As Iran War Shakes Up Global Oil, Halliburton Earnings Point to a Middle East Recovery

Halliburton kicked off this quarter’s earnings season for oil services stocks. (Mira Oberman/AFP via Getty Images)

Key Points

• Halliburton stock rises after the company reports third-quarter revenue of $5.7 billion, beating analyst estimates of $5.58 billion.
• The company’s Middle East revenue grows 8% sequentially to $1.4 billion, driven by higher activity in Saudi Arabia and Kuwait.
• CEO Jeff Miller says Halliburton’s 2027 outlook assumes a flat North America market and doesn’t require a recovery in hydraulic fracturing.

The war in Iran has triggered one of the greatest oil supply shocks in global history, rattling investors as they’ve braced for an endlessly drawn-out conflict. Under the hood of that uncertainty, however, Halliburton’s latest quarterly earnings offered a rare boost for the stock and signaled early signs of recovery.

In almost any other quarter, falling revenue in North America and lower fracking activity in the Western Hemisphere would flash major warning signs. This time, however, Halliburton investors looked past that slowdown: A sharp rebound in the Middle East region buoyed the oilfield services giant, reversing the previous quarter’s sequential decline.

“We are another three months into one of the largest energy disruptions in history,” CEO Jeff Miller said in a press release Tuesday. “I expect the work to restore production, rebuild inventories and strengthen energy security will drive multi-year demand growth for oilfield services.

Halliburton’s revenue in the Middle East totaled $1.4 billion, an 8% sequential increase. In the second quarter, the company reported a 10% year-over-year revenue drop in that region.

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The improvement was primarily driven by higher activity across several multiple product service lines in Saudi Arabia and Kuwait. Analysts polled by FactSet expected revenue from the region of $1.28 billion.

That recovery signal seemed to help give management—and the stock—a boost as Halliburton outlined preliminary guidance for 2027.

Halliburton said it expects mid-single digit revenue growth and operating margins of about 15%, an approximate 200-basis-point improvement.

“This outlook assumes a flat North America market and does not require any recovery in North America hydraulic fracturing,” Miller said. “To us, that recovery is purely upside.”

Halliburton kicked off this quarter’s earnings season for oil services stocks, and its report didn’t appear to disappoint. Shares of Halliburton advanced 4.1% to $34.35 in premarket trading Tuesday.

Total revenue for the third quarter totaled $5.7 billion, above the analyst consensus call for $5.58 billion. Halliburton posted adjusted earnings of 60 cents a share, topping Wall Street’s estimates of 58 cents.

Completion and production revenue in the third quarter totaled $3.1 billion, a 4% decrease from the second quarter. Management attributed the drop to less fracking activity in the Western Hemisphere, though that was partially offset by the greater activity in the Middle East.

Though a further uptick in activity is required to help boost oilfield services stocks, Halliburton’s relatively flat growth—in line with consensus and guidance—has positioned it ahead of its peers. Only the oil equipment and services subsector is projected to see a year-over-year drop in average stock earnings across the energy industry.

Shares of rivals Baker Hughes and SLB rose 1.4% and 1.3%, respectively, in premarket trading Tuesday.

Write to Mariapaula Gonzalez at mariapaula.gonzalez@barrons.com

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