Halliburton third-quarter net income falls to $417 million from second quarter

Halliburton Company (HAL) said Tuesday that third-quarter net income was $417 million, or $0.50 per diluted share, as revenue was flat at $5.7 billion.

Excluding impairments and other charges and tax adjustments, adjusted net income was $501 million, or $0.60 per diluted share, the company said in a press release attached to a regulatory filing.

Here's how the company did:

• Net income: $417 million, or $0.50 per diluted share, vs. $534 million, or $0.64 per diluted share, in the second quarter
• Adjusted net income: $501 million, or $0.60 per diluted share, vs. $461 million, or $0.55 per diluted share, in the second quarter
• Revenue: $5,703 million vs. $5,714 million in the second quarter
• Operating income: $624 million vs. $778 million in the second quarter
• Adjusted operating income: $731 million vs. $683 million in the second quarter
• Adjusted EBITDA: $1.0 billion vs. $948 million in the second quarter

Operating margin was 10.9%, down from 13.6% in the second quarter. Adjusted operating margin was 12.8%, up from 12.0%.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, excludes impairments and other charges. On that basis it reached $1.0 billion, compared with $948 million in the second quarter.

The company recognized a pre-tax charge of $107 million for impairments and other charges in the quarter. Of that, $107 million was severance costs tied to the rationalization of its global headcount.

An additional $25 million was for inventory costs and write-downs. Those charges were partly offset by a $36 million gain from the sale of a portion of the company's shares in an equity investment.

Cash flow from operations was $368 million in the quarter. Free cash flow, calculated as operating cash flow less capital expenditures plus proceeds from asset sales, was $156 million.

Capital expenditures were $266 million in the quarter, and the company spent $42 million on its SAP S4 migration.

Halliburton repurchased approximately $250 million of its common stock in the quarter and paid dividends of $0.17 per share. Dividends totaled $141 million for the period.

Chairman, President and CEO Jeff Miller said, “I am pleased with Halliburton’s third quarter results.”

Here's how the company's segments did during the quarter:

• Completion and Production: revenue of $3.1 billion, down $113 million or 4% sequentially; operating income of $457 million, down $17 million or 4%
• Drilling and Evaluation: revenue of $2.6 billion, up $102 million or 4% sequentially; operating income of $391 million, up $53 million or 16%

Completion and Production revenue fell mainly on lower stimulation activity in the Western Hemisphere. Increased activity across multiple product service lines in the Middle East partly offset the decline.

Drilling and Evaluation gained on improved activity in the Middle East and Latin America and on drilling related services in the Western Hemisphere. Lower testing services internationally partly offset those gains.

By region, North America revenue was $2.2 billion, down 5% sequentially, driven by lower pressure pumping services in U.S. Land. International revenue was $3.5 billion, up 3% sequentially.

Middle East/Asia revenue rose 8% sequentially to $1.4 billion, on higher activity in Saudi Arabia and Kuwait. Latin America and Europe/Africa were each flat sequentially, at $1.1 billion and $1.0 billion.

Miller pointed to demand, saying the company is “another three months into one of the largest energy disruptions in history.” He said the work to restore production, rebuild inventories and strengthen energy security will drive multi-year demand growth for oilfield services.

The company gave an early outlook for 2027. Miller said, “Based on our early outlook for 2027, I expect mid-single digit revenue growth and operating margins of about 15%, an approximately 200 basis point improvement.”

The outlook assumes a flat North America market and does not require any recovery in North America hydraulic fracturing. Miller said, “To us, that recovery is purely upside.”

For the first nine months of 2026, revenue was $16.8 billion. Net income attributable to the company was $1,412 million, or $1.69 per diluted share.

Halliburton said it secured an integrated well construction and completions contract from Eni for the Cronos ultra-deepwater development in Block 6 of the Cyprus Exclusive Economic Zone.

The company also said it received an integrated contract from bp for the first appraisal campaign in the Bumerangue field, offshore deepwater Brazil. It has signed a multiyear agreement with Pampa Energía to support the digital transformation of its unconventional operations in Vaca Muerta.

Halliburton was awarded a multiyear agreement by Kuwait Oil Company to support development of the Ahmadi Innovation Valley. The company also signed memorandums of understanding with Eneva and WESCA covering Venezuela.

The filing does not disclose contract values for these awards. Halliburton Labs also added three companies to its ecosystem: Electroflow, Osmoses and SiTration.

The company will host a conference call Tuesday at 8:00 a.m. CT (9:00 a.m. ET), with a live webcast and a recording available for seven days afterward.