01—Abstract
Summary
Summary of the 10-Q filed April 25, 2025. Cited figures are marked; the original filing is the authoritative source.
Halliburton Company's first-quarter 2025 Form 10-Q reports total revenue of $5.42 billiona, down 7% from $5.80 billion in the first quarter of 2024.
Operating income fell to $431 millionb from $987 million, reflecting $356 million of impairments and other charges, including $107 million of severance costs, a $104 million impairment of assets held for sale tied to a strategic decision to market a portion of its chemical business, and a $53 million impairment related to facility closures and lease terminations. Net income attributable to the company was $204 million, or $0.24 per diluted share, compared with $606 million, or $0.68 per share, a year earlier. Completion and Production revenue was $3.12 billion and operating income was $531 million, while Drilling and Evaluation revenue was $2.30 billion with operating income of $352 million.
Cash flow and liquidity weakened over the quarter. Operating cash flow was $377 millionc, against $487 million a year earlier, and cash and equivalents fell to $1.80 billion from $2.62 billion at December 31, 2024. The company repurchased 9.6 million shares for $250 million, paid $147 million in dividends, and spent $461 million on an equity investment and business acquisitions.
Total debt carrying value was $7.54 billiond, and the company reported $3.5 billion of available committed bank credit. Management said it does not intend to incur additional debt in 2025.
Management expects the decline in crude oil prices, which fell about 10% after the quarter ended amid tariff uncertainty and higher OPEC output, to negatively affect earnings per share in the second quarter of 2025. The filing also discloses an ongoing IRS dispute over the deduction of a $3.5 billion Baker Hughes termination fee, where the IRS position could result in cash taxes of approximately $640 million plus interest.
02—Key points
Key Highlights
- Total revenue of $5.42 billion, down 7% year over year; North America revenue fell 12% and Latin America fell 19%, while Middle East/Asia rose 6%.
- Operating income of $431 million, down from $987 million, after $356 million of impairments and other charges, including $107 million in severance costs.
- Net income attributable to the company of $204 million, or $0.24 per diluted share, versus $606 million, or $0.68 per share, in the prior-year quarter.
- Operating cash flow of $377 million, compared with $487 million in the first quarter of 2024; cash and equivalents declined to $1.80 billion from $2.62 billion at year-end 2024.
- Capital returns of $397 million in the quarter, including $250 million in share repurchases and $147 million in dividends, with about $2.8 billion remaining under the repurchase authorization.
- Management expects the decline in crude oil prices to negatively affect second-quarter 2025 earnings per share, and does not intend to incur additional debt in 2025.
- A pending IRS dispute over the 2016 deduction of a $3.5 billion Baker Hughes termination fee could result in cash taxes of approximately $640 million, plus interest, if the IRS position prevails.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed April 25, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $5.42B$5.80B | −6.7% |
| Operating Expenses | $4.99B$4.82B | +3.5% |
| Operating Income | $431.00M$987.00M | −56.3% |
| Net Income | $203.00M$609.00M | −66.7% |
| EPS (Basic) | $0.24$0.68 | −64.7% |
| EPS (Diluted) | $0.24$0.68 | −64.7% |
| Shares Outstanding (Basic) | 866.00M889.00M | −2.6% |
| Shares Outstanding (Diluted) | 866.00M891.00M | −2.8% |
05—Questions
Frequently Asked Questions
Why did Halliburton's operating income drop so sharply in the first quarter of 2025?
Operating income fell to $431 million from $987 million, mainly because of $356 million in impairments and other charges recorded in the quarter. These included $107 million of severance costs as the company rationalized global headcount, a $104 million impairment tied to a decision to market part of its chemical business for sale, and a $53 million impairment related to facility closures and lease terminations. Revenue declines in Completion and Production and Drilling and Evaluation also contributed.
How did the company's segments perform?
Completion and Production revenue was $3.12 billion, down $253 million, or 8%, and operating income was $531 million, down 23%. Drilling and Evaluation revenue was $2.30 billion, down 6%, and operating income was $352 million, down 12%. The filing attributes the Completion and Production decline mainly to lower pressure pumping services and completion tool sales in the Western Hemisphere.
What does the filing say about the company's outlook for the second quarter of 2025?
Management said that the roughly 10% decline in crude oil prices since the end of the first quarter, driven by tariff-related uncertainty and faster-than-expected OPEC production, is expected to negatively affect earnings per share in the second quarter of 2025. Management also said it continues to believe oil and natural gas will play a fundamental role in global economic growth.
What is the status of the IRS dispute over the Baker Hughes termination fee?
The IRS issued a Notice of Proposed Adjustment in September 2023 proposing to reclassify approximately 95% of the $3.5 billion termination fee paid to Baker Hughes in 2016 from an ordinary expense deduction to a capital loss. Halliburton strongly disagrees and is contesting the matter through the IRS administrative appeals process. If the IRS position prevails, the company estimates cash taxes of approximately $640 million plus interest. The company does not expect a final resolution within the next twelve months and states that no payment is currently required.
How strong is the company's liquidity and debt position?
At March 31, 2025, Halliburton had $1.8 billion of cash and equivalents and $3.5 billion of available committed bank credit under a revolving credit facility expiring April 27, 2027. Total debt had a carrying value of $7.54 billion, with approximately $471 million coming due from 2025 through 2027. The company reports no financial covenants or material adverse change provisions in its bank agreements, and its credit ratings are BBB+ from S&P and A3 from Moody's.
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