Halliburton's Soft Revenue Lags Estimates, Goldman Sachs Analyst Seeks Clarity On 2025 Activities

Halliburton Company HAL shares are trading lower on Wednesday.

Goldman Sachs analyst Neil Mehta reiterated the Buy rating on the stock, with a price forecast of $36.

Halliburton reported a fourth-quarter revenue decline of 2.3% year-over-year to $5.610 billion, missing the consensus of $5.63 billion. Completion and Production revenue fell 4.2% YoY to $3.2 billion, with $629 million operating income.

The analyst noted that softer revenue was mainly due to a decline in Completion and Production, partially offset by Drilling and Evaluation. North America revenue was 7% below the analyst’s estimate, while international revenue was 3% higher.

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Mehta writes, free cash flow for the quarter was $1.104 billion, surpassing the analyst’s estimate of $930 million and consensus of $1.045 billion. This beat was attributed to better working capital and lower capital expenditures ($426 million vs the analyst estimate of $454 million).

During the quarter, the company repurchased approximately $309 million in common stock, in line with the analsyst’s estimate of $310 million.

The analyst is uncertain about 2025 revenue growth by region and is seeking clarity on expectations for activity in the international market, particularly in the Middle East.

Mehta has questions on how investors should view long-term margin expansion, especially in a flat activity environment.

Additionally, the analyst is ambiguous about Halliburton’s future participation in the power space, including its partnership with VoltaGrid. Finally, there is uncertainty around how capital returns in 2025 should be approached, the analyst highlights.

Price Action: HAL shares are trading lower by 1.51% to $29.09 at last check Wednesday.

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