01—Abstract
Summary
Summary of the 10-Q filed July 24, 2026. Cited figures are marked; the original filing is the authoritative source.
Halliburton Company (HAL) reported second-quarter 2026 total revenue of $5.7 billiona, up from $5.5 billion a year earlier, with operating income of $778 million versus $727 million.
Results included a net pre-tax credit of $95 millionb in impairments and other charges (credits), driven mainly by a $54 million gain from changes in ownership of an equity investment, a $10 million remeasurement gain, and a $48 million other credit primarily from a government refund recovery, partly offset by a $17 million loss on the sale of a portion of its chemical business. Net income attributable to the company was $534 million, or $0.64 per diluted share, compared with $472 million, or $0.55 per share, in the prior-year quarter. Completion and Production revenue was roughly flat at $3.2 billion with operating income down 8% to $474 million, while Drilling and Evaluation revenue rose 7% to $2.5 billion and operating income rose 8% to $338 million.
Middle East/Asia revenue fell 11% to $1.3 billionc due to conflict-related disruptions, while Latin America rose 15% and Europe/Africa/CIS rose 24%. For the first six months, revenue was $11.1 billion and operating income was $1.46 billion. Cash flow from operations was $1.1 billion, capital expenditures were $427 million, and cash and equivalents ended the period at $2.0 billion.
The company repurchased $308 milliond of stock and paid $285 million in dividends during the first half. Management expects 2026 capital spending of about $1.1 billion and expects shareholder returns in line with its framework of returning at least 50% of annual free cash flow. The company's long-term debt carrying value was $7.16 billion, and it reported $3.5 billion of available committed bank credit under its revolving facility.
The most significant open item is the IRS Notice of Proposed Adjustment related to the 2016 tax return, which concerns the $3.5 billion Baker Hughes termination fee deduction. If the IRS position prevails through appeals and litigation, the company estimates cash taxes due of approximately $640 million, plus interest for prior years. The company disagrees with the proposed adjustment and states that no payment is currently required.
02—Key points
Key Highlights
- Q2 2026 total revenue of $5,714 million, up from $5,510 million in Q2 2025; operating income of $778 million versus $727 million.
- Net income attributable to the company was $534 million ($0.64 per diluted share) versus $472 million ($0.55 per share) a year earlier.
- Impairments and other charges were a net pre-tax credit of $95 million in Q2 2026, driven by equity investment gains and a government refund recovery.
- Drilling and Evaluation revenue rose 7% to $2,512 million, while Completion and Production revenue was $3,202 million, roughly flat, with operating income down 8%.
- Middle East/Asia revenue declined 11% to $1,298 million due to conflict-related disruptions, while Latin America (+15%) and Europe/Africa/CIS (+24%) grew.
- Cash and equivalents were $2,048 million at June 30, 2026; six-month operating cash flow was $1,097 million, with $427 million in capital expenditures.
- IRS Notice of Proposed Adjustment on the 2016 tax return could result in cash taxes of approximately $640 million (plus interest) if the IRS position prevails; the company disagrees and is contesting it.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 24, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $5.71B$5.51B | +3.7% |
| Operating Expenses | $4.94B$4.78B | +3.2% |
| Operating Income | $778.00M$727.00M | +7.0% |
| Net Income | $538.00M$480.00M | +12.1% |
| EPS (Basic) | $0.64$0.55 | +16.4% |
| EPS (Diluted) | $0.64$0.55 | +16.4% |
| Shares Outstanding (Basic) | 836.00M857.00M | −2.5% |
| Shares Outstanding (Diluted) | 838.00M857.00M | −2.2% |
05—Questions
Frequently Asked Questions
How did Halliburton perform in the second quarter of 2026?
Total revenue was $5.7 billion, up from $5.5 billion in the second quarter of 2025. Operating income was $778 million, including a $95 million pre-tax credit in impairments and other charges, compared with $727 million a year earlier. Net income attributable to the company was $534 million, or $0.64 per diluted share.
What drove the segment results?
Drilling and Evaluation revenue increased 7% to $2.5 billion, driven by drilling-related services in North America, Europe/Africa and Asia. Completion and Production revenue was relatively flat at $3.2 billion, with operating income down $39 million, or 8%, due to activity mix, reduced stimulation pricing in US Land and Latin America, and the sale of a portion of the chemical business.
What is the IRS dispute and what could it cost?
The IRS issued a Notice of Proposed Adjustment in September 2023 proposing to 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. If the IRS position prevails through appeals and litigation, the company estimates cash taxes of approximately $640 million plus interest for prior years, though it states no payment is currently required.
How is Halliburton returning cash to shareholders and funding operations?
In the first six months of 2026, the company repurchased $308 million of stock and paid $285 million in dividends. The quarterly dividend is $0.17 per share, and the company expects 2026 shareholder returns in line with its framework of returning at least 50% of annual free cash flow. It had $2.0 billion of cash and $3.5 billion of available committed bank credit, and expects 2026 capital expenditures of about $1.1 billion.
What is the outlook given the Middle East conflict and oil prices?
The company reports that Middle East activity was disrupted by ongoing geopolitical conflict and is recovering from conflict-related lows, with the pace dependent on day-to-day developments. WTI averaged about $96 per barrel in the second quarter of 2026, up from about $72 in the first quarter. Management expects activity growth outside the Middle East to be led by production services, drilling, unconventionals and lift, while customers remain focused on capital discipline.
06—Continue