Halliburton Company (NYSE:HAL) is one of the world's largest providers of products and services to the energy industry. The company operates in over 70 countries and has approximately 49,000 employees. Halliburton's operations are organized into two main segments: Completion and Production, and Drilling and Evaluation.

Business Overview

The Completion and Production segment delivers cementing, stimulation, specialty chemicals, intervention, pressure control, artificial lift, and completion products and services. The Drilling and Evaluation segment provides field and reservoir modeling, drilling, fluids, evaluation, and precise wellbore placement solutions.

Financials

In 2023, Halliburton generated annual revenue of $23,018 million and net income of $2,638 million. The company's annual operating cash flow was $3,458 million, and its annual free cash flow was $2,079 million. These strong financial results demonstrate Halliburton's ability to consistently deliver value for its shareholders.

During the first quarter of 2024, Halliburton reported total revenue of $5,804 million, a 2% increase compared to the first quarter of 2023. The company's operating income was $987 million, flat when compared to the same period in the prior year. Halliburton's Completion and Production segment revenue was down slightly in the first quarter of 2024, while the Drilling and Evaluation segment revenue increased 7%.

Geographically, Halliburton's revenue is well-diversified, with 42% of consolidated revenue coming from the United States in the first quarter of 2024, down from 47% in the first quarter of 2023. No other country accounted for more than 10% of the company's revenue during these periods.

International Operations

Looking at the company's international operations, Halliburton's international revenue grew 12% in the first quarter of 2024 compared to the same period in 2023. This growth was driven by improved activity in multiple product service lines in Latin America, increased drilling services in the Middle East, higher fluid services in Europe, and improved cementing services across all regions. The international average rig count increased 5% in the first quarter of 2024 compared to the first quarter of 2023.

North American Operations

In North America, Halliburton's revenue decreased 8% in the first quarter of 2024 compared to the first quarter of 2023, primarily due to lower pressure pumping services in U.S. land and lower wireline activity throughout the region. However, the company saw improved completion tool sales, higher pressure pumping services, and improved drilling-related services in the Gulf of Mexico, along with higher artificial lift activity in U.S. land.

Outlook

Halliburton's management expects the company's international business to deliver around 10% revenue growth for the full year of 2024. In North America, the company now expects full-year 2024 revenues to decline 6% to 8% versus 2023, driven by lower activity.

The company's strategic priorities include allocating capital to the highest return opportunities, increasing international growth, maximizing value in North America, continuing to drive differentiation and efficiencies through digital and automation technologies, maintaining capital discipline, and providing cash returns to shareholders.

Liquidity

Halliburton has a strong balance sheet, with $1.9 billion of cash and equivalents as of March 31, 2024. The company also has $3.5 billion of available committed bank credit under a revolving credit facility. Halliburton's management expects free cash flow to be at least 10% higher in 2024 compared to 2023.

Recent Developments

The company's focus on technology and innovation is a key competitive advantage. Halliburton continues to invest in differentiated drilling technology, such as the iCruise rotary steerable system and the LOGIX autonomous drilling platform, which have driven strong performance and reliable execution in international markets. The company's Landmark software business and artificial lift product line are also growing at a faster pace than the overall international business.

In North America, Halliburton's strategy of maximizing value over market share has demonstrated its resilience, with the company delivering strong margins through the current market cycle. The company's investments in technologies like the ZEUS electric fracturing systems, automated and intelligent fracturing, and the iStar Intelligent Drilling and Logging Platform are expected to drive higher margins through better pricing and increased efficiency.

Halliburton's commitment to sustainability and the energy mix transition is also noteworthy. The company has set a target to achieve a 40% reduction in its Scope 1 and 2 emissions by 2035 from the 2018 baseline. Halliburton is also actively participating in carbon capture, utilization, and storage, hydrogen, and geothermal projects globally.

Conclusion

Overall, Halliburton's diversified business model, strong international growth, focus on technology and innovation, and commitment to shareholder returns make it a compelling investment opportunity in the oilfield services sector.