So, Halliburton Company (HAL) just reported its first-quarter 2026 results, and the story is pretty straightforward: things are looking up in North America, and the mess in the Middle East isn't derailing the whole operation. The oilfield services giant topped earnings and revenue estimates, and its stock popped more than 4% on the news. Not bad for a Tuesday.
The numbers themselves tell a tale of two regions. Adjusted earnings per share came in at 55 cents, beating the consensus estimate of 50 cents. Revenue was $5.40 billion, also above the expected $5.30 billion. Net income more than doubled year-over-year to $461 million from $204 million, though revenue was essentially flat. The company generated $273 million in operating cash flow and $123 million in free cash flow, ending the quarter with $2.0 billion in cash and about $7.2 billion in debt. They also returned $100 million to shareholders through buybacks and paid a 17-cent dividend.
Now, here's the interesting part. CEO Jeff Miller said North America is in the "early innings of a recovery." That's baseball-speak for "it's just getting started." Meanwhile, international operations held up despite disruptions in the Middle East, which only dinged earnings by about 2 to 3 cents per share. So, one region is waking up from a nap, and the other is dealing with some turbulence but keeping the plane in the air.
Where the Money Came From (And Didn't)
Breaking it down by business segment, Completion and Production revenue dipped 3% to $3.0 billion, with operating income down 17% to $439 million. The culprits? Weaker activity in North America and softer demand in the Middle East. On the other hand, Drilling and Evaluation revenue rose 4% to $2.4 billion, with operating income flat at $351 million, thanks to strength in Latin America and Europe.
Geographically, North America revenue fell 4% to $2.1 billion. International revenue, however, grew 3% to $3.3 billion, driven by Latin America and Europe/Africa. That growth was partly offset by a 13% decline in the Middle East/Asia region. So, the international story is a mixed bag: great in some places, not so great in others.
What Management Said on the Call
On the earnings call, management provided some color on what's next. They expect mid- to high-single-digit international growth in 2026, excluding the Middle East, with Latin America leading the charge. They also warned that the Middle East conflict could impact second-quarter earnings per share by 7 to 9 cents. That's a bigger hit than in Q1, but the company still seems to think it's something they can handle.
For the second quarter specifically, they see Completion and Production revenue rising 4% to 6% sequentially, with margins expanding by 50 to 100 basis points. Drilling and Evaluation revenue is projected to be flat to down 2%, with margins declining 75 to 125 basis points.
Executives highlighted improving conditions in North America, pointing to tighter fracturing capacity, stronger spot demand, and better visibility into the second half of the year. They're also sticking to a strategy of focusing on returns rather than just expanding capacity. In other news, they flagged a multi-billion-dollar contract with YPF in Argentina, which marks the first international deployment of their Zeus Electric fracturing technology, and noted continued offshore momentum in Suriname. Full-year capital expenditures are expected to be around $1.1 billion.
What the Analysts Think
Goldman Sachs (GS) analyst Neil Mehta maintained a Buy rating on Halliburton and raised his price target to $44 from $40, implying about 20% upside from current levels. His valuation is based on EV/EBITDA and free cash flow yield.
Goldman noted that Halliburton delivered $974 million in adjusted EBITDA, which was about 3% above both their estimates and the consensus. North America revenue came in 6% above expectations, while international revenue missed by 2%. Completion and Production margins modestly outperformed, but that was offset by weaker trends in Drilling and Evaluation. Free cash flow of $123 million missed estimates due to working capital headwinds, and the $100 million in share buybacks was below Goldman's forecast of $250 million. The firm said key focus areas going forward are Middle East exposure, North America pricing, margins, and capital returns.
In the end, Halliburton's message is one of cautious optimism. North America is showing signs of life, the Middle East is a headache but not a catastrophe, and the rest of the world is picking up some of the slack. Investors seemed to buy that story, with HAL shares trading 4.23% higher at $38.24 at the time of publication.
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