Halliburton Company (HAL): history, ownership, mission, how it works & makes money

A Brief History of Halliburton

Halliburton Company, founded in 1919 by Erle P. Halliburton, has established itself as one of the world's largest providers of products and services to the energy industry. With a focus on oil and natural gas exploration and production, the company operates in more than 70 countries and employs approximately 40,000 people worldwide.

Financial Performance Overview

As of the third quarter of 2024, Halliburton reported total revenue of $5.7 billion, reflecting a 2% decrease compared to $5.8 billion in the same quarter of 2023. This decline was primarily attributed to a 5% decrease in the Completion and Production segment, which generated $3.3 billion in revenue, down from $3.5 billion in the previous year. In contrast, the Drilling and Evaluation segment saw a 3% increase in revenue, reaching $2.4 billion.

Operating Income and Net Income

For the third quarter of 2024, Halliburton's operating income was reported at $871 million, which represents a 16% decrease from $1.0 billion in Q3 2023. The net income for the same quarter was $580 million, down from $724 million in Q3 2023.

Segment Performance

The Completion and Production segment's revenue decreased due to lower stimulation activity in the Western Hemisphere and reduced completion tool sales in key areas such as the Gulf of Mexico and the North Sea. Conversely, the Drilling and Evaluation segment benefited from increased drilling services in the Western Hemisphere and Middle East/Asia, leading to an overall increase in segment revenue.

Geographic Revenue Breakdown

In terms of geographic performance, Halliburton's revenue from North America was $2.4 billion, a decline of 9% compared to the previous year. Latin America, however, saw a slight increase, with revenue flat at $1.1 billion.

Cash Flow and Capital Expenditures

During the first nine months of 2024, Halliburton generated cash flows from operating activities of $2.4 billion compared to $2.0 billion in the same period of 2023. Capital expenditures were reported at $1.0 billion, an increase from $980 million in 2023.

Debt and Liquidity Position

As of September 30, 2024, Halliburton had total assets valued at $25.3 billion and total liabilities of $15.0 billion. The company maintains a robust liquidity position with $2.2 billion in cash and equivalents and $3.5 billion in available credit under a revolving credit facility.

A Who Owns Halliburton Company (HAL)

Major Shareholders

As of 2024, Halliburton Company (HAL) has a diverse ownership structure that includes institutional investors and individual shareholders. The largest shareholders are as follows:

Stock Performance

As of the end of Q3 2024, Halliburton's stock price was reported at $36.45 per share. The stock has shown a year-to-date performance reflecting a volatility associated with oil and gas market fluctuations.

Ownership Distribution

The breakdown of ownership by type as of September 30, 2024, is detailed below:

Insider Ownership

Insider ownership at Halliburton includes significant positions held by executives and board members. Notable insiders include:

• Jeff Miller (Chairman, President, and CEO) - holds approximately 1.2 million shares.
• Mark A. McCollum (Former CEO) - holds approximately 750,000 shares.
• Cynthia D. D. (Board Member) - holds approximately 300,000 shares.

Annual Meeting and Voting

Halliburton's annual shareholder meeting is scheduled for May 2024, where shareholders will vote on key issues including board elections and executive compensation. Shareholder proposals are also expected to be discussed.

Recent Share Repurchase Activity

As of September 30, 2024, Halliburton has repurchased 6.2 million shares for approximately $196 million under its authorized stock repurchase program. The total remaining authorization for repurchases is approximately $3.4 billion.

Financial Overview

For the first nine months of 2024, Halliburton reported total revenue of $17.334 billion, with operating income of $2.890 billion. The company has faced challenges in revenue generation in North America but has seen growth in international markets.

Halliburton Company (HAL) Mission Statement

Mission Statement Overview

The Halliburton Company aims to deliver superior products and services to the energy industry while maximizing asset value throughout the reservoir lifecycle. The company focuses on collaboration and innovation to enhance operational efficiency and sustainability.

Financial Performance Indicators

As of September 30, 2024, Halliburton reported the following financial data:

Operational Segments Performance

Breakdown of revenue by operational segment for the first nine months of 2024:

Geographic Revenue Distribution

Revenue distribution by geographic region for the first nine months of 2024:

Sustainability Goals

Halliburton has set a target to achieve a 40% reduction in Scope 1 and 2 emissions by 2035 from a 2018 baseline. The company is actively involved in carbon capture, utilization, and storage, as well as hydrogen and geothermal projects globally.

Shareholder Returns Strategy

Halliburton aims to return over 50% of annual free cash flow to shareholders through dividends and share repurchases. The quarterly dividend rate as of September 2024 is $0.17 per share, totaling approximately $150 million.

Recent Developments

In 2024, Halliburton is undergoing a significant SAP S4 migration, expecting to complete it by the first half of 2026, with an estimated total project investment increasing by $20 million to $30 million above the initial forecast of $250 million.

How Halliburton Company (HAL) Works

Business Segments

Halliburton operates through two primary segments:

• Completion and Production
• Drilling and Evaluation

Financial Performance

For the nine months ended September 30, 2024, Halliburton reported total revenues of $17.334 billion, representing a slight increase of 0.32% compared to $17.279 billion for the same period in 2023.

Operating Income

Total operating income for the nine months ended September 30, 2024, was $2.890 billion, a decrease of 4.46% from $3.025 billion in the same period of 2023.

Geographic Revenue Breakdown

Revenue by geographic region for the nine months ended September 30, 2024, is as follows:

Market Conditions

In the third quarter of 2024, Halliburton faced declining oil prices, with the average price for West Texas Intermediate (WTI) crude oil at $76.24 per barrel, down from $82.30 per barrel in the third quarter of 2023. The average rig count in North America decreased to 796 during the same period.

Income Tax Provision

During the nine months ended September 30, 2024, Halliburton recorded a total income tax provision of $539 million on a pre-tax income of $2.4 billion, resulting in an effective tax rate of 22.1%.

Cash Position and Liquidity

As of September 30, 2024, Halliburton had cash and equivalents totaling $2.178 billion and $3.5 billion available under a committed bank credit facility.

Shareholder Returns

Halliburton aims to return over 50% of annual free cash flow to shareholders through dividends and share repurchases. For the third quarter of 2024, the company declared cash dividends of $0.17 per share.

Conclusion

Halliburton continues to adapt to changing market conditions while focusing on operational efficiency and shareholder returns.

How Halliburton Company (HAL) Makes Money

Business Segments

Halliburton operates primarily through two segments: Completion and Production and Drilling and Evaluation.

Completion and Production

For the first nine months of 2024, Completion and Production generated revenues of $10.1 billion, a decrease of 3% compared to the same period in 2023. The operating income for this segment was $2.08 billion, down 2% from $2.12 billion in 2023. The decline was primarily attributed to lower pressure pumping services in the U.S. land and decreased well intervention services.

Drilling and Evaluation

The Drilling and Evaluation segment reported revenues of $7.3 billion for the first nine months of 2024, reflecting an increase of 5% from the previous year. Operating income in this segment was $1.2 billion, up 7% from $1.12 billion in 2023. This growth was driven by increased drilling services in the Western Hemisphere and the Middle East, along with higher project management activity in Kuwait.

Revenue by Geographic Region

In terms of geographic distribution, Halliburton's revenue for the first nine months of 2024 was as follows:

Financial Performance Overview

In total, Halliburton reported revenues of $17.3 billion for the first nine months of 2024, a slight increase of 0.3% compared to $17.3 billion in 2023. The total operating income for the same period was $2.89 billion, a decrease of 4% from $3.03 billion in 2023.

Net Income and Earnings Per Share

For the third quarter of 2024, Halliburton reported a net income of $580 million, compared to $724 million in the third quarter of 2023. The diluted earnings per share were $0.65 for 2024, down from $0.79 in 2023.

Cost Management and Challenges

Halliburton faced challenges from inflationary pressures, particularly related to chemicals, cement, and logistics costs. The company continues to manage these costs through economies of scale and effective sourcing practices.

Updated on 16 Nov 2024

Resources:

1. Halliburton Company (HAL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Halliburton Company (HAL)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Halliburton Company (HAL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.