The paragraph is an introduction to the Halliburton Company First Quarter 2025 Earnings Conference Call. The operator introduces David Coleman, who states that a recording of the webcast will be available for seven days on Halliburton's website. Coleman is joined by Jeff Miller, CEO, and Eric Carre, CFO. He explains that the presentation may include forward-looking statements subject to risks and uncertainties detailed in Halliburton's SEC filings. He also mentions that non-GAAP financial measures will be included. Jeff Miller then presents the company's first-quarter highlights, reporting a total revenue of $5.4 billion and an operating margin of 14.5%. International revenue was $3.2 billion, a 2% decrease due to reduced activity in Mexico, but excluding Mexico, international revenue grew by mid-single digits.

In the second paragraph, Halliburton discusses its financial performance and the macro environment for oil and gas. Despite a 12% decline in North American revenue, the company generated $377 million in operational cash flow and repurchased $250 million of stock. The oil and gas sector faces uncertainty due to a dynamic trade environment and OPEC's production affecting commodity prices. Nonetheless, Halliburton affirms the critical role of oil and gas in global growth and highlights the importance of technology, collaboration, and safety. The company expresses confidence in its long-term success, citing $3.2 billion in quarterly international revenue.

The paragraph discusses Halliburton's international outlook for the year, noting a slight increase in risk compared to three months ago and expecting flat to slightly down year-over-year international revenue. Despite this, Q1 international activities remain strong, with Halliburton securing significant contracts extending through 2026 and beyond. Notably, contracts include work from Shell in Brazil, Suriname, and West Africa. These projects emphasize Halliburton's advanced technologies and service quality, which are central to maintaining their market competitive advantage. The company anticipates its international growth, particularly in unconventional drilling, artificial lift, intervention, and directional drilling, to outpace other business areas over the coming years.

The paragraph outlines progress and expectations in various sectors of the company's operations. In unconventional ventures, they mobilized Zeus equipment to the Middle East and anticipate trials soon. They've secured offshore work in Ghana within the artificial lift sector, projecting strong growth by 2025. The acquisition of Optime Subsea is expected to boost deep water interventions, while a partnership in directional drilling has delivered automated systems in Norway and the Middle East. The company reports a robust start in international markets for 2025, with positive customer feedback on their focus areas. In North America, first-quarter revenue saw a slight increase, with frack activity up but completion tool sales down. Customers are planning for 2025, which may lead to underutilized fleets and possible international fleet exports. Despite challenges, Halliburton anticipates outperforming the North American market due to a proven strategy, term contracts for Zeus fleets, and innovative technology.

The paragraph highlights Haliburton's recent achievements and strategy in the energy sector. It discusses a field visit by Secretary of the Interior Doug Burgum, showcasing the Zeus electric frack equipment built in Oklahoma. The company highlighted its successful deployment of the Zeus IQ technology, a closed-loop autonomous fracturing operation that uses real-time reservoir feedback, potentially transforming unconventional resource extraction. The paragraph emphasizes Haliburton's commitment to improving productivity and asset performance with advanced technologies, focusing on maximizing value and efficiency in North America while maintaining safety and service quality.

The paragraph details Haliburton's financial performance and strategy for maximizing value. The company's focus is on maintaining equipment, training, and leading technology innovation in North America to differentiate itself in the market and maximize value for customers. It plans to drive growth internationally, generate solid free cash flow by 2025, and return at least $1.6 billion to shareholders through buybacks and dividends. Financial details for Q1 2025 include a net income per diluted share of $0.24, adjusted net income of $0.60 per share, and a total revenue of $5.4 billion, a 7% decrease from Q1 2024. The company experienced a $356 million pre-tax charge due to severance costs and impairments. Segment results showed a decrease in both the completion and production and drilling and evaluation divisions, mainly due to decreased activity and sales.

In Q1, the company reported an operating income of $352 million, marking a 12% decrease compared to Q1 2024, with an operating margin of 15%. This decline was primarily due to decreased activity in Mexico and Saudi Arabia. International revenue dropped by 2% year-over-year, though Europe Africa and Middle East Asia saw a 6% increase each, attributed to improved activities in Norway, Namibia, Kuwait, and Saudi Arabia. However, Latin America and North America experienced revenue declines of 19% and 12% respectively, due to reduced activities in Mexico and the U.S. Corporate expenses in Q1 were $66 million, expected to remain stable in Q2. SAP migration costs were $30 million, with similar expenses anticipated for Q2. Net interest and other net expenses were $86 million and $39 million respectively, both expected to increase by $5 million in Q2. The effective tax rate was 22.1%, projected to rise to 23% in Q2. Capital expenditures totaled $302 million in Q1, with an expectation to be 6% of revenue for the entire year of 2025.

In the article paragraph, Haliburton reports a Q1 cash flow from operations of $377 million and a free cash flow of $124 million, while noting concerns about a fluctuating trade situation potentially impacting shares by $0.02 to $0.03 in Q2. The company anticipates a 1% to 3% revenue increase with stable margins in its completion and production division for Q2. However, the drilling and evaluation division may see flat to 2% lower revenue and a decline in margins due to seasonal software sales and startup mobilization costs. CEO Jeff Miller expresses confidence in Haliburton's strategy, highlighting strong international markets, technology leadership in North America, and a focus on technology, collaboration, and service quality to ensure long-term success.

The paragraph features a conversation between Neil Mehta from Goldman Sachs and Jeff Miller regarding the U.S. oil market activity. Neil asks about the impact of recent volatility and current commodity prices on rig and completion counts, and what oil price would influence customer behavior significantly. Jeff responds by observing that customers are processing recent changes, including commodity prices and tariffs, which have affected decision-making. He notes that no new equipment is being built, and a slowdown in activity could impact production. He suggests that operators in North America are inclined to work through these challenges, and any decline in activity is countered by its effect on production.

In the paragraph, Neil Mehta and Jeff Miller discuss the current situation in Mexico regarding its impact on margins for C&P and D&E. Jeff Miller talks about meeting with Victor Padia, the new CEO, and notes that the situation in Mexico is not settled and recovery is not expected immediately. However, he emphasizes the importance of oil and gas to Mexico's economy, which he believes will eventually lead to recovery, though the exact timing is uncertain. He mentions that meaningful decline rates in the market will drive recovery, but execution of plans will depend on various factors, including market and performance changes. Neil Mehta thanks Jeff for the insights, and the operator moves on to the next question from David Anderson.

The paragraph discusses Halliburton's growth prospects in Saudi Arabia, especially regarding opportunities in the Jafurah region, with expectations for portfolio growth there by 2025. Jeff Miller highlights Saudi Arabia's significance as a market, emphasizing the company's strengths in areas like unconventionals, interventions, and artificial lifts. J. David Anderson appreciates the positive outlook in Saudi Arabia but raises concerns about North American operations, specifically regarding margin progression, noting that margins declined in both segments this quarter and are expected to drop again in the second quarter. Eric Carre then plans to provide an overview of the margin progression from the first to the second quarter and further details on full-year margins by division.

The paragraph discusses the company's financial outlook for Q2, highlighting expectations for the C&P and D&E divisions. In North America, the C&P division's revenue is expected to remain flat, while international business shows growth, albeit with flat margins due to tariff impacts. For D&E, a $40 million drop in profits from Q1 to Q2 is anticipated, attributed to $10 million in tariffs, $20 million in mobilization costs for anticipated growth, and a $10 million impact from a shift in business mix. The guidance for Q2 is affected by these specific items, and the company anticipates that the margins in the second half of 2025 will align with those in 2024. The international business is a significant growth area for C&P, whereas North American growth is less certain.

The paragraph discusses the situation in the North American market and touches on international spending. The speaker mentions that the customer base in North America has changed significantly, particularly with the introduction of a technology called Zeus. This new technology offers various operational efficiencies, such as automation that reduces costs. Despite some uncertainties and data digestion, the speaker believes the company is in a strong market position. The conversation then shifts to international spending, where Jeff Miller notes that it appears relatively flat compared to previous expectations, with some softness, especially in Mexico. He hints at potential impacts in parts of the non-OPEC market due to these conditions.

The paragraph discusses various global activities and financial transactions within the company, highlighting growth and strategic operations in different regions such as Norway, Brazil, Suriname, Europe, Africa, and the Middle East. It mentions mobilization costs associated with integrated drilling and collaboration projects, anticipating growth in Q3 and Q4. The paragraph also touches on financial aspects, including a $345 million equity investment related to an increased ownership in VoltaGrid and the Optime acquisition, with a notable $350 million outflow in other operating items.

The paragraph discusses financial activities and strategic investments of Jeff Miller's company. It highlights the company's operating activities, including incentive payouts, tax payments, and restructuring charges. The conversation shifts to VoltaGrid, where the company is investing cautiously in the power sector, observing potential opportunities. Attention then turns to the North American market and Zeus IQ, a technology designed to enhance hydraulic fracturing efficiency by improving recovery rates using AI and real-time analysis of reservoir data. This technology aims to sustain margins during softer market periods by optimizing sand and water distribution in hydraulic fracturing operations.

In the conversation, Roger Read inquires about how free cash flow will be utilized, particularly in terms of dividends and share repurchases, given the updated financial guidance. Eric Carre responds by indicating that despite slightly lower free cash flow projections for the year, their strategy concerning cash returns and buybacks remains consistent with the previous year. Following this, Saurabh Pant from Bank of America shifts the discussion to the impact of tariffs, asking Jeff Miller and Eric Carre for more detail on the specific businesses or components affected and how they plan to address these challenges.

In the paragraph, Eric Carre discusses the early visibility of the potential impact of tariffs, estimating it to be around $0.02 to $0.03 in Q2. He mentions efforts to mitigate this impact through a diversified supply chain and various strategies, but emphasizes the need for more stability in tariff structures for clearer outcomes. The impact is estimated to affect 60% of the C&P product lines and 40% of the D&E business. Saurabh Pant seeks clarification on whether the anticipated recovery in D&E margins in Q3 and Q4 assumes a reversal of tariff impacts, to which Carre confirms it does based on current knowledge. Saurabh then asks Jeff about the international side, noting a significant year-over-year decline in Mexico, but observes mid-single-digit growth in other international regions. Jeff is asked to elaborate on the regions driving this growth and future expectations.

In the paragraph, Jeff Miller discusses expectations for significant growth in the company's activities across various regions in the upcoming quarters. He anticipates a strong performance in Europe, Africa, and the Middle East in Q3, driven by the start of several contracts and important business activities like intervention. He also expects a notable increase in activity in drilling and new business opportunities. In Q4, substantial growth is predicted for Latin America, particularly in Brazil and Argentina, though Mexico remains an outlier. Overall, the company is optimistic about its strategic approach centered on collaboration and asset value maximization. Following this, Scott Gruber of Citigroup raises concerns about potential risks to second-half activity and mentions that even with risks to sales, the Capital Expenditures (CAPEX) are still expected to trend above the company's Depreciation, Depletion, and Amortization (DD&A) at 6% of sales.

The paragraph discusses the considerations and strategies related to capital expenditures (CAPEX) for a company. Eric Carre emphasizes that CAPEX is somewhat self-regulating as it adjusts with revenue fluctuations over time, noting that most CAPEX for 2024 is based on orders from that year. Adjustments in spending would primarily affect the 2026 outlook, especially since current international activities remain flat. He also mentions potential impacts from tariffs on CAPEX. Jeff Miller adds that the company allocates capital to growth areas and technologies that show strong performance, ensuring effective capital allocation regardless of conditions. The conversation highlights the company's strategic planning for future investments and growth initiatives.

The paragraph discusses Halliburton's approach to its investment in VoltaGrid, highlighting that the company is keeping its options open regarding whether to maintain its stake as an equity investment or pursue majority ownership. Jeff Miller emphasizes the importance of thoughtful strategy and prudence with potential growth opportunities, including non-oilfield work and international expansion. He notes that Halliburton is evaluating various options and prioritizing strategic areas for distributed power, without hastily chasing trends. The conversation then shifts to Derek Podhaizer asking about Halliburton's outlook for the gas basin activities and the equipment market, with a focus on developments over the past three months.

The paragraph features a conversation between Jeff Miller and Derek Podhaizer about the state of gas markets and Halliburton's position in the offshore cycle. Jeff Miller expresses optimism about the gas market due to structural changes like increased power demand and LNG exports, which are expected to drive more activity. He notes that conversations with gas operators indicate satisfaction with current prices. Miller emphasizes unwavering structural demand for gas due to its reliability and affordability but refrains from predicting a specific inflection point. He also mentions that Halliburton has received more inquiries from gas operators. Derek Podhaizer asks about Halliburton's improved positioning in the current offshore cycle compared to previous ones, noting optimism in the company's outlook.

The paragraph discusses a company's optimistic outlook in the offshore exploration space, highlighting their technical capabilities and success in winning offshore contracts. The speaker emphasizes the value proposition in Deepwater and international projects, noting the higher stakes and the importance of alignment with customers to create asset value. This alignment boosts customer confidence in their performance. The conversation then shifts to a question about expected margin improvements in the second half of 2025 compared to 2024, with an estimated 300 basis points of improvement, and the speaker confirms this interpretation.

The paragraph is part of a conversation from a company's earnings call, where executives discuss the impact of mobilizing equipment due to winning additional work in the second quarter (Q2). They anticipate lower costs and incremental work in the second half of the year, according to their operational forecast. Douglas Becker asks if there's an expected decrease in activity later in the year. Eric Carre responds that it reflects the current forecast, while Jeff Miller notes customer feedback internationally doesn't suggest a downturn. The conversation shifts to severance charges, where Eric indicates these are accounted for in guidance, with a payback period of less than a year. Stephen Gengaro then inquires about the pressure pumping business's margin resilience over the past 5 to 10 years.

The paragraph involves a conversation between Jeff Miller and Stephen Gengaro discussing pricing strategies and contract management in the context of e-fleets and the C&P market. Jeff Miller explains that the company has been maintaining consistent pricing aligned with the value created by their technology, which contributes to a resilient and strategically advantageous market position. He highlights that a significant portion of their operations is under contract, with a focus on high-end technology, ensuring good returns. Additionally, the discussion touches on the differentiation of services like VoltaGrid in the decommoditized power generation market, with Jeff emphasizing the importance of maintaining a competitive advantage.

In the paragraph, Jeff Miller emphasizes the importance of having a sustainable competitive advantage through technology-driven differentiation for the long term. He reaffirms Halliburton's commitment to maximizing value in North America, expanding growth internationally, and creating value with innovative technology. Miller announces that Halliburton expects to generate substantial free cash flow and return at least $1.6 billion in cash by 2025. The conference call concludes with Miller expressing his anticipation to discuss progress in the next quarterly meeting.

This summary was generated with AI and may contain some inaccuracies.