Decisive cost actions and service delivery improvements are some of the factors that propelled Halliburton Company (NYSE:HAL) to impressive Q4 financial results. Strong margins and cash flow attest to a company shrugging the shackles of COVID-19 that had brought the energy industry to a standstill in the first half of last year.
Improving Fundamentals
Likewise, Chief Executive Officer, Jeff Miller, has reiterated that strategic priorities should allow the company to generate industry-leading returns and free cash flow amid the tailwinds presented by COVID-19. The executive remains confident of activity momentum gathering pace in the first quarter of the year. A growing pipeline of international customer opportunities should help shrug off weakness in some of Halliburton's key markets.
Halliburton shares rose after the oil giant reported a net loss of $235 million or 27 cents a share, against a net loss of $1.65 billion or $1.88 a share reported in 2019. Adjusted earnings topped estimates on totaling 18 cents a share against 15 cents a share expected by analysts.
COVID-19 Effects
However, Halliburton continues to feel the effects of the COVID-19 that continue to affect demand for its products and services in the vast energy industry. Likewise, revenue dropped 38% to $3.24 billion amid weakness in the oil markets. However, the company was still able to top analysts’ estimates of $3.21 billion.
Full-year revenue was down by 36% to $14.4 billion as operating loss more than tripled to $2.4 billion compared to an operating loss of $448 million for 2019. The world’s second-largest oilfield exited 2020 with $2.6 billion in cash and cash equivalent and $9.1 billion on long term debt.
It waits to be seen in the fourth quarter, and full-year earnings report is the catalyst that will help push the stock higher. The stock is up by 200% from lows of $6 a share recorded as the overall stock market came crashing in 2020 at the peak of the COVID-19 pandemic.