Halliburton earnings for the third quarter of 2026 showed improving adjusted profitability despite flat sequential revenue, as international growth offset weaker North American activity. The oilfield-services company announced on October 20 that adjusted earnings rose to $0.60 per diluted share from $0.55 in the second quarter, while reported earnings fell to $0.50 from $0.64.
Key Takeaways
- Revenue held at $5.7 billion as international growth offset a 5% sequential decline in North America.
- Adjusted operating income increased to $731 million, while reported operating income declined to $624 million.
- CEO Jeff Miller's early 2027 outlook calls for mid-single-digit revenue growth without a North American market recovery.
Table of Contents
- Halliburton earnings diverge on reported and adjusted measures
- International growth offsets weaker US pressure pumping
- Early 2027 outlook assumes no North American recovery
- Conclusion
Halliburton earnings diverge on reported and adjusted measures
Halliburton's third-quarter results announcement showed net income attributable to the company of $417 million, down from $534 million in the second quarter. Adjusted net income, which excludes impairments and other charges and tax adjustments, increased to $501 million from $461 million.
The same divergence appeared in operating profit. Reported operating income fell to $624 million from $778 million, but adjusted operating income rose to $731 million from $683 million. Third-quarter operating margin was 10.9%, compared with an adjusted margin of 12.8%.
Halliburton recognized $107 million in pre-tax impairments and other charges during the quarter. The adjusted measures are non-GAAP figures: they help separate the excluded items from operating performance but do not replace reported earnings.
| Item | Details |
|---|---|
| Third-quarter operating cash flow | $368 million |
| Third-quarter free cash flow | $156 million; a non-GAAP measure |
| Share repurchases | Approximately $250 million during the quarter |
| Dividends paid | $0.17 per share during the quarter |
| SAP S4 migration spending | $42 million during the quarter |
International growth offsets weaker US pressure pumping
North American revenue fell 5% from the second quarter to $2.2 billion, primarily because of lower pressure-pumping services on US land. International revenue increased 3% to $3.5 billion, keeping total company revenue broadly unchanged.
Middle East/Asia led the regional improvement, with revenue rising 8% sequentially to $1.4 billion on higher activity across several service lines in Saudi Arabia and Kuwait. Latin America and Europe/Africa revenue were flat.
The business segments reflected that uneven demand. Completion and Production revenue declined 4% to $3.1 billion, with operating income also down 4% to $457 million, mainly because of lower stimulation activity in the Western Hemisphere.
Drilling and Evaluation revenue increased 4% to $2.6 billion, while operating income rose 16% to $391 million. Halliburton attributed the gains primarily to stronger activity in the Middle East and Latin America and increased drilling-related services in the Western Hemisphere.
Early 2027 outlook assumes no North American recovery
Chairman, President and CEO Jeff Miller said revenue exceeded management's expectations in the third quarter. His early outlook for 2027 calls for mid-single-digit revenue growth and operating margins of about 15%, an improvement he described as approximately 200 basis points.
That outlook assumes a flat North American market and does not require a recovery in North American hydraulic fracturing. A rebound there would therefore be additional upside to management's stated assumptions, not a condition required to achieve the outlook.
The forecast remains management's expectation rather than a completed result. Miller said he expects work to restore production, rebuild inventories and strengthen energy security to support multiyear demand growth for oilfield services.
Conclusion
The next comparison is whether international growth and stronger Drilling and Evaluation profitability continue to offset North American weakness. Management's early 2027 outlook provides a benchmark, but it does not establish that the expected revenue growth or margin improvement has been achieved.
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