26% Annual Return And Halliburton
Chris DeMuth Jr. • 44 Comments
Chris DeMuth Jr. • 44 Comments
Thu, Jul. 28, 2:47 PM
- Baker Hughes (BHI +2.6%) is higher despite posting a wider than expected Q2 loss on 39% less revenue Y/Y, as the company says it expects margins to improve across its businesses due to recent job cuts and other restructuring actions.
- Capital One analyst Luke Lemoine was positive on the results, saying BHI's Q2 "clean" EBITDA came in at ~$61M, close to expectations of $65M, $500M in cost-cutting is on track, and that the company repurchased $500M in shares in the quarter, a third of its buyback program.
- However, CEO Martin Craighead is less optimistic about Q2 than rivals Schlumberger (SLB -1%) and Halliburton (HAL -0.2%), saying he does not expect a substantial recovery in drilling and pricing in North America this year and that oil prices "in the upper $50s at a minimum are required for a sustainable recovery."
- BHI cut ~3K jobs in quarter, after eliminating 2K in Q1 and 18K last year.
Fri, Jul. 22, 11:37 AM
- Schlumberger (SLB +0.7%) is higher after Q2 earnings edged analyst consensus and saying it is shifting focus to recovering price concessions made during the depths of the oil bust.
- CEO Paul Kibsgaard says SLB is renegotiating contracts as oil prices rise from their lows, and warns that prices charged by service companies also must recover to close the widening gap between oil production and demand.
- "Inevitably service industry pricing has to recover and as it does, this will consume a large part of the E&P investment increases intended for additional activity, which will further amplify the pending oil supply deficit," Kibsgaard said in today's earnings conference call.
- Edward Jones analyst Rob Desai sees the appetite to renegotiate as a positive but "it could be a couple of years before pricing really recovers."
- SLB yesterday joined rival Halliburton (HAL -0.4%) in saying the oil industry appears to have reached the bottom of the cycle, even as market conditions mostly worsened in Q2.
Wed, Jul. 20, 7:57 AM
- Halliburton (NYSE:HAL) CEO Dave Lesar says the U.S. rig count bottomed out during Q2, and he expects to see a modest uptick during H2: "We believe the North America market has turned. With our growth in market share during the downturn, we believe we are best-positioned to benefit from any recovery, including a modest one."
- HAL +0.7% premarket after reporting a lighter than expected Q2 loss on revenues of $3.84B, down 35% Y/Y, but North American revenues fell 15% while the continent’s rig count fell by a steeper 23%; HAL, which derives ~40% of its revenue from North America, is more exposed to the region than rivals Schlumberger (NYSE:SLB) and Baker Hughes (NYSE:BHI).
- The U.S. rig count "reached a landing point" during Q2 after falling 78% from the November 2014 peak, improving by 26 over the past several weeks, "reflecting operator confidence in stabilizing commodity prices."
- HAL booked $3.52B of costs related to terminating the Baker Hughes merger, as well as $423M of other impairments and charges during the quarter; HAL's unadjusted Q2 net loss was $3.21B, or $3.73/share, vs. a profit of $54M, or $0.06/share, in the year-ago quarter.
- "The outlook was the most important thing," Edward Jones analyst Rob Desai says, since Q2 expectations for HAL were so low.
Wed, Jul. 20, 6:51 AM
Tue, Jul. 19, 5:30 PM
Fri, Jul. 15, 6:08 AM
Tue, Jul. 12, 11:30 AM
- Six oil services stocks - Flotek Industries (NYSE:FTK), Schlumberger (SLB +4.4%), Halliburton (HAL +4%), Oceaneering (OII +6%), Superior Energy Services (SPN +5.5%) and Rowan (RDC +8.1%) - should do well regardless of the price of oil, Stephens analyst Matthew Marietta says.
- The past 18 months have proven that trying to predict specific commodity prices is a guessing game, Marietta says, but he thinks that a global ratio of reserves to annual production levels at an all-time high, coupled with global equipment overcapacity and cost deflation "has the potential to create a price environment range-bound in line with our sensitivities."
- Stephens also upgrades RDC and Nabors Industries (NBR +9.8%) to Overweight from Equal Weight.
Mon, Jul. 11, 5:37 PM
Tue, Jul. 5, 9:11 AM
- Halliburton (NYSE:HAL) says Mark McCollum is resuming his position as CFO, effective immediately.
- In late 2014, McCollum assumed the new role of chief integration officer to aid with HAL’s proposed acquisition of Baker Hughes, but the deal died because of regulatory concerns.
- Christian Garcia, who held the interim CFO title, will remain with HAL as senior VP of finance until Aug. 1, when he plans to take early retirement.
Thu, Jun. 30, 2:37 PM
- Venezuela's PDVSA says it has signed financing agreements with Halliburton (HAL +0.9%) and Weatherford (WFT +0.1%), without offering details on any agreements that had been reached.
- HAL said last month that it was curtailing activity in Venezuela over delays in payments, two weeks after oil services peer Schlumberger (SLB +1.2%) announced a similar move as a result of payment difficulties.
- The local Del Pino publication reported earlier this month that PDVSA was close to reaching a deal with SLB that would boost the company's presence in Venezuela through a new financing scheme.
Fri, Jun. 10, 4:54 PM
- Halliburton (NYSE:HAL) is well positioned to take advantage of trends in the energy industry in the coming years, Susquehanna says in reiterating its Positive rating on the shares and raising its price target to $55 from $47.
- HAL’s competitive advantages will shine and its “substantial logistics infrastructure" will help it produce higher margins than peers, if drilling and completion activity enjoys a meaningful recovery in 2017-18, the firm says.
- HAL says it would expect small pickups in completions activity and some rigs going back to work in pockets of the southern U.S. at $50-$55 oil, but it believes it would take $60-$65 oil to prompt a broader and more material recovery in spending.
Mon, Jun. 6, 3:39 PM
- Weatherford (WFT +8.3%) is upgraded to Overweight from Equal Weight with an $8 price target, raised from $7, at Barclays following last week's $1.1B convertible debt issue and the settling of the Zubair change order claim for $150M meaningfully shifted the narrative away from the balance sheet, removing considerable downside risk.
- "With near-term liquidity issues resolved, shares of WFT should start to recapture substantial YTD underperformance as focus starts so shift towards potential recovery amid low expectations," Barclays writes.
- However, the firm says WFT remains challenged with a highly levered balance sheet and a weaker operational position vs. the big three oil services companies, as it does not possess the scale in either North America or internationally to compete in markets that are becoming increasingly integrated.
- Oil service (OIH +6.2%) peers also are posting strong gains: SLB +4.5%, HAL +4.6%, BHI +6.8%.
Sat, Jun. 4, 9:05 AM
- Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI) are downgraded at Moody's, roughly a month after their planned merger fell apart due to U.S. and European antitrust concerns.
- Their senior unsecured credit ratings were dropped from A2 to Baa1, which reflects moderate credit risks and an uncertain business environment.
- Debt incurred to finance its failed bid to acquire Baker Hughes together with the negative impact on profitability and cash flow of the very weak oilfield services environment have eroded Halliburton’s credit metrics to levels which no longer support its A2 rating,” Moody’s writes on HAL.
- The failed deal also was cited in the BHI downgrade, as well as elevated leverage and developing business model.
Wed, Jun. 1, 3:54 PM
- Land-based oil drillers "all look overvalued," Credit Suisse analysts say as they downgrade Helmerich & Payne (HP -2.1%), Patterson-UTI Energy (PTEN -2%) and Precision Drilling (PDS -4.6%) to Underperform from Neutral, and Nabors Industries (NBR -3.8%) to Neutral from Outperform, predicting current spot rates likely will fall when incremental rigs go to work.
- Among the group, the firm sees HP as "the worst offender" on valuation, with overly optimistic assumptions for $35K spot market dayrates and forgiveness of deferred tax liabilities still not enough to justify the current price based on its rig count, while NBR is "the relative winner due to its international exposure."
- The firm prefers Baker Hughes (BHI +0.1%) and Halliburton (HAL -0.1%) in the sector due to their North American exposure and expectations of execution, while Schlumberger (SLB -0.6%) "has valuation headwinds and issues with exploration, deepwater and international exposure, but longer-term exposure to the stock is essential."
- Now read Moody's: Drillers will be the last to recover in the oil patch (May 16)
Mon, May 23, 3:54 PM
- Schlumberger (SLB +0.1%) is not the only oil services stock Goldman Sachs is touting, as the firm also awards Buy ratings to Halliburton (HAL +1.4%) and Nabors Industries (NBR -0.9%) for their cyclical exposure to the U.S. onshore market.
- Goldman's commodities and E&P teams say they now see a clearer path for oil production growth in 2017-18, driven by the market becoming balanced by H2 2016 and demand continuing to grow at a healthy pace, with U.S. onshore and Mideast OPEC as the lead drivers of the production growth.
- The firm likes HAL, SLB and NBR for their cyclical exposure to the U.S. onshore market, and all three have exposure to the Saudi market; HAL and SLB also offer very high leverage to the drilling and uncompleted wells inventory, which sits low on the cost curve and should be the first wells where activity should pick up.
Fri, May 20, 6:06 AM
Halliburton Co. provides services and products to the energy industry related to the exploration, development, and production of oil and natural gas. The company operates through two segments: Completion & Production and Drilling & Evaluation. The Completion & Production segment delivers... More
Sector: Basic Materials
Industry: Oil & Gas Equipment & Services
Country: United States