Earnings

Halliburton Books $107 Million Severance Charge As North America Revenue Falls 9%

The oilfield-services company ties the third-quarter severance cost to a global headcount cut, while its buyback and cash flow tell a mixed story.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

— 2 min read
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Halliburton Books $107 Million Severance Charge As North America Revenue Falls 9%

Halliburton, which provides products and services that help oil and gas producers drill, complete and maintain wells, recorded $107 million of severance costs in the third quarter, which it says is tied to the "rationalization of our global headcount," according to its 10-Q filed Friday. North America revenue fell 9% from a year earlier.

Severance, write-downs and a gain

The quarter's $107 million pre-tax charge was built from $107 million of severance, $25 million of inventory costs and write-downs, and $14 million of fixed and other asset write-offs. A $36 million gain from selling part of its stake in an equity investment partly offset them.

The second quarter looked very different. Halliburton booked no severance then and recorded a $95 million net credit in the same line, so the third-quarter charge reverses a quarter that flattered results. A year earlier, the third quarter carried $392 million of impairments and other charges, including $169 million of severance.

Operating income was $624 million, against $356 million a year earlier. Net income was $419 million, up from $20 million.

North America shrinks, abroad grows

North America revenue fell to $2.160 billion from $2.364 billion, which the filing attributes to lower stimulation activity and reduced specialty chemicals sales after the sale of part of the chemical business. Higher well construction activity in U.S. Land partly offset the drop.

The Completion and Production segment's revenue fell 4% and its operating income fell 11%, to $457 million. Drilling and Evaluation revenue rose 10% and its operating income rose 12%, to $391 million.

International revenue rose 9%, with Latin America up 13% and Europe/Africa/CIS up 23%. Total revenue was $5.7 billion, up 2%.

CEO Jeff Miller said in the earnings release that his early outlook for 2027 calls for mid-single digit revenue growth and operating margins of about 15%, assuming a flat North America market.

Buybacks rise, cash flow slips

Halliburton repurchased 7.3 million shares for $252 million in the third quarter, up from 5 million shares for $201 million in the second. About $1.5 billion remained authorized as of September 30.

Cash from operations for the first nine months fell to $1.465 billion from $1.761 billion. Receivables absorbed $610 million and inventories $309 million, partly offset by $402 million from higher accounts payable. Cash stood at $1.8 billion, down from $2.2 billion at the end of 2025.

The company said it remains focused on reducing exposure to commoditized activity. Its SAP migration finishes in the fourth quarter, with about $34 million of expense expected.

The fourth-quarter report will be the first to show how the headcount cuts feed into segment margins.

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