Halliburton lifts payout for the first time in more than 7 years

Drilling completions Source: Halliburton Co.

Halliburton Co. more than doubled its dividend after the world’s top fracking provider recorded its biggest quarterly profit in more than half a decade while forecasting years of growth ahead.

The company joined larger rivals Schlumberger and Baker Hughes Co. in predicting a new multi-year expansion cycle for oilfield contractors, although Halliburton was the only one among the trio to boost shareholder payouts. The stock rose as much as 1.7 per cent in pre-market trading before paring some of those gains. 

“I expect the macro industry environment to remain supportive and the international and North America markets to continue their simultaneous growth,” chief executive officer Jeff Miller said in a statement on Monday. “Halliburton will accelerate cash flow generation, strengthen our balance sheet, and increase cash returns to shareholders in this upcycle.”

The hired hands of the oil patch are seeing a resurgence in profitability as crude demand rebounds from an historic global collapse. Schlumberger said last week it’s boosting spending as much as 18 per cent to $2 billion to gear up for the several years of growth it expects from clients around the world.

As the biggest oilfield contractor in the U.S. and Canada, Halliburton stands to gain the most from a spending recovery that’s led by North America, which larger rival Schlumberger said last week should grow by at least 20 per cent.  

Baker Hughes is also seeing waves of growth thanks to a revival in U.S. shale drilling. The Houston-based company last week posted orders that were up 28 per cent, led by the business line that cranks out massive turbines used to liquefy natural gas for export.

Excluding one-time items, Halliburton reported fourth-quarter profit of 36 cents a share, 2 cents more than the average estimate among analysts in a Bloomberg survey. 

The dividend hike to 12 cents a share was the company’s first payout increase since late 2014, when crude prices were tumbling from more than $100 a barrel earlier in the year. 

On a sequential basis, sales in the final three months of 2021 jumped by double digits in North America and overseas, respectively. The biggest revenue surprise came from the Middle East and Asia, where sales exceeded estimates by eight per cent.

© 2022 Bloomberg L.P.

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