Halliburton Jumps 5% as 2Q Earnings Top Estimates

Halliburton (HAL) stock jumped over 5% as the company’s second-quarter EPS topped analysts’ estimates.

Shares rose 5.2% to $13.76 in early afternoon U.S. trading after Halliburton reported adjusted earnings of $0.05 per share that came well ahead of analysts’ estimates of a net loss of $0.11 per share.

However, its top line fell about 37% year-over-year as lower demand for its services amid a decline in oil prices remained a drag.  Lower pumping activity took a toll on its completion and production revenues that fell 44% during the reported quarter. Meanwhile, reduced drilling activities and lower software sales pushed drilling and evaluation segment’s revenue down.

Despite a steep fall in revenues, effective cost-cutting measures drove its bottom-line and cash flows. Halliburton CEO, Jeff Miller, stated that the company’s 2Q performance shows its ability to “deliver solid financial results and free cash flow despite a severe drop in global activity”.

Cowen & Co. analyst Marc Bianchi last week upgraded Halliburton to buy from neutral with a $17 price target. And on July 13, Raymond James analyst Charles Peters increased the stock’s price target to $15 from $12 and maintained a Buy rating.

Halliburton stock has declined over 46% year-to-date and analysts have a cautiously optimistic Moderate Buy consensus on the stock. However, the average analyst price target of $12.15 implies about 7% downside potential from current levels. (See Halliburton’s stock analysis on TipRanks).