Halliburton reported fourth quarter earnings of $0.69 per share Tuesday, beating Wall Street's $0.54 estimate by 28%. Revenue came in at $5.7 billion with operating margins of 13%.
The Houston-based company exceeded expectations despite a sharp decline in US drilling activity. The Baker Hughes rig count fell to 543 last week, down 37 rigs from January 2025.
Cost discipline drives beat
Halliburton's aggressive cost-cutting program paid off. The company generated $1.2 billion in operating cash flow and $875 million in free cash flow during the quarter.
Management returned 85% of free cash flow to shareholders in 2025, including $1 billion in share repurchases.
North America outlook cautious
The company expects North American revenue to decline by high single digits in 2026. Halliburton plans to stack uneconomic drilling fleets rather than chase market share at poor returns.
WTI crude trades near $60.70 per barrel, below many operators' breakeven costs. That has forced drillers to pull back, particularly in the Permian Basin.
International markets stable
Middle East and Latin American activity remains strong. CEO Jeff Miller said he expects the second half of 2026 to improve, with international markets holding steady.
Schlumberger reports Thursday, followed by Baker Hughes on Friday.