Halliburton’s 3Q’16 Earnings To See Improvement On The Back Of Increased Global Rig Count
As the earnings season sets in, the market expects Halliburton (NYSE:HAL), the world’s second largest oilfield services company, to report improvement in its revenue as well as profitability on a sequential basis, backed by the recovery in commodity prices and rig count over the third quarter. While the pricing pressure in the market is likely to continue in the remaining half of 2016, the Houston-based company believes that the industry’s worst downturn is finally subsiding and the commodity markets are progressing towards the path of recovery.
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Despite volatility in the market, commodity prices continued to remain resilient in the last three months. While crude oil prices did not show much improvement, natural gas prices jumped close to 35% during the quarter. This recovery, coupled with the unexpected improvement in commodity prices in the second quarter, resulted in a notable rise in the global rig count (oil and gas). While the demand for rigs in the North American and Middle East markets picked up during the third quarter, weakness in the Latin American and European markets continued to be a drag on the overall rig count.
Even though the rig count improved during the September quarter, it will not have an immediate impact on the oilfield contractor’s 3Q’16 margins. However, given Halliburton’s significant presence in the North American markets, the increased rig demand in the region will augment the company’s future recovery, assuming a sustained recovery in commodity prices over the next couple of quarters.
See Our Complete Analysis For Halliburton Here
Have more questions about Halliburton (NYSE:HAL)? See the links below:
- Schlumberger Versus Halliburton: Who Is Delivering Better Returns?
- Are The Commodity Markets On The Road To Recovery?
- How Will Halliburton’s Over Exposure To North American Markets Impact Its Profits?
- Here’s Why Trefis Has Revised Halliburton’s Price Estimate To $45 Per Share
- Halliburton Reports Depressed 2Q’16 Earnings Due To Persistently Low Drilling Demand
- Sluggish Drilling Demand Will Continue To Pull Down Halliburton’s 2Q’16 Results
- Why We Believe Halliburton Is Worth $40 Per Share?
- Halliburton’s 1Q’16 Earnings Plunge As Drilling Activity Remains Low, Particularly In North America
- How Will The Halliburton-Baker Hughes Deal Failure Impact Halliburton’s Equity Value?
- How Will The Halliburton-Baker Hughes Deal Impacted Halliburton’s Credit Capacity?
- Did Halliburton Pay A Higher Price For Baker Hughes’ Acquisition?
- Downward Revision of Halliburton’s Price From $42 To $38 Per Share
- How Valuable Are Halliburton’s North American Markets Compared To Its Middle East & Asian Markets?
- How Much Will Halliburton’s Revenue Grow If Oil Prices Rebound To $100 Per Barrel By 2018?
- What Is Halliburton’s Fundamental Value Based On 2016 Expected Numbers?
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Halliburton Company
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