Halliburton Company reported third quarter fiscal year 2026 revenue of $5.703 billion, beating the analyst consensus estimate of $5.572 billion by 2.36%. This represents a 1.84% increase over sales of $5.600 billion in the same period last year.

Adjusted earnings per share came in at $0.60, surpassing the consensus estimate of $0.58 by 3.45%. Net income attributable to the company was $417 million, or $0.50 per diluted share, while adjusted net income reached $501 million. The company’s operating margin stood at 10.9%, with an adjusted operating margin of 12.8%.

Segment Performance

Revenue performance varied across the two primary segments. The Completion and Production segment saw a sequential decline, while the Drilling and Evaluation segment posted growth.

Completion and Production revenue decreased by $113 million sequentially, primarily due to lower stimulation activity in the Western Hemisphere, partially offset by increased activity in the Middle East. Operating income in this segment fell by $17 million to $457 million.

Conversely, Drilling and Evaluation revenue increased by $102 million to $2.6 billion, driven by improved activity in the Middle East and Latin America. Operating income for this segment rose by $53 million to $391 million.

Geographic Trends

International revenue grew by 3% sequentially to $3.5 billion, while North America revenue declined by 5% to $2.2 billion. The decline in North America was attributed to lower pressure pumping services in U.S. Land. However, Halliburton’s Sperry Drilling Services, drill bits, and drilling fluids businesses grew 23% year over year, outpacing rig count growth.

Middle East/Asia revenue rose by 8% to $1.4 billion, supported by higher activity in Saudi Arabia and Kuwait. Latin America and Europe/Africa revenues remained flat sequentially. Management noted that recent disruptions in the Middle East have not had a material impact on operations, with rig counts holding steady.

CEO Warns of Global Supply Shock

Chairman, President and CEO Jeff Miller warned of one of the largest energy supply disruptions in history, citing estimates that nearly 3 billion barrels of oil supply have been lost since the Middle East conflict began. He added that about 1 billion barrels have been drawn from global inventories, while elevated commodity prices and geopolitical uncertainty persist.

Miller expects efforts to restore production, replenish inventories and strengthen energy security to drive multiyear demand for oilfield services. He expressed confidence that the industry is entering an upcycle, supporting Halliburton’s growth outlook for 2027. The company secured an integrated services contract from Eni for the Cronos ultra-deepwater development in Cyprus and a contract from bp for the Bumerangue appraisal campaign offshore Brazil.

Outlook and Guidance

Halliburton expects about 12% YoY growth in international revenue outside the Middle East in 2026. This projection complements CEO Jeff Miller’s earlier guidance of mid-single digit revenue growth and operating margins of about 15% for 2027, assuming a flat North America market.

Miller stated that the growth strategy does not depend on a rebound in North American hydraulic fracturing, describing any recovery there as additional upside rather than a requirement. Chief Financial Officer Eric Carre said the company expects cost reductions of $100 million to $150 million next year.

Management specifically expects Completion and Production margins to improve 75 to 125 basis points sequentially in the upcoming quarter. For Q4FY26, the company projects Completion and Production revenue to increase 3% to 5% sequentially, while Drilling and Evaluation division revenue is expected to be 3% to 5% lower sequentially. Total Q4 revenue is expected to remain approximately flat at around $5.7 billion, with earnings per share projected at $0.62 to $0.64.

Strategic Growth Engines

Halliburton’s growth engines, including production services, drilling unconventionals, and artificial lift, are projected to add $3 billion in annual revenue by 2028. Key developments include:

• Artificial Lift: Expansion into 21 countries, with new installations in UAE, offshore Congo, and Brazil. A multi-year ESP rental contract was won in Argentina.
• Unconventionals: Operations in over six countries, including Argentina, Algeria, UAE, Kuwait, Australia, and Saudi Arabia. A new Zeus fleet is scheduled to start up in Argentina in Q4.
• Offshore Wins: Significant awards including the Boomerang appraisal program for BP in Brazil and the Cronos ultra-deepwater gas development for Eni in Cyprus.
• Venezuela: The company has reopened facilities and generated revenue in multiple product lines, with expectations of solid growth as major operators return.

What the Numbers Show

A divergence exists between the top-line stagnation and bottom-line improvement. While total revenue remained flat at $5.7 billion sequentially, adjusted EBITDA increased to $1.0 billion from $948 million in the prior quarter. This indicates that profitability gains were driven by margin expansion rather than volume growth. Specifically, the Drilling and Evaluation segment’s operating margin expanded significantly, offsetting margin pressure in Completion and Production.

The beat against analyst estimates for both EPS and revenue suggests that operational efficiencies and international demand strength compensated for the softness in the North American market. The 3.45% beat on adjusted EPS highlights effective cost management despite the sequential revenue dip in key segments.

The new guidance for a 75-125 bps improvement in Completion and Production margins signals management’s confidence in reversing the recent trend of declining profitability in that division, potentially stabilizing overall operating margins as North American activity remains subdued. Additionally, the completion of the SAP S/4 migration is expected to drive structural cost reductions of $120 to $150 million annually, contributing to the targeted 200 basis point margin expansion in 2027.

Other Financial Highlights

• The company recognized a pre-tax charge of $107 million related to impairments and other charges, primarily severance costs from global workforce reductions.
• Dividends of $0.17 per share were paid.
• Capital expenditures for SAP S4 migration amounted to $42 million. Full-year 2026 capex is expected to be about $1.1 billion.
• Cash flow from operations totaled $368 million, and free cash flow was $156 million. Free cash flow is expected to be sequentially higher in Q4.
• Halliburton repurchased approximately $250 million of its common stock during the period.
• The company ended the quarter with $1.843 billion in cash and $7.072 billion in long-term debt.

Halliburton Co faces a revised outlook from Piper Sandler, which lowered its price target to $42 while maintaining an Overweight rating. This adjustment comes just before the company’s scheduled third-quarter earnings release.

Analyst Consensus and Expectations

Wall Street forecasters anticipate the Houston-based energy services company will report quarterly earnings of 59 cents per share, a slight increase from 58 cents per share in the year-ago period. The consensus estimate for quarterly revenue stands at $5.58 billion. For context, the company reported revenue of $5.6 billion in the corresponding quarter last year.

Recent Strategic Developments

On September 21, Halliburton signed memorandums of understanding with Eneva and WESCA regarding energy development opportunities in Venezuela. This move signals potential expansion in Latin American markets.

Analyst Rating Changes

Several major firms have recently adjusted their outlooks for Halliburton stock. Below is a summary of recent analyst actions:

What the Numbers Show

The divergence in analyst sentiment is evident in the mixed price target adjustments. While UBS raised its target to $42, three other firms (Argus, Morgan Stanley, and TD Cowen) lowered their targets, though all maintained positive or neutral ratings. Piper Sandler’s reduction to $42 aligns with this broader trend of trimming expectations despite maintaining Overweight or Buy stances. Freedom Broker’s upgrade from Sell to Hold suggests a shift in perception regarding downside risk, despite the modest target increase to $37. The consensus revenue expectation of $5.58 billion indicates a slight contraction compared to the prior year’s $5.6 billion, aligning with the broader market caution reflected in the reduced price targets from key bull-case analysts.