Halliburton Earnings: an Early Look

With hundreds of companies having already reported quarterly results, we're now in the heart of earnings season. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Let's turn to Halliburton (NYSE: HAL  ) . The oil services company has bounced back from the Gulf oil spill, but volatile conditions in the energy industry have led to some turbulence for the company. Let's take an early look at what's been happening with Halliburton over the past quarter and what we're likely to see in its quarterly report on Friday.

Stats on Halliburton

Analyst EPS Estimate

$0.61

Change from Year-Ago EPS

(39%)

Revenue Estimate

$7.06 billion

Change from Year-Ago Revenue

(0.1%)

Earnings Beats in Past 4 Quarters

3

Source: Yahoo Finance.

Will Halliburton hit black gold with its earnings?
Analysts have been pretty steady in their assessment of Halliburton in recent months, with earnings-per-share estimates falling by just a single penny. The long-term trend has been one of slowing revenue growth and modest earnings contraction for Halliburton, but shareholders have enjoyed about a 10% rise in the stock since mid-October on hopes that the energy industry will ramp up despite oil prices having hit a plateau and gas prices remaining stubbornly low.

One thing that has become extremely important for oil services companies lately is keeping costs low while boosting efficiency in supporting energy production. Baker Hughes (NYSE: BHI  ) has equipment systems that have been able to cut drill times and improve its well-per-rig ratio in 2012. For its part, Halliburton's new Q10 pumps use less power to cut costs for producers, which with low natural gas prices can make the difference between their earning a profit or a loss.

But the wave of the future for Halliburton will come from international expansion. Right now, Schlumberger (NYSE: SLB  ) has led the way with its worldwide scope, as Halliburton has largely focused on the Western Hemisphere. But with its fracking experience, Halliburton's services will be in high demand from countries around the world seeking to find their fair share of resources.

Moreover, Halliburton is taking advantage of the drive toward deepwater exploration. Rival Seadrill (NYSE: SDRL  ) has demonstrated the huge profit potential from deepwater drillships, helping oil and gas companies take advantage of massive deepwater finds in ocean basins off the coasts of Africa and South America. Halliburton has also looked to boost its exposure to that area, with substantial success.

Schlumberger's earnings report last week pointed to growth both domestically and internationally, and so it's reasonable to conclude that Halliburton should enjoy the same overall trends. In assessing Halliburton's results, be sure to take them in the context of Schlumberger's report to see how well Halliburton is doing at catching up to the industry leader.

Learn more
Find out even more about the oilfield services industry by reading our premium research report on Halliburton. Inside, you'll get our analysts' views on whether Halliburton is a buy right now given its enormous success in tapping the domestic energy market. Get your access right now by clicking here to claim your report.

Click here to add Halliburton to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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