This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Halliburton Needs Drivers of Growth

NEW YORK ( TheStreet) -- Since reaching a high of $43.96 in February, shares of Halliburton (HAL - Get Report) have been in a holding pattern -- zigzagging down and up, but not really going anywhere.

However, that's not to suggest that the stock has underperformed. In fact, it's done the opposite, as shares are up more than 20% on the year. Since shares reached a low of $29.83 in November, Halliburton has soared more than 40%. Investors want more. But given the uncertainty that still remains within the oil service industry, pinpointing the stock's next move is not easy.

What's more, even if the sluggishness in rig counts have bottomed, as industry experts believe, there's still the issue of Halliburton's valuation to deal with. The stock's not cheap. More specifically, how much more upside can there be given the enormous run that stock already has been on? To that end, the first-quarter results, although decent, didn't signal a strong buy.

The Quarter That Was

There wasn't much to be excited about in Halliburton's first-quarter results. That said, these performances, along with those from rivals like Schlumberger (SLB) and Baker Hughes (BHI), need to be kept in the context of the overall industry, which has been marred by slumping oil prices.

In that regard, management deserves some credit for what was actually pretty decent results relative to expectations. Revenue rose slightly to $6.97 billion. Bears will argue that this was less than 2% year-over-year growth, while falling 4% sequentially.

While this might be true, Halliburton still managed to beat Street estimates of $6.88 billion. The rest of the results, however, were mixed. Some arrived as surprises while others didn't. For instance, that Halliburton did so poorly in North America was a bit of a letdown. This is despite margins arriving very strong.

Granted, weakness in North America has been an issue for some time. But Halliburton showed some signs of improvement in the fourth quarter. So an 11% drop in revenue, which came in at $3.71 billion, was also a disappointment. It's hard to fall in love with the stock at these levels, especially given Halliburton's 43% drop in operating income.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HAL $40.08 0.35%
FB $118.67 0.73%
GOOG $707.00 0.79%
TSLA $212.32 0.37%
YHOO $36.88 -0.16%


Chart of I:DJI
DOW 17,646.16 -14.55 -0.08%
S&P 500 2,046.02 -4.61 -0.22%
NASDAQ 4,700.6070 -16.4870 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs