Halliburton(US:HAL)2025-04-22 14:02Financial Data and Key Metrics Changes - Total company revenue for Q1 2025 was $5.4 billion, a decrease of 7% compared to Q1 2024 [21] - Adjusted operating margin was 14.5% with adjusted operating income of $787 million [21] - Cash flow from operations was $377 million, and free cash flow was $124 million [28] Business Line Data and Key Metrics Changes - Completion and Production division revenue was $3.1 billion, down 8% year over year, with operating income of $531 million, a decrease of 23% [22] - Drilling and Evaluation division revenue was $2.3 billion, down 6% year over year, with operating income of $352 million, a decrease of 12% [23] Market Data and Key Metrics Changes - North America revenue was $2.2 billion, a 12% decrease year over year, primarily due to lower stimulation activity [26] - International revenue was $3.2 billion, a decrease of 2% year over year, with significant declines in Mexico impacting overall performance [5][24] Company Strategy and Development Direction - The company emphasizes technology and collaboration as core to its competitive advantage, focusing on maximizing asset value for customers [11][20] - Halliburton aims to outperform the North America services market through a clear strategy that prioritizes returns over market share [15][19] - The company is optimistic about growth in international markets, particularly in unconventional, artificial lift, intervention, and directional drilling segments [12][13] Management's Comments on Operating Environment and Future Outlook - Management noted increased uncertainty in the macro environment due to trade issues and OPEC production, impacting commodity prices [6][10] - Despite challenges, management remains confident in the long-term role of oil and gas in global economic growth and the company's ability to adapt [7][9] - The outlook for international revenue is expected to be flat to slightly down, with strong tender activity providing some visibility [10][30] Other Important Information - The company recognized a pre-tax charge of $356 million related to severance costs and asset impairments [21] - Capital expenditures for Q1 were $320 million, with expectations of approximately 6% of revenue for the full year [27] Q&A Session Summary Question: Outlook for U.S. activity and rig count - Management indicated that customers are currently evaluating their activity scenarios, with a cautious approach to rig and completion counts due to recent volatility in commodity prices [34][36] Question: Trajectory of operations in Mexico - Management expressed uncertainty regarding recovery in Mexico, noting that the new administration is working through challenges, but expects eventual stabilization due to the importance of oil and gas to the economy [38][39] Question: Growth prospects in Saudi Arabia - Management expects growth in Saudi Arabia, highlighting opportunities in various segments, including unconventional and artificial lift [45][46] Question: Margin progression expectations - Management provided guidance indicating that margins are expected to improve in the second half of the year, driven by reduced mobilization costs and increased activity [114][115] Question: Impact of tariffs on business - Management discussed the anticipated impact of tariffs, estimating a $0.02 to $0.03 per share effect in Q2, with ongoing efforts to mitigate these impacts [78][79] Question: International spending outlook - Management noted that while international spending may be down slightly, regions like Norway and Brazil are expected to see growth, with a focus on contract startups in the second half of the year [58][84]