What Halliburton (HAL) Said on Its Q3 Earnings Call

Key Points

• Halliburton exceeded expectations in Q3 2026, reporting $5.7 billion in revenue, a 12.8% adjusted operating margin and adjusted EPS of $0.60. The company also repurchased approximately $250 million of common stock.
• International operations drove performance, with revenue up 3% sequentially and 9% year over year, led by Drilling and Evaluation. North American revenue fell 5% sequentially as hydraulic fracturing recovery lagged expectations.
• Halliburton expects roughly flat fourth-quarter revenue of $5.7 billion but improved margins and EPS of $0.62–$0.64; its early 2027 outlook calls for mid-single-digit revenue growth and approximately 15% operating margins, supported by cost savings and international growth.

Halliburton NYSE: HAL reported third-quarter 2026 revenue of $5.7 billion and adjusted operating income of $731 million, producing an adjusted operating margin of 12.8%. Adjusted net income was $0.60 per diluted share.

Chairman, President and CEO Jeff Miller said revenue exceeded the company’s expectations and that management took “important steps” toward improving margins. The company repurchased approximately $250 million of common stock during the quarter.

International revenue reached $3.5 billion, up 3% sequentially and 9% year over year, while North America revenue was $2.2 billion, down 5% sequentially and 9% from a year earlier. Miller said Halliburton expects multiyear demand growth for oilfield services as the industry works to restore production, rebuild inventories and strengthen energy security.

International strength led by D&E

Executive Vice President and COO Shannon Slocum said international results benefited from strong performance in the company’s Drilling and Evaluation, or D&E, division. D&E exceeded the company’s expectations for revenue and improved operating income margin by 150 basis points sequentially.

In the Middle East, Halliburton reported sequential improvement despite inflationary pressures. Slocum said fourth-quarter Middle East revenue is expected to rise both sequentially and year over year, supported by a full quarter of Jafurah completions activity and expanded share across integrated and discrete services in Saudi Arabia.

Outside the Middle East, the company expects 2026 year-over-year growth of about 12% across its international regions. Slocum highlighted work awarded by BP for the Bumerangue appraisal program in Brazil and by Eni for the Cronos ultra-deepwater gas development in Cyprus, citing Halliburton’s drilling, automation, formation evaluation, fluids, cementing and completions technologies.

The company also said it remains on track toward its target of adding $3 billion in annual revenue by 2028 from growth engines including production services, drilling, unconventionals and artificial lift. Planned developments include the expected year-end startup of a North Sea stimulation vessel and the fourth-quarter deployment of Halliburton’s first ZEUS fleet in Argentina.

In artificial lift, Halliburton secured a multiyear electric submersible pump rental contract with a major operator in Argentina, its largest award of the quarter. It also made installations in the United Arab Emirates and offshore Congo and received its first offshore ESP order in Brazil.

Slocum said Halliburton is open for business in Venezuela, where it has management and facilities in place, moved equipment into the country and generated third-quarter revenue across multiple product lines. He said the company expects solid growth over time, though noted it would not occur overnight.

North America frac remained below expectations

North America results were affected by a slower-than-anticipated recovery in the hydraulic fracturing market. Slocum said Halliburton moved several frac crews to new customers at better pricing during the quarter, but the moves created more downtime than expected and weighed on regional performance and the Completion and Production, or C&P, division.

Management said the company operates its North American hydraulic fracturing business for returns rather than market share. While Halliburton’s 2027 framework assumes flat North American activity, Miller characterized any recovery in North American frac as upside to the company’s outlook.

Other North American land businesses showed growth. Sperry Drilling services, drill bits and drilling fluids revenue rose 23% year over year, according to Slocum. He attributed the growth to longer laterals, increasingly complex wells and demand for rotary steerable drilling, including the company’s iCruise system. Drill-bit revenue per rig was up double digits from the first quarter, he said.

Fourth-quarter and 2027 outlook

Chief Financial Officer Eric Carre said fourth-quarter company revenue is expected to remain roughly flat with the third quarter at approximately $5.7 billion, while operating income margin is expected to improve by about 70 basis points. Halliburton expects fourth-quarter earnings per share of approximately $0.62 to $0.64.

• C&P revenue is expected to increase 3% to 5% in the fourth quarter, with operating margin improving 75 to 125 basis points.
• D&E revenue is expected to decline 3% to 5% after a strong third quarter, while operating margin is expected to be flat to up 50 basis points.
• Full-year 2026 capital expenditures are expected to be about $1.1 billion, including $266 million in the third quarter.

For 2027, Halliburton issued an early outlook calling for mid-single-digit revenue growth and operating income margin of about 15%, representing expansion of roughly 200 basis points. The framework assumes North America remains flat year over year, Middle East activity stays in line with the second half of 2026, and other regions continue to grow.

Carre said about half of the projected margin improvement is expected to come from cost savings, including structural and operational cost reductions and the wind-down of spending associated with the company’s SAP S/4 implementation. Halliburton said it is now live on S/4 globally, completing what Carre described as a major business transformation.

The company expects approximately $100 million to $150 million in cost-reduction benefits in 2027 and $120 million to $150 million of savings from the declining S/4 program spend. The remainder of projected margin expansion is expected to come from incremental margins on revenue growth.

Carre said Halliburton expects about $1 billion in fourth-quarter cash flow from operations and approximately $1.6 billion in full-year free cash flow. He added that the company expects free-cash-flow margins to improve in 2027 as profits increase.

About Halliburton (NYSE:HAL)

Halliburton Company NYSE: HAL is a global provider of products and services for the energy industry. The company supports the exploration, development, and production of oil and natural gas through technologies and services used throughout the life cycle of a well.

Halliburton operates through two primary business segments: Completion and Production, and Drilling and Evaluation. Its offerings include cementing, stimulation, well completion, production enhancement, drilling services, drilling fluids, well testing, wireline and perforating services, formation evaluation, and project management.

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