Halliburton oilfield service is waiting for the upward movement!

The oilfield services giant Halliburton (HAL) presented neutral reports on the results of the third quarter of 2021. The company’s total revenue grew by 29.7% and 4% QoQ, reaching $3,860 million. In addition, revenue in North and Latin America increased by 64% YoY.

Need to fulfill the terms of the OPEC+ deal in the Middle East and Asia, the company’s revenue decreased by 2% YoY. However, we expect to recover its growth region by the end of 2021, continuing this trend in 2022 as restrictions on oil production under the OPEC+ agreement.

Halliburton’s operating profit for July-September increased by 2.8% QoQ, to $446 million. Net profit increased by 4% QoQ, reaching $236 million, even though the same period last year ended with a loss of $17 million. In addition, Halliburton’s operating cash flow increased by 46.9% YoY to $617 million, which allowed the company to repay $500 million in debt ahead of schedule.

At the end of the quarter, the company’s net debt decreased by 7.3% compared to the level at the beginning of the year, reaching $7.7 billion. Although short-term debt amounted to $269 million, the cash and cash equivalents on Halliburton accounts are $2,632 million. Despite the high level of debt, the projected ratio of net debt to EBITDA by 2021 is 2.8, so Halliburton’s financial position does not cause concern.

Will pay the central part of the debt ($600 million) of the company in 2023. The company’s capital expenditures increased by 21.3% YoY to $188 million. The target volume of investments for future periods at the level of 5-6% of revenue. We are neutral in our assessment of Halliburton’s results for the third quarter.

The current level of HAL quotes, in our opinion, exceeds their fair assessment. As a result, we do not expect an increase in the value of the company’s securities.