Shares of Halliburton (HAL +4.04%) rallied 4.7% on Wednesday as of 12:48 p.m. EST.
The oilfield services giant delivered a fourth-quarter earnings beat earlier this morning. Yet even though revenue and earnings beat analysts' expectations, the numbers themselves were rather tepid.
Therefore, today's jump could likely be attributed to management's optimistic view of the company's potential in Venezuela, given the leadership changes in that country earlier this month.
NYSE: HAL
Key Data Points
Haliburton beats low expectations, but Venezuela could lead to growth
In the quarter, Haliburton posted revenue growth of just 0.8% to $5.7 billion, with flat earnings per share of $0.70. Despite the lackluster growth figures, these numbers still beat sell-side analysts' expectations. Delving into the company's two divisions, Halliburton's Completion and Production segment rose 2.8%, while the Drilling and Evaluation segment fell 1.8%.
More than earnings results, management's commentary on Halliburton's potential in Venezuela was likely a bigger driver of today's outperformance.
For those unaware, the U.S. military captured Venezuela's President Nicolás Maduro and his wife on Jan. 3, and brought the two to the U.S., where Maduro will be charged with narco-terrorism and drug trafficking. While the situation in the country remains highly unsettled, there is some optimism among both the Administration and the oil and gas industry that a change in leadership could open Venezuela's vast oil and gas reserves to U.S. energy companies.
Of note, Venezuela has the most oil and gas reserves of any country in the world, including Saudi Arabia, yet it produces just 1% of the world's oil today.
Halliburton CEO Jeff Miller noted on the conference call with analysts today:
I have always believed that oil and gas is the key to Venezuela's economic recovery. I'm excited about the tremendous opportunity for Halliburton in Venezuela. Halliburton entered Venezuela in 1938 and only exited in 2019 because we are an American company in compliance with U.S. sanctions. Halliburton knows this market well, and we will grow our business there as soon as commercial and legal terms are resolved, including payment certainty. The early steps are already well underway.
Image source: Getty Images.
The energy sector has lagged; could there be a resurgence?
Given the geopolitically fraught situations in Venezuela, Iran, and Russia today, it's possible the lagging oil and gas sector, which appreciated just 7.9% last year compared with the market's 17.7% total return, could be in for a turnaround in 2026. Oil prices are down 22% over the past year, but the combination of AI-related energy demand, geopolitical risk, and the potential for U.S. companies to tap into Venezuela may bring better things in 2026.
