Halliburton: The Bottom Might Be In

This article was first published by Seeking Alpha on March 19, 2015

By Sarfaraz A. Khan 

Halliburton Announces Massive Job Cuts As Industry Braces For Persistent Weakness In Oil Prices

This article is an update to our previously published work which can be found here and here.

On Tuesday, Halliburton (NYSE:HAL) announced that it will eliminate between 5,200 and 6,400 jobs. This represents 6.5% to 8% of the company's total 80,000 workforce. The cuts also include around 1,000 jobs the company said it will eliminate in the Eastern Hemisphere. The job cuts are a direct result of the plummeting oil prices which have fallen by more than 50% since July, 2014 and are not related to Halliburton's $35 billion merger with rival Baker Hughes (NYSE:BHI), Halliburton said in a statement. The company said that the eliminations will impact all business units.

Baker Hughes -- Halliburton and How to Profit From the $36B Merger

This article was first published by TheStreet on December 09, 2014.

By Sarfaraz A. Khan. Daniel L. 

NEW YORK (TheStreet) -- As Baker Hughes (BHI) moves forward with its merger with Halliburton (HAL) , investors might be better-off profiting from the recent rally by selling the former's shares.

The 5.6% increase in the Houston-based Baker Hughes's stock over the last four weeks, settling near $55 when markets closed on Monday, compares with 67% slide in the Market Vectors Oilfield Services ETF (OIH) , which includes 26 of the leading oilfield services companies. The drop has been fueled by the deteriorating crude prices which touched their five-year lows on Monday.

Tumbling Oil Prices Pose a Major Challenge to Halliburton

This article was originally published by TheStreet on October 24, 2014

By Sarfaraz A. Khan. Research Asst: Omar E. 

NEW YORK (TheStreet) -- Oilfield services giant Halliburton (HAL) is optimistic about its future, despite the tumbling crude prices, but analysts see a major challenge ahead with a possibility of oil falling to $75 a barrel in 2015.

The Houston-based company released its third-quarter results on Monday showing revenue climbed by 16% from the same quarter last year to $8.7 billion due to higher drilling activity in North America and strong growth in international markets. Halliburton's net income, excluding one-time items, rose 43% from last year to $1.19 a share, thanks to more than 30% increase in adjusted operating income from North America.

Why Halliburton's Settlement Is Great News for Shareholders

This article was originally published by TheStreet on September 03, 2014.

By Safaraz A. Khan

NEW YORK (TheStreet) -- Halliburton's  (HAL_)  announcement Tuesday that it has reached a $1.1 billion agreement to settle most claims related to its role in the 2010 Deepwater Horizon oil rig explosion could prove to be a buying opportunity for long-term investors.

That would be welcome news, as the company's shares have fallen by nearly 5% since the beginning of July on the back of the slump in oil prices. So far this year, Halliburton's shares have risen by about 33%, closing at $67.49 on Tuesday.

The settlement was a positive development, as it removes the uncertainty related to spill claims and allows the company to focus on its domestic and international businesses.

Halliburton Poised to Break Its 52-Week High

This article was originally published by TheStreet on May 07, 2014

By Sarfaraz A. Khan. Research assistant: Gohar Yousuf

NEW YORK (TheStreet) -- When Halliburton (HAL_) reported its quarterly results on April 21, it failed to post any increase in profits. Yet its shares are up 5.8% since the earnings release as of 3:15 p.m. Wednesday -- close to 52-week highs.

That is because the company, which has struggled due to the weakness in the North American oil pressure pumping prices, has projected 25% growth in earnings in the next quarter, driven by an expected uptake in activity.

Moreover, analysts have forecast an increase in exploration and production expenditure and rig count, both in and outside of North America, for the next couple of years. This will fuel Halliburton's revenue and income growth in the coming quarters.

Schlumberger’s Competitive Advantage Will Drive Double-Digit Earnings Growth

By Sarfaraz A. Khan and Gohar Yousuf

Schlumberger’s (NYSE:SLB) size, exposure to the international markets and technological capabilities gives it a competitive advantage that would translate into double digit EPS growth. 

The world’s leading oilfield services firm, Schlumberger (SLB), continues to grow in the international and North American markets. The company has managed to increase its market share and has, once again, beaten the market’s expectations in its quarterly results, for the eighth time in a row. Unlike some of its other rivals, Schlumberger is truly a global player with significant representation in the international markets. The company is now eyeing increasing demand from the Middle East and Asia, particularly Saudi Arabia and Iraq. 

Strong Results

In its previous quarterly results, Schlumberger reported revenue growth of 10.6% from last year to $11.61 billion while its earnings rose 20% to $1.71 billion, or $1.29 per share. The business managed to beat both top and bottom line consensus estimates by $30 million and $0.05 per share, respectively. The strong results came on the back of an impressive performance in the … read full article at GuruFocus.

 

Mexican Reforms: Time To Buy These Oilfield Services Titans

From Seeking Alpha

Mexico is gearing up for some significant oil reforms in an effort to revive its economy in general and its oil and gas sector in particular. The country's energy sector has been dominated by Petróleos Mexicanos, also known as Pemex. With the new reforms, one of the world's most restrictive energy markets could open its doors to international energy firms. The oilfield services firms Schlumberger (NYSE:SLB) and Halliburton (NYSE:HAL) could be the first to capitalize on this development. The two were already eyeing more than $8 billion worth of large integrated projects in Mexico. Analysts believe that now is the time to buy Schlumberger and Halliburton on these new developments. The new price targets on these firms represent a 30% upside.

Declining Output

The state-owned energy behemoth Pemex has been operating as a monopoly for seven decades. The business has worked under service contracts with foreign firms, as opposed to profit-sharing contracts. The absence of profit or production sharing contracts has kept most foreign energy firms at bay. The country's energy sector has suffered with falling levels of output due to a lack of investment. In the last ten years, Pemex increased its annual investment by five-fold to $20 billion, but its production fell from 3.59 million barrels per day in 2002 to 2.93 million barrels per day in 2012.

The oil reforms could bring an energy revival to the country which holds15 billion barrels of oil (as much as Kuwait) and could be home to …. Read More

This Oilfield-Services Titan Stands Out From the Crowd

From  The Motley Fool

Oilfield-services titan Schlumberger (NYSE: SLB) recently released its quarterly results, in which it beat both revenue and income estimates while significantly increasing its buyback program. Analysts at Global Hunter have identified that the company could deliver solid earnings of more than $6 per share by 2014, up from the current $4.59 per share. Its competitive advantage lies in its global footprint and technological prowess.The industry outlook is also looking bright as Schlumberger is expecting a “double-digit” uptake in customer spending on oil exploration. 

Sector review

The strong performance was attributed to more deep-water drilling. Schlumberger reported an 8.1% increase in quarterly revenue to $11.2 billion, $30 million above consensus, which translated into EPS of $1.15 per share, $0.04 above estimates. The international segment outperformed the North American units; the former registered sales growth of 8%, while the latter saw a 2% increase. Unlike its rivals Halliburton (NYSE: HAL) and Baker Hughes (NYSE:BHI), Schlumberger earns about two-thirds of its revenue from outside of the U.S and Canada.

Schlumberger’s closest rival, Halliburton, also

How a Drop in This Commodity's Price Will Improve Halliburton's Margins

From The Motley Fool

The price of guar gum, one of the primary ingredients used by the oil and gas service industry giants, such as Halliburton (NYSE: HAL) and Schlumberger (NYSE: SLB) in hydraulic fracturing (or fracking) for shale gas, has fallen considerably this year. This is going to improve the margins of these companies and could even cause an increase in earnings, particularly for Halliburton, which dominates the North American market.