Tuesday, July 23, 2013

Halliburton Notes

HAL announced EPS a penny above expectations, and revenue slightly ahead of expectations.  Both are down vs. same quarter last year, but that's true throughout the natural gas industry.  Decent report card.  I'm holding, hoping for a nice dividend increase.

Analyst Actions: Halliburton Keeps Outperform, Target Lifted $2 at Credit Suisse; Shares Up Near 2%, Nearer 52 Week Highs

02:22 PM EDT07/23/2013 (MidnightTrader) -- Credit Suisse says: "No Good Performance Goes Unpunished. HAL did well this quarter and delivered on its promises, but this did not show up in the stock price-a buying opportunity. Activity is strong-frac stages are on par with 3Q12, the latest peak in Oilfield Service activity. Growth in North America (NAM) is the primary investor concern. Recovery in Canada and the Gulf Of Mexico (GoM) will drive NAM revenues higher in 3Q13, with service intensity and rig efficiency aiding onshore; but given a record frac stage run rate, significant upside will depend on pricing which should kick-in sometime next year. The outlook on fundamentals remains strong and we are raising 2013 EPS to $3.22 from$3.21 and 2014 to $4.26 from $4.08, and TP to $55 (from $53)."
Not Just a NAM OFS Company. "HAL delivered leading YoY international revenue growth for the 5th consecutive quarter (+14% YoY). 2Q13 international op income was 48% of EBIT. Eastern Hemisphere also grew at the top of the peer group, YoY revenue and EBIT were +16% and +23%, respectively, which even outpaced SLB's impressive Eastern Hemisphere performance of +12% revs and +18% EBIT and BHI's +12% rev and +9% EBIT YoY. HAL mentioned a few recent wins that will help propel its strength in the region including a $500mm fluids contract in Malaysia, an offshore cementing contract, and a $100mm five year contract in the North Sea. We project Eastern Hemisphere YoY growth to be 20% for sales and 27% for EBIT in 3Q13."

Long Term View Intact; Buy It. "We reiterate our Outperform rating and are increasing our TP to $55 from $53; our target continues to be based on 6.5x our 2014 EBITDA estimate (which is now $8.1B). HAL continues to trade at a discount to its closest peer: 29% and 24% on EV/Ebitda and P/E respectively, a discount we do not believe is justifiable given HAL's superior returns and international revenue growth."
Price: 45.90, Change: +0.82, Percent Change: +1.8


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