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Halliburton Co (HAL) (Q1 2024) Earnings Call Transcript Highlights: Robust Revenue Growth and ...

  • Total Company Revenue: $5.8 billion

  • Operating Margin: 17%

  • International Revenue: $3.3 billion, up 12% year-over-year

  • North America Revenue: $2.5 billion, up 5% from last quarter

  • Cash Flow from Operations: $487 million

  • Free Cash Flow: $206 million

  • Common Stock Repurchase: $250 million

  • Net Income Per Diluted Share (Reported): $0.68

  • Adjusted Net Income Per Diluted Share: $0.76

  • Completion and Production Division Revenue: $3.4 billion

  • Drilling and Evaluation Division Revenue: $2.4 billion

  • Capital Expenditures: $330 million

Release Date: April 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q & A Highlights

Q: What prevents the industry from building out, and can you talk about your competitive advantage today and how you maintain that? A: Jeffrey Allen Miller - Halliburton Company - President, CEO & Chairman: The Zeus platform is a comprehensive platform that includes electric efficiency, embedded automation, and unique subsurface measurements with [Sensory]. These features create a competitive advantage by widening the moat around our leading position in the fracturing market. Being at scale allows for rapid technology innovation, which further strengthens our competitive position.

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Q: Can you talk about the opportunity set for Halliburton in the unconventional field in international markets, specifically in Saudi Arabia's Jafurah field? A: Jeffrey Allen Miller - Halliburton Company - President, CEO & Chairman: There's a lot of opportunity for Halliburton in unconventionals internationally, particularly with drilling technology. Our position in markets like Saudi Arabia's Jafurah field, where we have a liquid mud plant facility, is strong and offers significant growth potential as development progresses.

Q: Jeff, you've talked about wanting to drive your free cash flow per share higher. Can you talk about why you think the $250 million mark for share repurchases is the right number to use going forward? A: Eric J. Carre - Halliburton Company - Executive VP & CFO: The $250 million of buyback is based on our framework to return a minimum of 50% of free cash flow to shareholders. With an expected 10% increase in free cash flow year-over-year, this amount is a good base for repurchasing shares, aligning with our capital allocation strategy.

Q: How are you thinking about M&A as you plan to go forward for the business? A: Jeffrey Allen Miller - Halliburton Company - President, CEO & Chairman: Our strategy remains focused on organic growth and bolt-on M&A technology acquisitions that can accelerate our research and development, enhancing our market offerings more quickly.

Q: Jeff, could you characterize your thoughts on the future prospects of the OpEx versus the D&C cycle on a go-forward basis? A: Jeffrey Allen Miller - Halliburton Company - President, CEO & Chairman: We see significant organic growth opportunities in both OpEx and D&C cycles. Our current leverage in these areas is strong, and we continue to develop technologies that enhance our market position and drive growth.

Q: Jeff, I'd like to get back in on the international growth. How much of this growth is due to new products or services and how much to just underlying expansion? A: Jeffrey Allen Miller - Halliburton Company - President, CEO & Chairman: The growth is broad-based and driven by both underlying expansion and the introduction of new technologies. Our strategy of profitable growth allows us to gain a larger share of the growing market, supported by improved technology and pricing in a tight international market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.