Halliburton Company (NYSE:HAL) delivered a stronger-than-expected first-quarter 2026 results, topping earnings and revenue estimates while signaling an early recovery in North America.

Strong Earnings Performance And Cash Flow

Halliburton reported first-quarter 2026 results above expectations, with adjusted EPS of 55 cents beating the 50 cents consensus and revenue of $5.40 billion topping estimates of $5.30 billion.

Net income rose to $461 million from $204 million a year earlier, while revenue remained essentially flat year over year. Operating margin was 13%.

The oil service company generated $273 million in operating cash flow and $123 million in free cash flow, ending the quarter with $2.0 billion in cash and approximately $7.2 billion in debt.

Halliburton returned $100 million through share repurchases and paid a 17 cents dividend, while incurring $42 million in SAP S4 migration costs.

CEO Jeff Miller said North America is in the "early innings of a recovery," while international operations remained resilient despite Middle East disruptions, which reduced earnings by about 2 cents to 3 cents per share.

Segment And Regional Performance

Completion and Production revenue declined 3% to $3.0 billion, while operating income fell 17% to $439 million, due to weaker North America activity and softer Middle East demand.

Drilling and Evaluation revenue rose 4% to $2.4 billion, with operating income flat at $351 million, supported by strength in Latin America and Europe.

North America revenue fell 4% to $2.1 billion, while international revenue increased 3% to $3.3 billion, driven by growth in Latin America and Europe/Africa, partly offset by a 13% decline in the Middle East/Asia region.

Insights From Earnings Call

Halliburton management expects mid- to high-single-digit international growth outside the Middle East in 2026, led by Latin America, and warned the conflict could impact second-quarter EPS by 7 cents to 9 cents.

For the second quarter, Completion and Production revenue is expected to rise 4% to 6% sequentially with margin expansion of 50 to 100 basis points, while Drilling and Evaluation revenue is projected to be flat to down 2% with margins declining 75 to 125 basis points.

Executives highlighted improving conditions in North America, citing tighter frac capacity, stronger spot demand, and better visibility into the second half, while maintaining a focus on returns over capacity expansion.

Halliburton also pointed to a multi-billion-dollar YPF contract in Argentina, marking the first international deployment of Zeus Electric fracturing, as well as continued offshore momentum in Suriname.

Halliburton expects full-year capex at about $1.1 billion, with cost pressures from Middle East disruptions remaining manageable.

Goldman Sachs First Take

Goldman Sachs analyst Neil Mehta maintained a Buy rating and raised the price forecast to $44 from $40, implying about 20% upside, based on EV/EBITDA and free cash flow yield.

The firm said Halliburton delivered $974 million in adjusted EBITDA, about 3% above estimates and consensus.

North America revenue exceeded expectations by 6%, while international revenue missed by 2%. Completion and Production margins modestly outperformed, offset by weaker Drilling and Evaluation trends.

Free cash flow of $123 million missed estimates due to working capital headwinds, and share buybacks of $100 million came in below Goldman's $250 million forecast.

The firm highlighted Middle East exposure, North America pricing, margins, and capital returns as key focus areas.

Price Action: HAL shares are trading 4.23% higher at $38.24% at the time of publication on Tuesday.

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