused on international markets, particularly Latin America, Europe, and Africa, to counter the persistent sluggishness in North American drilling and production activity. The company stated that growth in sales of completion tools in Brazil, the North Sea, and the Caribbean region, along with increased software sales in Mexico, contributed to a 2.9% year-over-year increase in quarterly revenue from its international operations, reaching $3.5 billion.
Furthermore, accelerated drilling construction activities in Africa and increased production operations in Angola also provided support for profitability. This helped drive Halliburton's fourth-quarter revenue to $5.7 billion, exceeding market expectations of $5.41 billion, while adjusted earnings per share came in at 69 cents, also far surpassing analysts' estimates of 55 cents.
Halliburton CEO Jeff Miller commented on the results: "Our international business performance was strong, our integrated value proposition is resonating with customers, our technology is delivering significant value, and our growth vectors are aligned with future market trends." In contrast, revenue from North America remained flat at $2.2 billion.
Nevertheless, Miller added, "I am confident that North America will be the first to respond when macro fundamentals improve." Looking at business segments, revenue from the Completion and Production division held steady at $3.3 billion, but operating income grew 11% to $570 million; revenue from the Drilling and Evaluation division also remained stable at $2.4 billion, with operating income increasing 5% to $367 million.
The company also confirmed $83 million in pre-tax charges, partly related to asset impairments for assets held for sale and severance costs. Another noteworthy point is that as Halliburton kicks off the US oilfield services earnings season, the US energy industry is preparing to respond to the Trump administration's proposed hundred-billion-dollar investment plan to revitalize Venezuela's oil industry.
Halliburton was one of the energy companies that met with the White House earlier this month to discuss potential investment opportunities in Venezuela. Miller had previously stated that the company has "a high level of interest" in returning to the country's market. Job postings released on January 16th show that Halliburton has begun recruiting for multiple positions (including engineers and technicians) in Venezuela, signaling its potential return to the South American market.