Halliburton Co. (NYSE: HAL) reported strong earnings and revenues this morning on the back of increased demand for services in the unconventional natural gas and oil fields in North America and seasonal rebounds in international operations. Halliburton reported diluted EPS of $0.52 on revenues of $4.4 billion. Analysts had been expecting EPS of $0.37 and revenues of $4.09 billion.
Halliburton was the first of the large oil field services companies to report earnings. Weatherford International, Ltd. (NYSE: WFT) reports earnings tomorrow and analysts expect EPS of $0.07 on revenues of $2.37 billion. Schlumberger Ltd. (NYSE: SLB) reports earnings on Friday and analysts expect EPS of $0.68 on revenues of $5.92 billion. National Oilwell Varco, Inc. (NYSE: NOV) reports earnings on July 29th, with expectations of $0.93 EPS and revenues of $2.94 billion. Baker Hughes Inc. (NYSE: BHI) reports earnings August 3rd and analysts expect EPS of $0.43 on revenues of $3.47 billion.
The boom in North American shale gas drilling has given Halliburton an enormous boost. The company reported a 24% sequential increase in North American revenue and growth of 90% in operating income. The land rig count in North America grew by 13% in the quarter, so the company can safely say that it was in the right place at the right time.
The company struck a cautionary note on future growth, noting that it believes that the North American land rig count may slow as prices for natural gas stay low. The company did not mention any potential liability for the blowout at the Macondo well operated by BP plc (NYSE: BP) in the Gulf of Mexico. That omission could just be wishful thinking or it could indicate that the company believes it is on firm legal ground regarding its role in the disaster.
The latter is more likely. A week after the Deepwater Horizon rig exploded and sank, FBR Capital downgraded Halliburton to ‘Market Perform’. Just two weeks later, the analysts reversed themselves and put the company back at ‘Outperform’ with a price target of $44/share. Halliburton’s share price is still a long way from that target, but it has been trending back up since late May.
Halliburton shares are up nearly 4% in pre-open trading. A weaker dollar and rising crude prices should contribute to an even better day for the stock today.
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