Wednesday, July 20, 2011

Halliburton (HAL) Q2 Earnings

Halliburton reported earnings of $0.80 per diluted share, representing net income of $739 million for the second quarter of 2011. During the same period in 2010, HAL reported net income of $480 million ($0.53 per diluted share).

HAL reported record-breaking revenue, for the second quarter of 2011 of $5.9 billion, representing an increase from $5.3 billion in the first quarter of 2011 and $4.4 billion in the second quarter of 2010.

Management attributes their strong quarter to improved pricing and equipment utilization in United States land. Nearly all product lines have benefitted from the increased activity in the unconventional oil and liquids-rich basins. Demand for energy remains strong around the globe. Increased interest in the shale environment should also benefit HAL. United States rig activity grew by 6% during the quarter. Rig count is a leading indicator of demand for oil services.
International activity remains flat. Activity has picked up in Latin America, Asia and Russia. However, the shutdown in Lybia, project delays in Iraq and sluggish activity in the United Kingdom and Algeria has not helped HAL.

As Halliburton continues to grow and demand for their services rise I believe that their stock price will surpass our target of $56.00. We currently own 50 shares of HAL purchased at $48.48 a share. HAL recently reached a new 52-week high of $55.95. I expect the next two quarters and 2012 to be very positive for the company.

-Alex Perez

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