Middle Eastern/Asian operations' revenue jumped +28% and operating income rose +31%. However, the soft North American underbelly is the real story today. North American revenue increased 6%, while operating income fell 13%. Despite the loss, this overall performance is remarkable, given two weeks' storm-related downtime in the Gulf of Mexico and price declines in pressure pumping. It's too early to call an end to the industry's North American difficulties, but perhaps the worst is now in the past (i.e., 2008 recovery). HAL also used free cash flow to repurchase 11 million more shares in the quarter (or 1% of previously outstanding fully diluted shares).

Schlumberger (SLB - commentary - Cramer's Take) positively surprised on Friday and its shares were pummeled 11%. The next business day, HAL positively surprises and gains back over half of its SLB-related drubbing (i.e., up as much as 4% in morning trading). HAL shares are once again teasing all-time highs, but are unlikely to break out near-term given short-term technicals and market/industry share pressure (e.g., SLB fell another 3% this morning). HAL will probably pull back to its narrow five-year, upward-trending price channel. New industry-relative discount valuation will then further highlight HAL's existing one-third discount valuation to its own trading history (despite strong earnings). A buy-on-the-dip trade will then become a tremendously good idea, oil price conditional.

Halliburton Preview: A Buy-on-Dip Opportunity?