Halliburton NYSE: HAL reported first-quarter 2026 revenue of $5.4 billion and an operating margin of 13%, as the company navigated conflict-driven disruptions in the Middle East while pointing to early signs of recovery in North America and continued momentum across much of its international portfolio. Reported net income per diluted share was $0.55, and the company generated $273 million of cash flow from operations and $123 million of free cash flow, while repurchasing $100 million of common stock during the quarter.
Management frames a “structurally tighter” energy market
Chairman, President, and CEO Jeff Miller said the macro backdrop has shifted notably in the last 60 days, citing the implications of conflict in the Middle East for energy security and upstream investment. “Energy security is no longer simply a talking point,” Miller said, adding that he expects “increased investment in localized oil and gas developments and urgency to diversify sources of oil and gas.”
Miller also argued that rebuilding oil and gas production and inventories will take time, describing “cumulative production deficits” that are “in the several hundreds of millions of barrels and trending towards a billion.” In his view, that dynamic means “the world is fundamentally tighter oil and gas than it was 60 days ago,” supporting what he called a “durably stronger commodity environment” and a more constructive backdrop for upstream spending and oilfield services.
In the Q&A, Miller told Barclays’ David Anderson that the change is not temporary. “The supply overhang is no longer a concern,” Miller said, adding that energy-security-driven activity could extend for “a solid few years.”
International: Middle East disruption, but strength elsewhere
Halliburton’s international revenue was $3.3 billion, up 3% year-over-year. Executive Vice President and COO Shannon Slocum said activity in the Middle East has been affected most in offshore markets in Qatar, the UAE, and Saudi Arabia, as well as land markets in Iraq and Kuwait. She added that the closure of “the Strait” has forced alternative supply chain routes, increasing logistics costs, alongside higher prices for purchased materials and supplies.
Slocum characterized these as “manageable disruptions” and said Halliburton is working with customers to mitigate costs within contract terms. However, CFO Eric Carré said the conflict affected both divisions and reduced first-quarter results by approximately $0.02 to $0.03 per share.
Outside the Middle East, Slocum said results were better than expected and Halliburton anticipates year-over-year international revenue growth in the “mid- to high-single-digits” for the full year, led by Latin America. Carré’s geographic detail showed:
- Europe-Africa: $858 million, up 11% year-over-year, driven by increased drilling-related services and higher completion tool sales in Norway and improved pressure pumping services in Angola.
- Middle East-Asia: $1.3 billion, down 13% year-over-year, driven by conflict-related disruptions and lower activity across multiple product lines.
- Latin America: $1.1 billion, up 22% year-over-year, driven by higher activity across multiple product service lines in Ecuador, the Caribbean, and Brazil, plus improved stimulation activity in Mexico and Argentina.
Slocum highlighted an integrated completions award from YPF in Argentina, calling it a “multi-billion-dollar award” for integrated completion services. Under the contract, Halliburton plans to deploy “our full completions portfolio,” including Zeus electric fracturing services for the first time outside North America, and Octiv Auto Frac, which she said brings electrification, automation, and digital workflows to unconventional fracturing in Argentina.
Management also emphasized offshore momentum. Slocum cited a recent win in Suriname where PETRONAS selected Halliburton and Valaris for a strategic collaboration agreement, and said customers are choosing Halliburton for offshore projects due to “our technology, our execution, and our ability to collaborate earlier and more effectively throughout the well lifecycle.”
North America: early recovery signposts and tightening premium equipment
North America revenue was $2.1 billion, down 4% year-over-year. Slocum said winter weather delayed early-quarter activity in the Permian and Northeast, but those impacts were “more than offset” by stronger activity later in the quarter.
She pointed to what she described as early indicators of a recovery, including that “the frack calendar white space in the first half of the year is now gone,” reducing concerns that completion work would slip later. Slocum also cited an “uptick in inbound calls for spot work,” which she described as “the leading edge of capacity tightening.”
In response to questions from Bank of America and others, management reiterated its North America approach: prioritize returns and price over market share and deploy differentiated technology at scale. “Premium equipment is already tightening,” Slocum said in prepared remarks, while Miller later added that the industry is “within a handful of fleets…of being absolutely sold out” for premium dual-fuel-type fleets.
Miller also addressed questions about natural gas versus diesel economics in U.S. pressure pumping, saying the spread “reinforces the value in our e-fleets,” but emphasized that the Zeus platform’s subsurface performance—particularly Zeus IQ—has been the larger differentiator in customer value discussions.
Segment performance and second-quarter outlook incorporate conflict impacts
In Completion and Production, first-quarter revenue was $3.0 billion, down 3% year-over-year, with operating income of $439 million (down 17%) and margin of 15%. Carré said the results reflected lower stimulation activity in North America, lower completion tool sales, and decreased pressure pumping services in the Middle East, partially offset by higher completion tool sales in the Western Hemisphere and improved pressure pumping services in Africa.
In Drilling and Evaluation, revenue rose 4% to $2.4 billion, while operating income was $351 million and margin was 15%. Carré attributed performance to higher project management activity in Latin America and increased drilling-related services in Europe and the Western Hemisphere, partially offset by lower activity across multiple product service lines in the Middle East, lower wireline activity in the Eastern Hemisphere, and decreased fluid services in the Gulf of Mexico.
Looking to the second quarter, Carré said the timing and path to recovery in the Middle East remains unclear. Halliburton expects both lost revenue and higher costs (logistics and fuel), estimating an earnings impact of roughly $0.07 to $0.09 per share in Q2, embedded in divisional guidance. The company’s assumptions include disruptions similar to those at the end of Q1 and a restart of some offshore work about halfway through Q2; Carré added that if that restart is delayed, there could be an additional $0.03 to $0.05 impact.
For Q2, Halliburton expects Completion and Production revenue to increase 4% to 6% sequentially with margins improving 50 to 100 basis points. Drilling and Evaluation revenue is expected to be flat to down 2% sequentially due to seasonal software sales rolling off, with margins declining 75 to 125 basis points.
Capital allocation: buybacks expected to step up later in 2026
Asked about share repurchases running below recent quarterly levels, Miller said Halliburton’s philosophy on shareholder returns is unchanged but reiterated that the company began 2026 at a lower pace than its 2025 run rate, which he said had been discussed on the prior quarter’s call. “You can expect Q2 to be higher than Q1” and “H2 to be higher than H1,” Miller said, adding that the long-term objective remains “per-share value creation.”
On spending, Carré said capital expenditures were $192 million in Q1 and reiterated full-year 2026 capex guidance of about $1.1 billion. He also said capex is intended to remain within 5% to 6% of revenue, with 2026 guided on the low side of that range, and that spending has been “overweight towards the growth engines.” Carré noted that capex guidance does not include spending tied to a 400-megawatt queue referenced in discussion of VoltaGrid-related opportunities because the company does not expect that to occur in 2026.
In closing remarks, Miller reiterated his view that oil and gas markets are “structurally tighter” and said Halliburton is positioned with the “service lines, strategy, and technologies” to benefit across major basins worldwide.
About Halliburton NYSE: HAL
Halliburton is one of the world's largest providers of products and services to the energy industry, offering a broad portfolio that supports the lifecycle of oil and gas reservoirs from exploration and drilling through production and abandonment. Founded in 1919 by Erle P. Halliburton as an oil-well cementing company, the firm is headquartered in Houston, Texas and has developed into an integrated oilfield services company serving upstream operators globally.
The company's activities encompass drilling and evaluation, well construction and completion, production enhancement and well intervention.
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