Halliburton(US:HAL)2021-01-19 19:11Financial Data and Key Metrics Changes - Total company revenue for Q4 2020 was $3.2 billion, a 9% sequential increase, with adjusted operating income of $350 million, up 27% sequentially [10][30] - Full-year revenue was $14.4 billion, outperforming a global rig count decline of 38% [8] - Free cash flow for the year exceeded $1.1 billion, demonstrating strong cash generation capabilities [9][37] Business Line Data and Key Metrics Changes - Completion and Production (C&P) division revenue increased 15% sequentially, with operating income up 33%, resulting in an operating margin improvement of 2% [10][32] - Drilling and Evaluation (D&E) division revenue grew 2%, with operating income increasing by 11% [11][33] Market Data and Key Metrics Changes - North America revenue increased 26% sequentially, driven by higher drilling and completions activity [11][34] - Latin America revenue grew 12%, primarily due to increased pressure pumping and wireline activity [34] - International revenue remained flat sequentially, with activity in Latin America improving for the second consecutive quarter [11][34] Company Strategy and Development Direction - The company is focused on profitable growth in its strong international franchise and is driving strategic changes in North America [11][12] - Halliburton is accelerating the deployment of digital technologies and driving capital efficiency through strategic choices [11][19] - The company aims to participate in advancing a sustainable energy future by reducing its carbon footprint and collaborating with customers to enhance efficiency [27][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in oil prices and activity levels, expecting a low double-digit increase in international activity year-on-year in the second half of 2021 [12][16] - The company anticipates that the worst is behind them and expects to see favorable market dynamics as oil demand recovers [12][13] Other Important Information - The company recognized approximately $450 million in pre-tax impairments and other charges related to real estate asset adjustments [30][31] - Capital expenditures for 2020 totaled approximately $730 million, with plans to keep CapEx relatively flat at $750 million for 2021 [37] Q&A Session Summary Question: Outlook for full year 2021 in North America and international recovery - Management is optimistic about North America, expecting steady momentum and a low double-digit increase in international activity in the second half of 2021 [41][44] Question: Margin outlook for C&P and D&E divisions - C&P margins are expected to remain in the mid-teens for 2021, with potential for improvement if pricing momentum is achieved [48][50] - D&E margins are anticipated to reach double digits by the end of 2021, driven by market recovery and technology investments [50] Question: Demand for emission reduction solutions and pricing - Management noted that while demand for emission reduction solutions is robust, pricing dynamics will evolve as the market recovers [56][57] Question: Free cash flow expectations for 2021 - Free cash flow is expected to more than double in 2021, driven by operating profit improvements and increased activity [61] Question: International pricing trends and competitive landscape - Management indicated that international pricing remains competitive, with a focus on profitable growth and capital efficiency [68][69]