$HAL Close To Breaking Long-Term Downtrend Line

21 paź 2019

HAL is rallying today on earnings. The best part is that earnings weren't that great. This might be a sign that investors think the worst is over for the company and HAL is going to bid higher.

HAL is up 6.95% right now after reporting Q3 GAAP EPS of $0.34 in-line and Revenue of 5.55B (-10.0% Y/Y) that missed by 270M.

Q3 earnings matched Wall Street estimates but revenues fall by a sharper than expected 10% Y/Y to 5.55B, as oilfield services providers cope with weak demand from shale oil producers in North America.

HAL says revenue from North America, which accounts for more than half its total, tumbled 21% Y/Y and 11% Q/Q, primarily due to lower pressure pumping activity and pricing.

Q3 international revenue improved 10% Y/Y but came in flat Q/Q at 2.6B, highlighted by increased cementing activity in the Eastern Hemisphere and activity increases in Argentina.

Q3 completion and production revenue sank 16% Y/Y and 8% Q/Q to 3.51B, missing expectations of 3.66B, and drilling and evaluation revenue rose 2% Y/Y but fell 4% Q/Q to 2.04B and missed consensus of 2.15B.

HAL's results "bring into crystal-clear focus the speed with which North America land well construction and completion activity eroded during course of Q3," Tudor Pickering Holt analysts write.

Rival Schlumberger (NYSE:SLB) reported similar difficulties in North America, saying last Friday it had recorded a 1.58B goodwill impairment charge related to its North American pressure pumping business.

As always, trade with caution and use protective stops.

Good luck to all!