Is Halliburton Company (NYSE:HAL) On Track for A Rebound?

October 19, 2017, 09:46 am ET, BY Simon M.- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

Halliburton Company (NYSE:HAL) is set to deliver its earnings report for the third quarter on Monday yet the question on most investors’ minds is whether the expected earnings will beat expectations. The company’s second quarter earnings report beat analysts’ expectations, which made the company’s shareholders to expect a repeat performance in the third quarter.

Article Summary

Halliburton stock has been on a downtrend for most of the year.

The drilling and exploration industries are recovering.

The company’s future prospects are bright.

Here’s the trading report on HAL.

The company’s second quarter earnings beat expectations by 21.1% with the company’s two business units, that is, drilling and evaluation, as well as, completion and production reporting better-than-expected revenues. However, the company’s stock has been on a downtrend for most of this year and is currently down by about 17.5% due to the low global oil prices.

The company also implemented massive cost-cutting programs in order to cope with the lower oil global oil prices and the reduced drilling and exploration activities in the US. The cost-cutting measures allowed the company to fare much better than its competitors such as Schlumberger Limited. (NYSE:SLB) and National-Oilwell Varco, Inc. (NYSE:NOV).

The company’s stock price was hit hard by the decline in drilling and exploration activities in the USA due to the country’s falling rig count, given that the US is its largest market. However, activities in the oil industry are recovering as more companies are investing in drilling and exploration, which bodes well for Halliburton’s future performance.

Halliburton was quite optimistic that the US oil production industry was on a recovery path, which led to many analysts increasing the earnings estimates for the third quarter. This means that the company’s underlying fundamentals are quite strong and that Halliburton is likely to beat analysts’ estimates in the third quarter.

However, the company faced an unexpected headwinds in the form of Hurricanes Harvey and Irma, which affected drilling activities to a slight extent. It is not clear whether the two hurricanes will have an impact on the company’s bottom line given the negative impact of the two hurricanes on the US oil industry.

The company’s future prospects are quite bright even as oil prices continue to rise accompanied by the rising US rig count, which combine for an extremely positive outlook. To find out more about where we believe this stock is going to go ahead of earnings, download our free custom trading report on the stock.

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