01—Abstract
Summary
Summary of the 10-Q filed October 24, 2025. Cited figures are marked; the original filing is the authoritative source.
Halliburton Company (HAL) reported third-quarter 2025 total revenue of $5.6 billiona, down 2% from $5.697 billion a year earlier, and operating income of $356 million versus $871 million in the prior-year quarter.
Results were weighed down by $392 millionb of impairments and other charges, including $169 million of severance costs and a $115 million write-off of fixed and other assets, primarily in North America Land. Net income attributable to the company fell to $18 million, or $0.02 per share, from $571 million, or $0.65 per share. The effective tax rate rose to 90.9%, driven by a $125 million valuation allowance on foreign tax credit carryforwards following the One Big Beautiful Bill Act.
Nine-month revenue was $16.5 billionc, down 5%, and net income attributable to the company was $694 million. Cash flow and liquidity remained solid. Cash flows from operating activities were $1.76 billion for the nine months, capital expenditures were $917 million, and cash and equivalents stood at $2.0 billion at September 30, 2025.
The company repurchased 32.9 million shares for $757 milliond and paid $436 million in dividends. Management said it intends to reduce capital expenditures in 2026 by 30% to approximately $1.0 billion, and it expects to save about $100 million per quarter from cost reductions taken in the third quarter. A new $3.5 billion five-year revolving credit facility was executed in August 2025 and remains fully available.
The filing also highlights outlook risks. Management lowered its activity expectations, citing a roughly 12% decline in WTI crude prices since the end of the second quarter as of October 21, 2025, and expects full-year 2025 international and North America revenue to decline year over year. The company continues to contest an IRS Notice of Proposed Adjustment tied to a $3.5 billion 2016 termination fee; the filing states the proposed adjustment could result in cash taxes of approximately $640 million, plus interest, if the IRS position prevails.
02—Key points
Key Highlights
- Q3 2025 total revenue was $5.6 billion, down 2% year over year; operating income fell to $356 million from $871 million, including $392 million of impairments and other charges.
- Q3 2025 net income attributable to the company was $18 million ($0.02 per share), compared with $571 million ($0.65 per share) in Q3 2024.
- The effective tax rate for Q3 2025 was 90.9%, driven by a $125 million valuation allowance on foreign tax credit deferred tax assets tied to the One Big Beautiful Bill Act.
- Nine-month operating cash flow was $1.76 billion, and capital expenditures were $917 million; cash and equivalents ended the period at $2.0 billion.
- Halliburton returned capital through $757 million of share repurchases and $436 million of dividends in the first nine months of 2025, with about $2.3 billion remaining under the buyback authorization.
- Management plans to cut 2026 capital expenditures by 30% to approximately $1.0 billion and expects about $100 million per quarter in cost savings from third-quarter actions.
- The IRS proposed adjustment on the 2016 Baker Hughes termination fee could result in cash taxes of approximately $640 million, plus interest, if the IRS position prevails; the company plans to contest it.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed October 24, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $5.60B$5.70B | −1.7% |
| Operating Expenses | $5.24B$4.83B | +8.7% |
| Operating Income | $356.00M$871.00M | −59.1% |
| Net Income | $20.00M$580.00M | −96.6% |
| EPS (Basic) | $0.02$0.65 | −96.9% |
| EPS (Diluted) | $0.02$0.65 | −96.9% |
| Shares Outstanding (Basic) | 849.00M881.00M | −3.6% |
| Shares Outstanding (Diluted) | 850.00M881.00M | −3.5% |
05—Questions
Frequently Asked Questions
Why did Halliburton's third-quarter profit fall so sharply?
Operating income fell to $356 million from $871 million, largely because of $392 million in impairments and other charges, including $169 million of severance costs and a $115 million write-off of fixed and other assets. Completion and Production operating income declined 23% and Drilling and Evaluation fell 14%, reflecting lower pressure pumping activity in North America and weaker pricing in US Land.
What drove the unusually high effective tax rate?
The company recorded a total income tax provision of $199 million on pre-tax income of $219 million, an effective tax rate of 90.9%. The main driver was an additional $125 million valuation allowance on foreign tax credit deferred tax assets, which the company attributed to the One Big Beautiful Bill Act, along with the impairments and other charges.
What is management's outlook for the rest of 2025 and 2026?
Management lowered its activity expectations and expects full-year 2025 international revenue and North America revenue to decline year over year. It plans to reduce 2026 capital expenditures by 30% to approximately $1.0 billion, and it expects to save about $100 million per quarter from cost reductions taken in the third quarter, while continuing to focus on free cash flow and capital discipline.
How is Halliburton managing its liquidity and shareholder returns?
The company ended the quarter with $2.0 billion of cash and equivalents and $3.5 billion of available committed credit under a new revolving facility that expires August 16, 2030. It repurchased 32.9 million shares for $757 million and paid $436 million in dividends in the first nine months, and it states that returns to shareholders are expected to be in line with its framework of returning at least 50% of annual free cash flow.
What is the IRS dispute and what could it cost?
The IRS issued a Notice of Proposed Adjustment in 2023 that would reclassify about 95% of the $3.5 billion termination fee paid to Baker Hughes in 2016 from an ordinary deduction to a capital loss. The company strongly disagrees and is contesting it through the IRS appeals process. If the IRS position prevails, the company estimates cash taxes of approximately $640 million, plus interest on amounts due for prior years, though no payment is currently required.
06—Continue