Halliburton Q3 2026 Earnings: International Growth Offsets North America Weakness

Halliburton (NYSE: HAL) reported third-quarter 2026 revenue of $5.703 billion, up approximately 2% from $5.600 billion a year earlier, while diluted EPS increased to $0.50 from $0.02. Adjusted EPS was $0.60, with international growth and stronger Drilling and Evaluation results offsetting weaker North American pressure pumping and Completion and Production activity.

Key Financial Results

Revenue increased modestly year over year and was essentially flat from the second quarter. GAAP operating income and EPS rose substantially, although lower impairment and tax charges accounted for much of the improvement; adjusted EBITDA was nearly unchanged from a year earlier.

Sequentially, adjusted operating income increased to $731 million from $683 million and adjusted EBITDA rose to $1.0 billion from $948 million despite flat revenue. This points to better underlying profitability compared with the second quarter.

Adjusted EPS, adjusted operating income and adjusted EBITDA are non-GAAP measures that exclude specified impairments and other items.

Business and Segment Performance

Halliburton’s two operating segments moved in opposite directions. Drilling and Evaluation grew both year over year and sequentially, while Completion and Production declined as lower Western Hemisphere stimulation activity outweighed increased Middle East activity.

Drilling and Evaluation benefited sequentially from higher activity across several product lines in the Middle East and Latin America, along with increased drilling-related services in the Western Hemisphere. Lower international testing activity provided a partial offset.

Geographically, North America revenue declined 5% sequentially to $2.2 billion, primarily because of lower U.S. land pressure-pumping activity. International revenue increased 3% to $3.5 billion and offset that weakness.

Middle East/Asia led the international performance, with revenue rising 8% sequentially to $1.4 billion on higher activity in Saudi Arabia and Kuwait. Latin America remained flat at $1.1 billion as lower Argentine stimulation activity offset growth in Mexico, while Europe/Africa held at $1.0 billion as gains in Nigeria balanced lower well-construction activity in Namibia.

Lower Charges Magnified the GAAP Earnings Rebound

The sharp increase in GAAP earnings was much larger than the underlying operating change. Halliburton recorded $107 million of pretax impairments and other charges in Q3 2026, compared with $392 million a year earlier. The prior-year quarter also included a $125 million tax expense related to a valuation allowance on U.S. foreign tax credits and a $23 million investment impairment in Argentina.

By contrast, adjusted EBITDA declined slightly year over year and its margin contracted from 18.0% to 17.5%. The sequential comparison was more favorable: adjusted EBITDA margin increased from 16.6% in Q2 to 17.5%, while adjusted operating margin reached 12.8%. The quarter therefore showed progress from Q2, but the year-over-year GAAP improvement should not be viewed as an equivalent increase in underlying earnings.

Cash Flow and Balance Sheet

Operating cash flow was $368 million and free cash flow was $156 million. Working capital consumed $330 million during the quarter, limiting cash conversion despite $419 million of consolidated net income. Capital expenditures totaled $266 million, partly offset by $54 million of proceeds from property and equipment sales in Halliburton’s free-cash-flow calculation.

Cash and equivalents stood at $1.843 billion on September 30, down $363 million from the end of 2025. Receivables increased to $5.515 billion from $4.942 billion, while inventories rose to $3.265 billion from $2.976 billion. Total debt, including current maturities, was approximately $7.162 billion and was essentially unchanged from year-end.

Halliburton repurchased approximately $250 million of shares and paid $141 million in dividends during the quarter. It also incurred $42 million of expense related to its SAP S4 migration.

2027 Outlook

Management provided an early quantitative outlook for 2027. The framework depends on international and operational gains rather than a recovery in North American hydraulic fracturing.

Achieving the margin target will require Halliburton to build on the sequential improvement recorded in Q3 while managing the weaker North American environment.

Recent Insider Transactions

The supplied insider transaction data lists the ten most recent reported transactions as direct-holding sales. The records provide transaction values but not share quantities, and the sales alone do not establish the insiders’ views of Halliburton’s prospects.

Risks for Investors to Watch

• Further North American weakness: Lower U.S. land pressure pumping drove a 5% sequential decline in North American revenue. The 2027 outlook assumes a flat regional market, so a further contraction could make the revenue and margin objectives more difficult to achieve.
• Margin execution: Adjusted profitability improved sequentially, but adjusted EBITDA margin remained 50 basis points below the prior-year level. Reaching an operating margin of about 15% in 2027 requires approximately 200 basis points of improvement.
• Working-capital pressure: Working capital used $330 million in Q3 as receivables and inventories remained above year-end levels. Continued working-capital consumption could constrain free cash flow and capital returns.
• Dependence on international activity: International growth, particularly in Saudi Arabia and Kuwait, offset North American weakness. Halliburton identifies political instability, conflict, sanctions, trade controls and foreign-exchange restrictions as risks to its international operations.

Summary

Halliburton’s Q3 2026 results combined modest revenue growth with a substantial GAAP earnings rebound, although lower charges and taxes made the headline profit improvement look stronger than the underlying year-over-year performance. Drilling and Evaluation and Middle East/Asia activity offset weaker North American pressure pumping, while sequential margin gains provided support for management’s early 2027 outlook. The main issues to monitor are execution against the targeted margin expansion, North American activity and the conversion of earnings into free cash flow.