Halliburton 3Q Sales Miss The Street; Shares Decline

Halliburton reported that its third-quarter revenues dropped 7% to $3 billion year-over-year, falling short of analysts’ estimates of $3.12 billion and sending its shares down 1.2% in Monday’s pre-market session.

Halliburton (HAL) earned an adjusted $0.11 in 3Q, which topped analysts’ expectations of $0.08. The oilfield services provider’s adjusted earnings grew 120% year-over-year and adjusted operating income increased 17%.

Halliburton’s CEO Jeff Miller said “We have a strong international business, a lean North America operation, and an efficient capital deployment strategy, all enabled by continued adoption of leading digital technologies that benefit our customers and Halliburton.” He added that “We believe executing on our strategic priorities will boost our earnings power reset and free cash flow generation today and as we power into and win the eventual recovery.” (See HAL stock analysis on TipRanks)

On Oct. 1, BMO Capital analyst Philip Jungwirth initiated coverage on Halliburton stock with a Hold rating and a price target of $14 (14.3% upside potential). The analyst said that the large-cap U.S. oilfield services sector is a “highly cyclical” and the stocks are “very anticipatory” and so the pace of recovery will be slow along with lower upstream spending.

Like Jungwirth, the Street is also sidelined on the stock. The Hold analyst consensus is based on 11 Holds, 5 Buys and 1 Sell. The average price target of $15.28 implies upside potential of about 24.7% to current levels. Shares have plunged about 50% year-to-date.