Oilfield services provider Halliburton Co. (HAL, Financial) reported strong first-quarter earnings before the opening bell on Monday, initially sending shares 2.8% higher in premarket trading.
The Houston-based company posted adjusted earnings of 23 cents per share, topping Refinitiv’s estimates of 22 cents by a hair. Revenue was flat from the prior-year quarter at $5.7 billion, but still beat expectations of $5.53 billion.
While Halliburton’s North America revenue fell 7% to $3.3 billion on the back of prolonged pricing headwinds and a slowdown in production growth in the U.S., it was still above the $3.13 billion analysts were anticipating.
In addition, Chairman, President and CEO Jeff Miller said he believes the effects of the pricing downturn and tightened spending from oil producers, which have recently plagued oilfield services companies, are bottoming out as Halliburton saw higher activity levels in North America compared to the year-ago quarter.
“We believe the worst in the pricing deterioration is now behind us,” he added. “For the next couple of quarters, I see demand for our services progressing modestly.”
International revenue grew 11% to $2.5 billion as rising global oil prices boosted drilling activity overseas. As a result, the company is forecasting single-digit international growth in 2019.
“Halliburton is well positioned to navigate the near-term and thrive in the long run,” Miller said. “We will achieve that through responsible capital stewardship, prioritizing capital efficiency, investing in the technologies that deliver differentiation, and generating strong cash flow and returns.”
Following the initial pop, shares of Halliburton slid 0.48% to $30.97 on Monday morning. After tumbling approximately 46% in 2018, GuruFocus estimates the stock has gained 16% year to date.
According to the Industry Overview page, Halliburton is the second-largest company is the oilfield services sector, behind Schlumberger Ltd. (SLB, Financial). Other top companies in the space include Baker Hughes, a GE Co. (BHGE, Financial) and National Oilwell Varco Inc. (NOV, Financial).
Of the gurus invested in Halliburton as of fourth-quarter 2018, Dodge & Cox has the largest stake with 3.03% of outstanding shares. Other top guru shareholders include Sarah Ketterer (Trades, Portfolio), Richard Pzena (Trades, Portfolio), Bill Nygren (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Hotchkis & Wiley, Tweedy Browne (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Ken Fisher (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio).
Disclosure: No positions.
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