Halliburton Company announced today net income of $610 million, or $0.68 per diluted share, for the second quarter of 2023
FOR IMMEDIATE RELEASE - HOUSTON - July 19, 2023 - Halliburton Company (NYSE: HAL) announced today net income of $610 million, or $0.68 per diluted share, for the second quarter of 2023. This compares to net income for the first quarter of 2023 of $651 million, or $0.72 per diluted share. Adjusted net income4 for the second quarter of 2023, excluding the loss on transactions in Argentina, was $691 million, or $0.77 per diluted share. Halliburton's total revenue for the second quarter of 2023 was $5.8 billion compared to total revenue of $5.7 billion in the first quarter of 2023. Operating income was $1.0 billion in the second quarter of 2023 compared to operating income of $977 million in the first quarter of 2023.
"Halliburton's strong performance in the second quarter demonstrates the earnings power of our business. Total company revenue increased 14% and operating income grew 41% compared to second quarter of 2022 adjusted operating income5. Both of our divisions delivered strong margin performance across all regions.” commented Jeff Miller, Chairman, President and CEO.
"Oil and gas are critical to the global economy and meeting long term demand requires sustained capital investment. I am confident in the strength and duration of this upcycle and Halliburton's ability to outperform in it.
"I am pleased with the $798 million of free cash flow generation in the second quarter. Our strong cash flow generation gives me confidence in our ability to return more cash back to shareholders as evidenced by the $248 million of share repurchases this quarter,” concluded Miller.
Completion and Production revenue in the second quarter of 2023 was $3.5 billion, an increase of $67 million, or 2% sequentially, while operating income was $707 million, an increase of $41 million, or 6%. These results were driven by increased completion tool sales globally, higher artificial lift activity in North America, improved cementing activity and higher pipeline services internationally, and higher stimulation activity and well intervention services in the Gulf of Mexico.
Drilling and Evaluation revenue in the second quarter of 2023 was $2.3 billion, an increase of $54 million, or 2% sequentially, while operating income was $376 million, an increase of $7 million, or 2%. These results were primarily due to an increase in fluid services globally, and higher drilling activity in the Western Hemisphere and Saudi Arabia. These increases were partially offset by lower software sales in North America and the Eastern Hemisphere, and decreased project management activity in Saudi Arabia.
North America revenue in the second quarter of 2023 was $2.7 billion, a 2% decrease sequentially. This decline was primarily driven by decreased stimulation activity in U.S. land, which was partially offset by increased artificial lift activity in U.S. land, and higher activity across multiple product service lines in the Gulf of Mexico.
International revenue in the second quarter of 2023 was $3.1 billion, a 7% increase when compared to the first quarter of 2023.
Latin America revenue in the second quarter of 2023 was $994 million, an increase of 9% sequentially resulting from increased pressure pumping and improved wireline activity in Argentina, higher completion tool sales in Brazil, and increased activity across multiple product service lines in Mexico. Partially offsetting these increases was reduced activity in the Caribbean across multiple product service lines.
Europe/Africa revenue in the second quarter of 2023 was $698 million, an increase of 5% sequentially. This improvement was primarily driven by increased fluid services in the region, higher completion tool sales in Angola and Norway, and higher pipeline services in Norway. Partially offsetting these increases was lower software sales across the region.
Middle East/Asia revenue in the second quarter of 2023 was $1.4 billion, an increase of 6% sequentially, largely resulting from higher completion tool sales in Saudi Arabia, improved wireline activity and fluid services in the Middle East, and higher drilling services in the region. These improvements were partially offset by decreased project management activity in Saudi Arabia, and lower software sales in the region.
During the second quarter of 2023, Halliburton repurchased $248 million of common stock.
The Central Bank of Argentina maintains currency controls that limit our ability to access U.S. dollars in Argentina and remit cash from our Argentine operations. The execution of certain trades known as Blue Chip Swaps, effectively results in a parallel U.S. dollar exchange rate. This parallel rate, which cannot be used as the basis to remeasure our net monetary assets in U.S. dollars under U.S. GAAP, was 101% higher than Argentina's official exchange rate at June 30, 2023. During the second quarter of 2023, Halliburton entered into Blue Chip Swap transactions which resulted in a $104 million pre-tax loss.
During the second quarter, Halliburton kicked off its migration to SAP S4 which will take place over the next three years. This new system will provide important efficiency benefits, cost savings, visibility to our operations, and advanced analytics that will benefit Halliburton and its customers. We expect this upgrade to payback in three years after an investment of $250 million. For the second quarter 2023, we spent $13 million, or about $0.01 per diluted share, which is included in our results.
(1) Adjusted net income per diluted share is a non-GAAP financial measure; please see reconciliation of Net Income to Adjusted Net Income in Footnote Table 3.
(2) Adjusted operating margin is a non-GAAP financial measure; please see reconciliation of Operating Income to Adjusted Operating Income in Footnote Table 1.
(3) Free cash flow is a non-GAAP financial measure; please see reconciliation of Cash Flows from Operating Activities to Free Cash Flow in Footnote Table 5.
(4) Adjusted net income is a non-GAAP financial measure; please see reconciliation of Net Income to Adjusted Net Income in Footnote Table 3.
(5) Adjusted operating income is a non-GAAP financial measure; please see reconciliation of Operating Income to Adjusted Operating Income in Footnote Table 1.
Halliburton is one of the world's leading providers of products and services to the energy industry. Founded in 1919, we create innovative technologies, products, and services that help our customers maximize their value throughout the life cycle of an asset and advance a sustainable energy future. Visit us at www.halliburton.com; connect with us on Facebook, Twitter, LinkedIn, Instagram and YouTube.
The statements in this press release that are not historical statements are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the company's control, which could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: changes in the demand for or price of oil and/or natural gas, including as a result of development of alternative energy sources, general economic conditions such as inflation and recession, the ability of the OPEC+ countries to agree on and comply with production quotas, and other causes; changes in capital spending by our customers; the modification, continuation or suspension of our shareholder return framework, including the payment of dividends and purchases of our stock, which will be subject to the discretion of our Board of Directors and may depend on a variety of factors, including our results of operations and financial condition, growth plans, capital requirements and other conditions existing when any payment or purchase decision is made; potential catastrophic events related to our operations, and related indemnification and insurance; protection of intellectual property rights; cyber-attacks and data security; compliance with environmental laws; changes in government regulations and regulatory requirements, particularly those related to oil and natural gas exploration, the environment, radioactive sources, explosives, chemicals, hydraulic fracturing services, and climate-related initiatives; assumptions regarding the generation of future taxable income, and compliance with laws related to and disputes with taxing authorities regarding income taxes; risks of international operations, including risks relating to unsettled political conditions, war, including the ongoing Russia and Ukraine conflict and any expansion of that conflict, the effects of terrorism, foreign exchange rates and controls, international trade and regulatory controls and sanctions, and doing business with national oil companies; weather-related issues, including the effects of hurricanes and tropical storms; delays or failures by customers to make payments owed to us; infrastructure issues in the oil and natural gas industry; availability and cost of highly skilled labor and raw materials; completion of potential dispositions, and acquisitions and integration and success of acquired businesses and joint ventures. Halliburton's Form 10-K for the year ended December 31, 2022, Form 10-Q for the quarter ended March 31, 2023, recent Current Reports on Form 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors identified that may affect Halliburton's business, results of operations, and financial condition. Halliburton undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
Halliburton Company (NYSE: HAL) will host a conference call on Wednesday, July 19, 2023, to discuss its second quarter 2023 financial results. The call will begin at 8:30 a.m. CT (9:30 a.m. ET).
Please visit the Halliburton website to listen to the call via live webcast. A recorded version will be available under the same link immediately following the conclusion of the conference call. You can also pre-register for the conference call and obtain your dial in number and passcode by clicking here.
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