Halliburton Q4 Earnings Preview: Will Cost Cuts Drive a Beat?

Halliburton Company HAL is set to release fourth-quarter results on Jan. 21. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at a profit of 54 cents per share on revenues of $5.4 billion.Let’s delve into the factors that might have influenced the oilfield service firm’s performance in the December quarter. But it’s worth taking a look at HAL’s previous-quarter performance first.Highlights of Q3 Earnings & Surprise HistoryIn the last reported quarter, this Houston, TX-based provider of technical products and services to drillers of oil and gas wells beat the consensus mark, reflecting successful cost reduction initiatives. Halliburton reported adjusted net income per share of 58 cents, outperforming the Zacks Consensus Estimate of 50 cents. Revenues of $5.6 billion beat the Zacks Consensus Estimate by 4%.HAL matched the Zacks Consensus Estimate thrice in the last four quarters and beat in the other. This is depicted in the graph below:Halliburton Company Price and EPS Surprise Halliburton Company price-eps-surprise | Halliburton Company QuoteTrend in Estimate RevisionThe Zacks Consensus Estimate for the fourth-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 22.9% decline year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 3.5% deterioration from the year-ago period.Factors to ConsiderIn the third quarter, Halliburton’s Drilling and Evaluation segment delivered 2% sequential revenue growth to $2.4 billion, while operating income jumped 12% sequentially to $348 million, lifting margins to 16%. This outperformance was not driven by a single market but by a broad-based improvement that included higher project management activity in Latin America, stronger drilling services demand in North America, and increased software sales across Europe and Africa. Management expects this trend to continue into the fourth quarter, guiding flat to down 2% sequential revenue, with margin expansion of 50 to 100 basis points, signaling further operating leverage despite a softer macro backdrop. According to the Zacks Consensus Estimate, the company’s fourth-quarter Drilling and Evaluation operating income will be $365 million, up almost 5% from the July-September period.Halliburton’s decisive cost-cutting measures have likely set the stage for improved profitability in the fourth quarter of 2025. The company expects substantial cost savings, achieved through workforce optimization and operational streamlining. Capital spending is also being adjusted to reflect disciplined allocation in a volatile market. These moves, combined with selective idling of underperforming equipment, are expected to have enhanced operating efficiency and protect margins in the quarter to be reported.Finally, Halliburton’s pivot to digitalization and integrated services is gaining traction. The company’s growing technological edge, especially in its completions segment, is a key factor supporting its long-term upside. The company’s Zeus IQ platform, an autonomous, closed-loop hydraulic fracturing system, marks a significant step forward in automation and efficiency. By utilizing real-time reservoir feedback to guide fracturing without human intervention, Zeus IQ enhances well productivity and safety. This not only deepens client relationships but also ensures more stable and recurring revenues.Why a Likely Positive Surprise?Our proven model predicts an earnings beat for Halliburton this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That is the case here.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.HAL has an Earnings ESP of +3.78% and a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.Other Stocks to ConsiderHalliburton is not the only company looking up this earnings cycle. Here are some other energy firms that you may want to consider on the basis of our model:Kinder Morgan KMI has an Earnings ESP of +4.97% and a Zacks Rank #3. The firm is scheduled to release earnings on Jan. 21.The Zacks Consensus Estimate for 2026 earnings of Kinder Morgan indicates 6.1% growth. Valued at around $61 billion, KMI has lost 9.6% in a year.CNX Resources CNX has an Earnings ESP of +27.27% and a Zacks Rank #3. The firm is scheduled to release earnings on Jan. 29.CNX’s expected EPS growth rate for three to five years is currently 53.7%, which compares favorably with the industry's growth rate of 17.2%. Valued at nearly $5 billion, CNX has gained 19.1% in a year.Valero Energy VLO has an Earnings ESP of +3.12% and a Zacks Rank #3. The firm is scheduled to release earnings on Jan. 29.The Zacks Consensus Estimate for 2026 earnings of Valero Energy indicates 20.4% growth. Valued at around $57 billion, VLO is up 30.8% in a year.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Halliburton Company (HAL): Free Stock Analysis Report Valero Energy Corporation (VLO): Free Stock Analysis Report CNX Resources Corporation. (CNX): Free Stock Analysis Report Kinder Morgan, Inc. (KMI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks