Bear of the Day: Halliburton (HAL)

Halliburton Co. HAL is expecting a soft North American energy services market in 2025. This Zacks Rank #5 (Strong Sell) is expected to see declining earnings this year.

Halliburton is a leading provider of products and services to the energy industry worldwide. Founded in 1919, it provides technologies, products and services that help customers maximize the value of their assets throughout their life cycle.

Halliburton Meets on Earnings in the Fourth Quarter

On Jan 22, 2205, Halliburton reported its fourth quarter 2024 results and met on the Zacks Consensus of $0.70. It has only missed on earnings once in the last 5 years.

However, it was mixed results in its two largest segments, North America and International.

North American revenue in the fourth quarter fell 7% sequentially to $2.2 billion. The decline was primarily driven by lower stimulation activity and decreased fluid services in the U.S. land and Canada, along with lower wireline activity in U.S. land.

International revenue, however, rose 3% sequentially to $3.4 billion with a mixture of outlooks among the segments.

Latin America, for instance, fell 9% sequentially to $953 million primarily due to lower activity across multiple product lines in Mexico and decreased pumping services and lower wireline activity in Argentina.

However, Europe/Africa saw a jump of 10% sequentially to $795 million primarily due to improved drilling-related services in the North Seas as well as increased pressure pumping services and higher fluid services in Africa.

Middle East/Asia also showed growth, rising 7% sequentially to $1.6 billion primarily due to higher stimulation activity and increased fluid services in the Middle East, higher completion tool sales in Kuwait and the UAE and improved drilling services throughout Asia.

But Halliburton warned that North America would be sequentially “softer” in 2025 and it was already soft.

Analysts Cut Halliburton’s 2025 Earnings Estimates

The analysts were too bullish about 2025 going into the fourth quarter earnings report and have now cut estimates to get in line with the company’s current expectations. 10 estimates have been cut, and none raised, for 2025 since the earnings report.

The 2025 Zacks Consensus Estimate has fallen to $2.67 from $3.05 in the last 30 days. That is an earnings decline of 10.7% from 2024, when the company made $2.99.

Halliburton’s Shares Slide: Is it Cheap?

Shares of Halliburton have been sliding the last 6 months. It is down 25.1% during that time, including 6.2% in 2025.

It trades with a forward price-to-earnings (P/E) ratio of just 9.7. A P/E under 10 usually indicates a stock is dirt cheap.

But Halliburton’s earnings are also in decline, which indicates the possibility of it being a value trap.

Halliburton generated $2.6 billion in free cash flow in 2024 and shared some of it with shareholders. The company has a share repurchase program and pays a dividend, currently yielding 2.6%.

Investors interested in energy services companies like Halliburton might want to wait on the sidelines until the weakness in North America subsides and the earnings outlook improves.

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