Halliburton Inc. (HAL) Stock | Down But Not Out

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Halliburton Company (NYSE: HAL)

 

Earnings Report

Today before the market opened, Halliburton Inc. (HAL) reported earnings that slightly missed the mark but considering the conditions their industry is in it could have been a lot worse. They released earnings of 31 cents per share on $5.58 billion in revenue while analysts polled at Thomson Reuters were expecting 27 cents per share on $5.64 billion in revenue. This is down nearly 35% from the same period last year, which came in at $1.19 per share on $8.7 billion in revenue. HAL is also in the midst of working with regulators for approval on its acquisition of Baker Hughes (BHI), which we should hear more on within the next couple quarters. Chairman and CEO Dave Lesar stated in the conference call:

“Activity levels and pricing took another hit across the globe as our customers respond to the impact of reduced commodity prices and the pressure that their own shareholders are putting on them. Considering the difficult headwinds that were working against us I’m actually very pleased with our overall financial results for the third quarter, especially for our Eastern Hemisphere operations.” TheStreet

I honestly thought they were going to release a worse earnings report than this with the decrease in drilling demand and the prices of oil over the past few months. However, HAL is hanging in there and is even positioning themselves for the recovery in oil prices as they cut billions of dollars in expenses and work to complete the BHI merger, which would also cut down on overhead expenses. I like the upside HAL has but I am still weary with oil prices where they are and the overall current market still being weak. HAL is down but they are definitely not out of the game and are worth keeping an eye on. Currently analysts have an average price target of $47.37.

 

HAL Technicals

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Shares opened down roughly 1.3% on Monday at $37.31 and continued to trade lower for the remainder of the day before closing at $37.36. Support was found around the $36.85 level as it tested that spot twice throughout the day and was able to regain some ground into the close. Look for support to come in at the $37 and $34.40 levels while resistance will be met at $38.50 and $40 levels. HAL put in a higher low after the big market sell off a couple months back, which could mean there is some more upside ahead so we will want to see that hold over the next couple weeks and I would really like to see it make a push for the 200 day moving average.

Looking at the bigger picture, HAL has been somewhat of a disappointment this year, which is to be expected given oil prices and the weak drilling activity in the states. Prices hit highs back in May at $50.20 before retreating back down to lows of $30.93 and as of the close today at $37.36, prices are down nearly 4.5% on the year as they struggle to gain momentum. Shares have been below the 200-day moving average all year and until they break that level, I won’t be interested in going long.

 

About Haliburton Company

Halliburton Co. provides services and products to the energy industry related to the exploration, development, and production of oil and natural gas. The company operates through two segments: Completion & Production and Drilling & Evaluation. The Completion & Production segment delivers cementing, stimulation, intervention, pressure control, specialty chemicals, artificial lift, and completion services. This segment consists of production enhancement, cementing, completion tools, boots & coots, multi-chem and artificial lift. The Drilling & Evaluation segment provides field and reservoir modeling, drilling, evaluation, and wellbore placement solutions that enable customers to model, measure, and optimize their well construction activities. This segment consists of Halliburton drill bits and services, wireline and perforating, testing and subsea, baroid, sperry drilling, landmark software and services, and consulting and project management. The company was founded by Erle P. Halliburton in 1919 and is headquartered in Houston, TX. MarketWatch

 

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