Halliburton (HAL) Q1 2026 EPS jumps to $0.55 on stronger margins
Filing Impact
Filing Sentiment
Form Type
10-Q
Halliburton Company reported Q1 2026 revenue of $5.4 billion, roughly flat year over year, but profitability improved sharply. Operating income rose to $679 million from $431 million, aided by the absence of prior-year impairments. Net income attributable to the company more than doubled to $461 million, with basic and diluted earnings of $0.55 per share versus $0.24 a year ago.
Completion and Production revenue fell 3% to $3.0 billion and operating income declined 17%, reflecting weaker stimulation and pressure pumping, including conflict‑related disruptions in the Middle East. Drilling and Evaluation revenue grew 4% to $2.4 billion with flat operating income as stronger Latin America and Europe/Africa/CIS activity offset Middle East softness.
Cash flow from operations was $273 million, with $192 million of capital expenditures. Halliburton returned cash through $142 million of dividends and $100 million of share repurchases, ending the quarter with $2.0 billion of cash and equivalents and a $3.5 billion undrawn credit facility. The company continues to incur SAP S4 migration expenses and highlights an ongoing IRS dispute over the 2016 Baker Hughes termination fee that could result in approximately $640 million of additional cash taxes if resolved adversely.
Positive
- Profitability improved sharply: Q1 2026 operating income rose to $679 million from $431 million, and net income attributable to the company more than doubled to $461 million, with EPS increasing from $0.24 to $0.55 despite flat revenue.
- Healthy balance sheet and capital returns: Halliburton ended Q1 2026 with $2.0 billion in cash and equivalents and a $3.5 billion undrawn credit facility, while funding $192 million of capex and returning $242 million to shareholders through dividends and buybacks.
Negative
- IRS proposed tax adjustment: The IRS has issued a Notice of Proposed Adjustment seeking to reclassify most of a $3.5 billion 2016 termination fee as a capital loss, which Halliburton estimates could lead to about $640 million of additional cash taxes plus interest if ultimately resolved adversely.
- Geopolitical and regional pressures: Conflict in the Middle East reduced diluted EPS by an estimated $0.02-$0.03 and drove a 13% revenue decline in Middle East/Asia, while global inflation and new U.S. “global tariffs” add cost and supply‑chain uncertainty.
Insights
Q1 2026 shows much stronger profitability despite flat revenue.
Halliburton delivered Q1 2026 revenue of $5.4 billion, essentially unchanged year over year, but operating income surged to $679 million from $431 million. Net income attributable to the company climbed to $461 million, with EPS more than doubling to $0.55.
Margin expansion reflects the absence of prior‑year impairments and stable segment performance, even as Completion and Production revenue declined 3% and operating income fell 17%. Drilling and Evaluation grew revenue 4% with flat operating income, showing resilience amid Middle East disruptions that reduced diluted EPS by $0.02-$0.03.
Cash generation was modest at $273 million from operations against $192 million of capital expenditures and $242 million returned via dividends and buybacks. Investors will focus on execution of the planned $1.1 billion 2026 capex program, ongoing SAP S4 costs of roughly $45 million per quarter, and the IRS NOPA, which could translate into about $640 million of cash taxes if ultimately resolved against the company.
Key Figures
Total revenue: $5.402B
Operating income: $679M
Net income attributable to company: $461M
+5 more
8 metrics
Total revenue
$5.402B
Three months ended March 31, 2026
Operating income
$679M
Q1 2026 vs $431M in Q1 2025
Net income attributable to company
$461M
Q1 2026 vs $204M in Q1 2025
Earnings per share
$0.55
Basic and diluted EPS, Q1 2026
Cash from operations
$273M
Three months ended March 31, 2026
Capital expenditures
$192M
Three months ended March 31, 2026
Dividends paid
$142M
Quarterly dividend $0.17 per share, Q1 2026
Potential IRS cash taxes
$640M
Estimated if NOPA on 2016 termination fee is resolved adversely
Key Terms
credit default swaps, valuation allowance, Pillar Two, Notice of Proposed Adjustment, +2 more
6 terms
credit default swaps financial
"We have entered into credit default swaps (CDSs) with third-party financial institutions that had an aggregate notional amount outstanding..."
A credit default swap is a contract where one party pays a regular fee to another in exchange for a payout if a borrower (like a company or government) fails to repay its debt—think of it as an insurance policy on a loan. Investors use these contracts to protect against losses, to express views on a borrower’s financial health, or to speculate, and heavy buying or selling of this protection can change bond prices and signal rising or falling credit risk.
valuation allowance financial
"The effective tax rate for this period was primarily impacted by the release of a valuation allowance in the amount of $32 million..."
A valuation allowance is a reserve set aside to reduce the value of certain assets on a company's financial records when there is uncertainty about whether they will generate the expected benefits. It acts like a caution sign, indicating that some assets might not be fully recoverable or worth their recorded amount. This matters to investors because it provides a more realistic picture of a company's financial health and potential risks.
Pillar Two regulatory
"The Organization for Economic Co-operation and Development enacted model rules for a new global minimum tax framework, also known as Pillar Two..."
Pillar Two is an international tax framework that sets a global minimum tax rate for large multinational companies and requires extra payments when profits booked in low-tax locations fall below that floor. For investors, it matters because it raises the likely tax bill, reduces after-tax earnings and cash available for dividends or reinvestment, and can change company valuations—think of it as a tax “price floor” that limits how much a firm can lower its effective tax rate.
Notice of Proposed Adjustment regulatory
"we received a Notice of Proposed Adjustment (NOPA) from the IRS on September 28, 2023."
Rule 10b5-1 trading arrangement financial
"officers of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement”..."
SAP S4 migration technical
"During 2023, we began our migration to SAP S4 which we expect to complete in the fourth quarter of 2026."
Earnings Snapshot
Revenue: $5.402B
Q1 2026
Revenue
$5.402B
flat vs Q1 2025
Operating income
$679M
+58% vs Q1 2025
Net income attributable to company
$461M
up from $204M in Q1 2025
EPS (basic and diluted)
$0.55
up from $0.24 in Q1 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2026
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______to_______
Commission File Number 001-03492
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) | ||
(281 ) 871-2699
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered |
NYSE Texas |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated Filer | ☐ | ||
Non-accelerated Filer | ☐ | Smaller Reporting Company | ||
Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of April 17, 2026, there were 835,397,735 shares of Halliburton Company common stock, $2.50 par value per share, outstanding.
i
HALLIBURTON COMPANY
Index
Page No. | ||
PART I. | FINANCIAL INFORMATION | 1 |
Item 1. | Financial Statements | 1 |
Condensed Consolidated Statements of Operations | 1 | |
Condensed Consolidated Statements of Comprehensive Income | 2 | |
Condensed Consolidated Balance Sheets | 3 | |
Condensed Consolidated Statements of Cash Flows | 4 | |
Notes to Condensed Consolidated Financial Statements | 5 | |
Note 1. Basis of Presentation | 5 | |
Note 2. Impairments and Other Charges | 5 | |
Note 3. Business Segment Information | 6 | |
Note 4. Revenue | 8 | |
Note 5. Inventories | 9 | |
Note 6. Accounts Payable | 9 | |
Note 7. Income Taxes | 10 | |
Note 8. Shareholders' Equity | 11 | |
Note 9. Commitments and Contingencies | 12 | |
Note 10. Income per Share | 12 | |
Note 11. Fair Value of Financial Instruments | 12 | |
Note 12. New Accounting Pronouncements | 13 | |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 14 |
Executive Overview | 14 | |
Liquidity and Capital Resources | 17 | |
Business Environment and Results of Operations | 19 | |
Results of Operations in 2026 Compared to 2025 | 21 | |
Forward-Looking Information | 24 | |
New Accounting Standards Not Yet Adopted | 24 | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 24 |
Item 4. | Controls and Procedures | 24 |
PART II. | OTHER INFORMATION | 25 |
Item 1. | Legal Proceedings | 25 |
Item 1(a). | Risk Factors | 25 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 25 |
Item 3. | Defaults Upon Senior Securities | 25 |
Item 4. | Mine Safety Disclosures | 25 |
Item 5. | Other Information | 25 |
Item 6. | Exhibits | 26 |
SIGNATURES | 27 |
HAL Q1 2026 FORM 10-Q | 1
Table of Contents |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
HALLIBURTON COMPANY
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended | ||
March 31, | ||
Millions of dollars and shares except per share data | 2026 | 2025 |
Revenue: | ||
Services | $ | $ |
Product sales | ||
Total revenue | ||
Operating costs and expenses: | ||
Cost of services | ||
Cost of sales | ||
Impairments and other charges | ||
General and administrative | ||
SAP S4 upgrade expense | ||
Total operating costs and expenses | ||
Operating income | ||
Interest expense, net of interest income of $22 and $25 | ( | ( |
Other, net | ( | ( |
Income before income taxes | ||
Income tax provision | ( | ( |
Net income | $ | $ |
Net (income) loss attributable to noncontrolling interest | ( | |
Net income attributable to company | $ | $ |
Basic and diluted net income per share | $ | $ |
Basic weighted average common shares outstanding | ||
Diluted weighted average common shares outstanding | ||
See Notes to Condensed Consolidated Financial Statements.
HAL Q1 2026 FORM 10-Q | 2
Table of Contents |
HALLIBURTON COMPANY
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended | ||
March 31, | ||
Millions of dollars | 2026 | 2025 |
Net income | $ | $ |
Other comprehensive income (loss), net of income taxes | ( | |
Comprehensive income | $ | $ |
Comprehensive (income) loss attributable to noncontrolling interest | ( | |
Comprehensive income attributable to company shareholders | $ | $ |
See Notes to Condensed Consolidated Financial Statements.
HAL Q1 2026 FORM 10-Q | 3
Table of Contents |
HALLIBURTON COMPANY
Condensed Consolidated Balance Sheets
(Unaudited)
Millions of dollars and shares except per share data | March 31, 2026 | December 31, 2025 |
Assets | ||
Current assets: | ||
Cash and equivalents | $ | $ |
Receivables (net of allowances for credit losses of $782 and $805) | ||
Inventories | ||
Other current assets | ||
Total current assets | ||
Property, plant, and equipment (net of accumulated depreciation of $12,753 and $12,616) | ||
Goodwill | ||
Deferred income taxes | ||
Operating lease right-of-use assets | ||
Other assets | ||
Total assets | $ | $ |
Liabilities and Shareholders' Equity | ||
Current liabilities: | ||
Accounts payable | $ | $ |
Accrued employee compensation and benefits | ||
Income taxes payable | ||
Taxes other than income | ||
Current portion of operating lease liabilities | ||
Current maturities of long-term debt | ||
Other current liabilities | ||
Total current liabilities | ||
Long-term debt | ||
Operating lease liabilities | ||
Employee compensation and benefits | ||
Other liabilities | ||
Total liabilities | ||
Shareholders' equity: | ||
Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,063 and 1,064 shares) | ||
Paid-in capital in excess of par value | ||
Accumulated other comprehensive loss | ( | ( |
Retained earnings | ||
Treasury stock, at cost (228 and 229 shares) | ( | ( |
Company shareholders' equity | ||
Noncontrolling interest in consolidated subsidiaries | ||
Total shareholders' equity | ||
Total liabilities and shareholders' equity | $ | $ |
See Notes to Condensed Consolidated Financial Statements.
HAL Q1 2026 FORM 10-Q | 4
Table of Contents |
HALLIBURTON COMPANY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31, | ||
Millions of dollars | 2026 | 2025 |
Cash flows from operating activities: | ||
Net income | $ | $ |
Adjustments to reconcile net income to cash flows from operating activities: | ||
Depreciation, depletion, and amortization | ||
Impairments and other charges | ||
Changes in assets and liabilities: | ||
Receivables | ( | ( |
Inventories | ( | ( |
Accounts payable | ( | |
Other operating activities | ( | ( |
Total cash flows provided by operating activities | ||
Cash flows from investing activities: | ||
Capital expenditures | ( | ( |
Payments to acquire businesses, net of cash acquired | ( | ( |
Purchase of investment securities | ( | ( |
Proceeds from sales of property, plant, and equipment | ||
Sales of investment securities | ||
Purchase of an equity investment | ( | |
Other investing activities | ( | ( |
Total cash flows used in investing activities | ( | ( |
Cash flows from financing activities: | ||
Dividends to shareholders | ( | ( |
Stock repurchase program | ( | ( |
Other financing activities | ( | |
Total cash flows used in financing activities | ( | ( |
Effect of exchange rate changes on cash | ( | |
Decrease in cash and cash equivalents | ( | ( |
Cash and equivalents at beginning of period | ||
Cash and equivalents at end of period | $ | $ |
Supplemental disclosure of cash flow information: | ||
Cash payments during the period for: | ||
Interest | $ | $ |
Income taxes | $ | $ |
See Notes to Condensed Consolidated Financial Statements.
HAL Q1 2026 FORM 10-Q | 5
Table of Contents | Part I. Item 1 | Notes to Condensed Consolidated Financial Statements |
HALLIBURTON COMPANY
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements were prepared using United States
generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and
Regulation S-X. Accordingly, these financial statements do not include all information or notes required by U.S. GAAP for
annual financial statements and should be read together with our 2025 Annual Report on Form 10-K.
Our accounting policies are in accordance with U.S. GAAP. The preparation of financial statements in conformity with
these accounting principles requires us to make estimates and assumptions that affect:
•the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements; and
•the reported amounts of revenue and expenses during the reporting period.
Ultimate results could differ from our estimates.
In our opinion, the condensed consolidated financial statements included herein contain all adjustments necessary to
present fairly our financial position as of March 31, 2026, the results of our operations for the three months ended March 31,
2026 and 2025, and our cash flows for the three months ended March 31, 2026 and 2025. Such adjustments are of a normal
recurring nature. In addition, certain reclassifications of prior period balances have been made to conform to the current period
presentation.
The results of our operations for the three months ended March 31, 2026 may not be indicative of results for the full
year.
Note 2. Impairments and Other Charges
During the three months ended March 31, 2025, we recorded a pre-tax charge of $356 million primarily related to
$107 million in severance expense as we rationalized global headcount to align with activity levels and $104 million of
additional impairment associated with a strategic decision to market for sale a portion of our chemical business. Additionally,
we recognized a $53 million impairment related to facility closures and lease terminations. Other charges of $92 million were
primarily related to legacy environmental remediation cost estimate increases.
HAL Q1 2026 FORM 10-Q | 6
Table of Contents | Part I. Item 1 | Notes to Condensed Consolidated Financial Statements |
Note 3. Business Segment Information
We operate under two two
Production segment and the Drilling and Evaluation segment. Our equity in earnings and losses of unconsolidated affiliates that
are accounted for using the equity method of accounting are included within cost of services and cost of sales on our statements
of operations, which is part of operating income of the applicable segment.
Our company’s chief operating decision maker (CODM) is Jeffrey Miller, Chairman of the Board, President and Chief
Executive Officer. Throughout the year, our CODM assesses the performance of the two segments based on segment revenue
and operating income, in comparison with forecast and plan and overall results, to make capital and resource allocation
decisions.
Three Months Ended | ||
March 31, | ||
Millions of dollars | 2026 | 2025 |
Revenue: | ||
Completion and Production | $ | $ |
Drilling and Evaluation | ||
Total revenue | $ | $ |
Operating income: | ||
Completion and Production | $ | $ |
Drilling and Evaluation | ||
Total operations | ||
Corporate and other (a) | ( | ( |
SAP S4 upgrade expense | ( | ( |
Impairments and other charges (b) | ( | |
Total operating income | $ | $ |
Interest expense, net of interest income | $( | $( |
Other, net | ( | ( |
Income before income taxes | $ | $ |
Capital expenditures: | ||
Completion and Production | $ | $ |
Drilling and Evaluation | ||
Total capital expenditures | $ | $ |
Depreciation, depletion, and amortization: | ||
Completion and Production | $ | $ |
Drilling and Evaluation | ||
Corporate and other | ||
Total depreciation, depletion, and amortization | $ | $ |
(a) | Includes certain expenses not attributable to a business segment, such as costs related to support functions, corporate executives, and operating lease assets, and includes amortization expense associated with intangible assets recorded as a result of acquisitions. | ||
(b) | For the three months ended March 31, 2025, the amount includes a $ Production, an $ other. See Notes to Condensed Consolidated Financial Statements, Note 2 for further discussion on impairments and other charges. | ||
HAL Q1 2026 FORM 10-Q | 7
Table of Contents | Part I. Item 1 | Notes to Condensed Consolidated Financial Statements |
and segment operating income and are regularly reviewed by our CODM.
Three Months Ended | ||
March 31, | ||
2026 | ||
Millions of dollars | Completion and Production | Drilling and Evaluation |
Segment operating expenses: | ||
Cost of products, materials, and supplies | $ | $ |
Compensation | ||
Depreciation, depletion, and amortization | ||
Other | ||
Total segment operating expenses | $ | $ |
Three Months Ended | ||
March 31, | ||
2025 | ||
Millions of dollars | Completion and Production | Drilling and Evaluation |
Segment operating expenses: | ||
Cost of products, materials, and supplies | $ | $ |
Compensation | ||
Depreciation, depletion, and amortization | ||
Other | ||
Total segment operating expenses | $ | $ |
miscellaneous costs.
Millions of dollars | March 31, 2026 | December 31, 2025 |
Total assets: | ||
Completion and Production (a) | $ | $ |
Drilling and Evaluation (a) | ||
Corporate and other (b) | ||
Total assets | $ | $ |
(a) | Assets associated with specific segments primarily include receivables, inventories, property, plant, and equipment, operating lease right-of- use assets, equity in and advances to related companies, and goodwill. | ||
(b) | Includes primarily cash and equivalents and deferred tax assets. | ||
HAL Q1 2026 FORM 10-Q | 8
Table of Contents | Part I. Item 1 | Notes to Condensed Consolidated Financial Statements |
Note 4. Revenue
products in an amount that reflects the consideration we expect to receive in exchange for those services and products. Most of
our service and product contracts are short-term in nature. In recognizing revenue for our services and products, we determine
the transaction price of purchase orders or contracts with our customers, which may consist of fixed and variable consideration.
We also assess our customers’ ability and intention to pay, which is based on a variety of factors, including our historical
payment experience with, and the financial condition of, our customers. Payment terms and conditions vary by contract type,
although terms generally include a requirement of payment within 20 to 60 days. Other judgments involved in recognizing
revenue include an assessment of progress towards completion of performance obligations for certain long-term contracts,
which involve estimating total costs to determine our progress towards contract completion and calculating the corresponding
We disaggregate revenue from contracts with customers into types of services or products, consistent with our two
reportable segments, in addition to geographical area. Based on the location of services provided and products sold, 37 % and
respectively. No other country accounted for more than 10% of our revenue for those periods.
Three Months Ended | ||
March 31, | ||
Millions of dollars | 2026 | 2025 |
Revenue by segment: | ||
Completion and Production | $ | $ |
Drilling and Evaluation | ||
Total revenue | $ | $ |
Revenue by geographic region: | ||
North America | $ | $ |
Latin America | ||
Europe/Africa/CIS | ||
Middle East/Asia | ||
Total revenue | $ | $ |
Contract balances
We perform our obligations under contracts with our customers by transferring services and products in exchange for
consideration. The timing of our performance often differs from the timing of our customers’ payment, which results in the
recognition of receivables and deferred revenue. Deferred revenue represents advance consideration received from customers
for contracts where revenue is recognized on future performance of service. Deferred revenue, as well as revenue recognized
during the period relating to amounts included as deferred revenue at the beginning of the period, was not material to our
condensed consolidated financial statements.
Transaction price allocated to remaining performance obligations
Remaining performance obligations represent firm contracts for which work has not been performed and future
revenue recognition is expected. We have elected the practical expedient permitting the exclusion of disclosing remaining
performance obligations for contracts that have an original expected duration of one year or less. We have some long-term
contracts related to software and integrated project management services such as lump sum turnkey contracts. For software
contracts, revenue is generally recognized over the duration of the contract period when the software is considered to be a right
to access our intellectual property. For lump sum turnkey projects, we recognize revenue over time using an input method,
which requires us to exercise judgment. Revenue allocated to remaining performance obligations for these long-term contracts
is not material.
HAL Q1 2026 FORM 10-Q | 9
Table of Contents | Part I. Item 1 | Notes to Condensed Consolidated Financial Statements |
As of March 31, 2026, 32 % of our net trade receivables were from customers in the United States. As of December 31,
2025, 31 % of our net trade receivables were from customers in the United States. Receivables from our primary customer in
Mexico accounted for approximately 7
have experienced payment delays from our primary customer in Mexico, the amounts are not in dispute and we have not
historically had, and we do not expect, any material write-offs due to collectability of receivables from this customer.
Furthermore, we have entered into credit default swaps (CDSs) with third-party financial institutions that have an aggregate
notional amount outstanding as of March 31, 2026 of $374 million, compared to an aggregate notional amount outstanding as
of December 31, 2025 of $592 million, related to borrowings provided by the financial institutions to one of our primary
customers in Mexico, of which portions of the proceeds were utilized by this customer to pay certain of our outstanding
receivables. See Notes to Condensed Consolidated Financial Statements, Note 11 for further information on these CDSs. No
countries other than the United States, and no 10
those dates.
We have risk of delayed customer payments and payment defaults associated with customer liquidity issues. We
routinely monitor the financial stability of our customers and employ an extensive process to evaluate the collectability of
outstanding receivables. This process, which involves judgment and estimates, includes analysis of our customers’ historical
time to pay, financial condition and various financial metrics, debt structure, credit ratings, and production profile, as well as
political and economic factors in countries of operations and other customer-specific factors.
Note 5. Inventories
March 31, | December 31, | |
Millions of dollars | 2026 | 2025 |
Finished products and parts | $ | $ |
Raw materials and supplies | ||
Work in process | ||
Total inventories | $ | $ |
Note 6. Accounts Payable
We have an agreement with a third party that allows our participating suppliers to finance payment obligations from us
with a designated third-party financial institution who acts as our paying agent. We have generally extended our payment terms
with suppliers to 90
our payment obligations to such supplier prior to the scheduled due date thereof at a discounted price. We are not required to
provide collateral to the financial institution.
Our obligations to participating suppliers, including amounts due and scheduled payment dates, are not impacted by
the suppliers’ decisions to finance amounts due under these financing arrangements. Our outstanding payment obligations under
this agreement was $267 million as of March 31, 2026, and $280 million as of December 31, 2025, and are included in
“Accounts payable” on the Condensed Consolidated Balance Sheets.
HAL Q1 2026 FORM 10-Q | 10
Table of Contents | Part I. Item 1 | Notes to Condensed Consolidated Financial Statements |
Note 7. Income Taxes
income of $569 million, resulting in an effective tax rate of 18.5 % for the quarter. The effective tax rate for this period was
primarily impacted by the release of a valuation allowance in the amount of $32 million related to changes in deferred tax asset
realizability. During the three months ended March 31, 2025, we recorded a total income tax provision of $103 million on a
pre-tax income of $306 million, resulting in an effective tax rate of 33.7 % for the quarter. The effective tax rate for this period
was primarily impacted by the additional valuation allowance recognized on our deferred tax assets, which resulted from the
pre-tax $356 million of impairments and other charges.
Our tax returns are subject to review by the taxing authorities in the jurisdictions where we file tax returns. In most
cases we are no longer subject to examination by tax authorities for years before 2014. The only significant operating
jurisdiction that has tax filings under review or subject to examination by the tax authorities is the United States. As of
March 31, 2026, the United States federal income tax filings for tax years 2016 through 2024 are currently under review or
remain open for review by the Internal Revenue Service (the IRS).
As of March 31, 2026, the primary unresolved issue for the IRS audit for 2016 relates to the classification of the
$3.5 billion ordinary deduction that we claimed for the termination fee we paid to Baker Hughes in the second quarter of 2016
for which we received a Notice of Proposed Adjustment (NOPA) from the IRS on September 28, 2023. We regularly assess the
likelihood of adverse outcomes resulting from tax examinations to determine the adequacy of our tax reserves, and we believe
our income tax reserves are appropriately provided for all open tax years. We do not expect a final resolution of this issue in the
next twelve months.
Based on the information currently available, we do not anticipate a significant increase or decrease to our tax
contingencies within the next twelve months.
HAL Q1 2026 FORM 10-Q | 11
Table of Contents | Part I. Item 1 | Notes to Condensed Consolidated Financial Statements |
Note 8. Shareholders' Equity
March 31, 2025, respectively:
Millions of dollars | Common Stock | Paid-in Capital in Excess of Par Value | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest in Consolidated Subsidiaries | Total |
Balance at December 31, 2025 | $ | $ | $( | $ | $( | $ | $ |
Comprehensive income (loss): | |||||||
Net income | |||||||
Other comprehensive income (loss) | |||||||
Cash dividends ($0.17 per share) | ( | ( | |||||
Stock repurchase program | ( | ( | |||||
Stock plans (a) | ( | ||||||
Other | ( | ( | |||||
Balance at March 31, 2026 | $ | $ | $( | $ | $( | $ | $ |
(a) | In the first quarter of 2026, we issued common stock from treasury shares for stock options exercised, restricted stock grants, performance shares under our performance unit program, and purchases under our employee stock purchase plan. |
Millions of dollars | Common Stock | Paid-in Capital in Excess of Par Value | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest in Consolidated Subsidiaries | Total |
Balance at December 31, 2024 | $ | $ | $( | $ | $( | $ | $ |
Comprehensive income (loss): | |||||||
Net income | ( | ||||||
Other comprehensive income (loss) | ( | ( | |||||
Cash dividends ($0.17 per share) | ( | ( | |||||
Stock repurchase program | ( | ( | |||||
Stock plans (a) | ( | ( | |||||
Other | |||||||
Balance at March 31, 2025 | $ | $ | $( | $ | $( | $ | $ |
(a) | In the first quarter of 2025, we issued common stock from treasury shares for stock options exercised, restricted stock grants, performance shares under our performance unit program, and purchases under our employee stock purchase plan. |
Our Board of Directors has authorized a program to repurchase our common stock from time to time. We repurchased
Approximately $1.9 billion remained authorized for repurchases under the program as of March 31, 2026. From the inception
of this program in February of 2006 through March 31, 2026, we repurchased 329 million shares of our common stock for a
total cost of approximately $12.2 billion. We repurchased 9.6 million shares of our common stock under the program during the
three months ended March 31, 2025 for approximately $252 million.
March 31, | December 31, | |
Millions of dollars | 2026 | 2025 |
Cumulative translation adjustments | $( | $( |
Defined benefit and other postretirement liability adjustments | ( | ( |
Other | ( | ( |
Total accumulated other comprehensive loss | $( | $( |
HAL Q1 2026 FORM 10-Q | 12
Table of Contents | Part I. Item 1 | Notes to Condensed Consolidated Financial Statements |
Note 9. Commitments and Contingencies
injury, property damage, environmental, intellectual property, commercial, tax, and other matters arising in the ordinary course
of business, the resolution of which, in the opinion of management, will not have a material adverse effect on our consolidated
results of operations or consolidated financial position. There is inherent risk in any legal or governmental proceeding, claim or
investigation, and no assurance can be given as to the outcome of these proceedings.
Guarantee arrangements
In the normal course of business, we have in place agreements with financial institutions under which approximately
$3.2 billion of letters of credit, bank guarantees, or surety bonds were outstanding as of March 31, 2026. Some of the
outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization. None of these off-
Note 10. Income per Share
Basic income or loss per share is based on the weighted average number of common shares outstanding during the
period. Diluted income per share includes additional common shares that would have been outstanding if potential common
shares with a dilutive effect had been issued. Antidilutive securities represent potentially dilutive securities which are excluded
from the computation of diluted income or loss per share as their impact was antidilutive.
Three Months Ended March 31, | ||
Millions of shares | 2026 | 2025 |
Basic weighted average common shares outstanding | ||
Dilutive effect of awards granted under our stock incentive plans | ||
Diluted weighted average common shares outstanding | ||
Antidilutive shares: | ||
Weighted average options with exercise price greater than the average market price | ||
Total antidilutive shares | ||
Note 11. Fair Value of Financial Instruments
The carrying amount of cash and equivalents, receivables, and accounts payable, as reflected in the Condensed
Consolidated Balance Sheets, approximates fair value due to the short maturities of these instruments.
March 31, 2026 | December 31, 2025 | ||||||||
Millions of dollars | Level 1 | Level 2 | Total fair value | Carrying value | Level 1 | Level 2 | Total fair value | Carrying value | |
Total debt | $ | $ | $ | $ | $ | $ | $ | $ | |
identical liabilities with transactions occurring on the last two days of period-end. Our debt categorized within level 2 on the
fair value hierarchy is calculated using significant observable inputs for similar liabilities where estimated values are
determined from observable data points on our other bonds and on other similarly rated corporate debt or from observable data
points of transactions occurring prior to two days from period-end and adjusting for changes in market conditions. Differences
between the periods presented in our level 1 and level 2 classification of our long-term debt relate to the timing of when third-
party market transactions on our debt are executed. We have no
HAL Q1 2026 FORM 10-Q | 13
Table of Contents | Part I. Item 1 | Notes to Condensed Consolidated Financial Statements |
of March 31, 2026 of $374 million, compared to an aggregate notional amount outstanding as of December 31, 2025 of $592
million, related to borrowings provided by the financial institutions to one of our primary customers in Mexico, of which a
portion of the proceeds were then utilized by this customer to pay certain of our outstanding receivables. Approximately $331
million of the outstanding amount of the CDSs reduces monthly over its remaining 6 -month term and $43 million reduces
monthly over its remaining 3 -month term.
The fair value of the derivative liabilities was not material to our financial condition as of March 31, 2026.
Note 12. New Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2024-03
(Subtopic 220-40), “Disaggregation of Income Statement Expenses”, which requires additional disclosure of certain expense
captions presented on the face of the Company’s income statement as well as disclosures about selling expenses. ASU 2024-03
is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods
beginning after December 15, 2027, and should be applied on a prospective or retrospective basis, with early adoption
permitted. We continue to evaluate the effect that adoption of ASU 2024-03 will have on our disclosures.
HAL Q1 2026 FORM 10-Q | 14
Table of Contents | Part I. Item 2 | Executive Overview |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in
conjunction with the condensed consolidated financial statements included in Item 1. Financial Statements contained herein.
EXECUTIVE OVERVIEW
Organization
We are one of the world’s largest providers of products and services to the energy industry. We help our customers
maximize asset value throughout the lifecycle of the reservoir from locating hydrocarbons and managing geological data, to
drilling and formation evaluation, well construction and completion, and optimizing production throughout the life of the asset.
Activity levels within our operations are significantly impacted by spending on upstream exploration, development, and
production programs by major, national, and independent oil and natural gas companies. We report our results under two
segments, the Completion and Production segment and the Drilling and Evaluation segment.
•Completion and Production delivers cementing, stimulation, specialty chemicals, intervention, pressure control,
artificial lift, and completion products and services. The segment consists of Artificial Lift, Cementing, Completion
Tools, Multi-Chem, Pipeline and Process Services, Production Enhancement, and Production Solutions. During the
third quarter of 2024, we made a strategic decision to market for sale a portion of our chemical business. We expect
the sale to be completed in the second quarter of 2026.
•Drilling and Evaluation provides field and reservoir modeling, drilling, fluids, evaluation, and precise wellbore
placement solutions that enable customers to model, measure, drill, and optimize their well construction activities.
The segment consists of Baroid, Drill Bits and Services, Halliburton Project Management, Landmark Software and
Services, Sperry Drilling, Testing and Subsea, and Wireline and Perforating.
The business operations of our segments are organized around four primary geographic regions: North America, Latin
America, Europe/Africa/CIS, and Middle East/Asia. We have manufacturing operations in various locations, the most
significant of which are in the United States, Malaysia, Singapore, and the United Kingdom. With over 46,000 employees, we
operate in more than 70 countries around the world, and our corporate headquarters is in Houston, Texas.
Our value proposition is to collaborate and engineer solutions to maximize asset value for our customers. We strive to
achieve strong cash flows and returns for our shareholders by delivering technology and services that improve efficiency,
increase recovery, and maximize production for our customers. Our strategic priorities are to:
- International: Consistently increase international growth in our directional drilling, unconventionals, well
intervention, and artificial lift businesses. Develop our strategic collaboration with VoltaGrid around behind-the-
meter power generation.
- North America: Maximize value by, among other things, utilizing our Zeus IQ electric fracturing platform, our
iCruise rotary steerable systems and LOGIX automation.
- Digital: Continue to drive differentiation and efficiencies through the deployment of digital and automation
technologies, both internally and for our customers.
- Capital efficiency: Maintain our capital expenditures at about $1.1 billion, while leveraging technology and targeted
process improvements to enhance utilization of existing capital.
- Shareholder returns: Return over 50% of annual free cash flow to shareholders through dividends and share
repurchases.
- Advance a Sustainable Energy Future: Continue to develop technologies and solutions to help lower our customers’
and our emissions intensity, grow our low carbon energy business, and support Halliburton Labs early-stage
company participants.
HAL Q1 2026 FORM 10-Q | 15
Table of Contents | Part I. Item 2 | Executive Overview |
The following charts depict the revenue split between our two operating segments and our four primary geographic
regions for the three months ended March 31, 2026.
Market conditions
During the first quarter of 2026, the ongoing geopolitical conflict has impacted activity in the Middle East resulting in
an impact of $0.02 to $0.03 of diluted net income per share across both of our segments. Oilfield activity reflected continued
customer focus on capital discipline and returns, with spending concentrated on projects and programs that improve near-term
production and operating efficiency. Customer activity levels and spending plans remained sensitive to oil and natural gas price
volatility and changes in global supply-and-demand fundamentals and were impacted by geopolitical developments, including
regional conflicts, sanctions, and trade or regulatory actions.
Trade tensions and tariffs continue to influence the global demand outlook, with varying impacts across end markets.
Following a U.S. Supreme Court ruling that invalidated tariffs imposed in 2025 by the Trump Administration on goods from all
countries, President Trump implemented a 150-day “global tariff” of 10% effective February 24, 2026, using presidential
powers under Section 122 of the Trade Act of 1974, and indicated a desire to increase such “global tariff” to 15%. Although the
Section 122 tariffs are due to expire in July, the Trump Administration has initiated processes that could result in new tariffs
being imposed under other statutes. We continue to monitor and evaluate the effects on goods imported into the United States.
Oil prices increased in the first quarter of 2026 compared to the fourth quarter of 2025. The West Texas Intermediate
(WTI) crude oil price averaged approximately $72 per barrel during the first quarter of 2026, compared to approximately $60
per barrel during the fourth quarter of 2025, or a 20% increase. The Brent crude oil price averaged approximately $80 per barrel
during the first quarter of 2026, compared to approximately $64 per barrel during the fourth quarter, or a 25% increase.
Globally, we continue to be impacted by inflationary cost increases, primarily related to logistics, chemicals, and
cement, we manage these pressures through global procurement strategies, technology modifications, and sourcing efficiencies.
As a standard practice, we generally seek to pass a portion of these cost increases on to our customers and believe we have
effective solutions in place to minimize their operational impact.
HAL Q1 2026 FORM 10-Q | 16
Table of Contents | Part I. Item 2 | Executive Overview |
Financial results
The following graph illustrates our revenue and operating margins for each operating segment for the first quarter of
2025 and 2026.
During the first quarter of 2026, we generated total company revenue of $5.4 billion, relatively flat as compared to the
first quarter of 2025. We reported operating income of $679 million, in the first quarter of 2026, as compared to operating
income of $431 million in the first quarter of 2025, including impairments and other charges of $356 million.
Our Completion and Production segment revenue decreased 3% in the first quarter of 2026, as compared to the first
quarter of 2025. These results were primarily driven by lower stimulation activity in North America, and lower completion tool
sales and decreased pressure pumping services in the Middle East. Partially offsetting these decreases were higher completion
tool sales in the Western Hemisphere, and improved pressure pumping services in Africa.
Our Drilling and Evaluation segment revenue increased 4% in the first quarter of 2026 as compared to the first quarter
of 2025. These results were primarily driven by higher project management activity in Latin America and increased drilling-
related services in Europe and the Western Hemisphere. Partially offsetting these increases were lower activity across multiple
product service lines in the Middle East, lower wireline activity in the Eastern Hemisphere, and decreased fluid services in the
Gulf of America.
Both divisional results were negatively impacted by the geopolitical conflict in the Middle East.
Our North America revenue decreased 4% in the first quarter of 2026 as compared to the first quarter of 2025. This
decline was primarily driven by lower stimulation activity and decreased artificial lift activity in US Land, and lower
stimulation activity and decreased fluid services in the Gulf of America. Partially offsetting these decreases were increased
drilling-related services in US Land and higher completion tool sales in the region.
Internationally, revenue increased 3% in the first quarter of 2026 as compared to the first quarter of 2025, largely
driven by improved activity across multiple product service lines in Ecuador, the Caribbean, and Brazil, higher stimulation
activity in Mexico and Argentina, increased drilling-related services and higher completion tool sales in Norway, and improved
pressure pumping services in Angola. Offsetting these increases were lower activity across multiple product service lines in the
Middle East and decreased drilling-related services in Namibia.
Our operating performance and liquidity are described in more detail in “Liquidity and Capital Resources” and
“Business Environment and Results of Operations.”
HAL Q1 2026 FORM 10-Q | 17
Table of Contents | Part I. Item 2 | Liquidity and Capital Resources |
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2026, we had $2.0 billion of cash and equivalents, compared to $2.2 billion of cash and equivalents at
December 31, 2025.
Significant sources and uses of cash during the first three months of 2026
Sources of cash:
•Cash flows from operating activities were $273 million. Working capital, which consists of receivables,
inventories, and accounts payable, collectively had a negative impact of $252 million.
Uses of cash:
•Capital expenditures were $192 million.
•We repurchased 2.8 million shares of our common stock for $100 million.
•We paid $142 million of dividends to our shareholders.
Future sources and uses of cash
We manufacture most of our own equipment, which provides us with some flexibility to increase or decrease our
capital expenditures based on market conditions. We currently expect capital spending for 2026 to be approximately $1.1
billion. We believe this level of spending will enable continued investment in our core strategic technologies and businesses,
including the international expansion of our artificial lift, well intervention, unconventionals, and drilling technologies. We will
continue to maintain capital discipline and monitor the rapidly changing market dynamics, and we may adjust our capital
spending accordingly.
While we maintain focus on liquidity and debt reduction, we are also focused on providing cash returns to our
shareholders. Our quarterly dividend rate is $0.17 per common share, or approximately $142 million. In 2023, our Board
approved a capital return framework with a goal of returning at least 50% of our annual free cash flow to shareholders through
dividends and share repurchases and we expect our returns to shareholders will be in line with our capital return framework for
2026.
We may utilize share repurchases as part of our capital return framework. Our Board of Directors has authorized a
program to repurchase our common stock from time to time. We repurchased 2.8 million shares of common stock during the
first quarter of 2026 under this program. Approximately $1.9 billion remained authorized for repurchases as of March 31, 2026
and may be used for open market and other share purchases.
During 2023, we began our migration to SAP S4 which we expect to complete in the fourth quarter of 2026. During
the three months ended March 31, 2026, we incurred $42 million in expense on our SAP S4 migration and expect the estimated
cost to be approximately $45 million per quarter going forward. We believe the new system will provide important efficiency
benefits, cost savings, enhanced visibility to our operations, and advanced analytics that will benefit us and our customers.
We may, from time to time, redeem, repurchase, or otherwise acquire our outstanding debt through privately
negotiated transactions, open market purchases, redemptions, tender offers or otherwise, but we are under no obligation to do
so.
Other factors affecting liquidity
Financial condition in current market. As of March 31, 2026, we had $2.0 billion of cash and equivalents and $3.5
billion of available committed bank credit under our revolving credit facility, with an expiration date of August 16, 2030. We
believe we have a manageable debt maturity profile, with approximately $90 million due February 2027. Furthermore, we have
no financial covenants or material adverse change provisions in our bank agreements, and our debt maturities extend over a
long period of time. We believe our cash on hand, cash flows generated from operations, and our available credit facility will
provide sufficient liquidity to address expected global cash needs, including capital expenditures, working capital investments,
shareholder returns, if any, debt repurchases, if any, and scheduled interest and principal payments, in the short term and long
term.
Guarantee agreements. In the normal course of business, we have agreements with financial institutions under which
approximately $3.2 billion of letters of credit, bank guarantees, or surety bonds were outstanding as of March 31, 2026. Some
of the outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization; however,
none of these triggering events have occurred. As of March 31, 2026, we had no material off-balance sheet liabilities and were
not required to make any material cash distributions to our unconsolidated subsidiaries.
HAL Q1 2026 FORM 10-Q | 18
Table of Contents | Part I. Item 2 | Liquidity and Capital Resources |
We have entered into credit default swaps (CDSs) with third-party financial institutions that have an aggregate
notional amount outstanding as of March 31, 2026 of $374 million, compared to an aggregate notional amount outstanding as
of December 31, 2025 of $592 million, related to borrowings provided by the financial institutions to one of our primary
customers in Mexico, of which portions of the proceeds were utilized by this customer to pay certain of our outstanding
receivables. Approximately $331 million of the outstanding amount of the CDSs reduces monthly over its remaining 6-month
term and $43 million reduces monthly over its remaining 3-month term.
Credit ratings. Our credit ratings with Standard & Poor’s remain BBB+ for our long-term debt and A-2 for our short-
term debt, with a stable outlook. Our credit ratings with Moody's Investors Service remain A3 for our long-term debt and P-2
for our short-term debt, with a stable outlook.
Customer receivables. In line with industry practice, we bill our customers for our services in arrears and are,
therefore, subject to our customers delaying or failing to pay our invoices. In weak economic environments, we may experience
increased delays and failures to pay our invoices due to, among other reasons, a reduction in our customers’ cash flow from
operations and their access to the credit markets, as well as unsettled political conditions.
Receivables from our primary customer in Mexico accounted for approximately 7% of our total receivables as of both
March 31, 2026 and December 31, 2025. While we have experienced payment delays from our primary customer in Mexico,
the amounts are not in dispute and we have not historically had, and we do not expect, any material write-offs due to
collectability of receivables from this customer.
HAL Q1 2026 FORM 10-Q | 19
Table of Contents | Part I. Item 2 | Business Environment and Results of Operations |
BUSINESS ENVIRONMENT AND RESULTS OF OPERATIONS
We operate in more than 70 countries throughout the world to provide a comprehensive range of services and products
to the energy industry. Our revenue is generated from the sale of services and products to major, national, and independent oil
and natural gas companies worldwide. The industry we serve is highly competitive with many substantial competitors in each
segment of our business. Based on the location of the services provided and products sold, 37% and 39% of our consolidated
revenue was from the United States for the three months ended March 31, 2026 and 2025, respectively. No other country
accounted for more than 10% of our revenue for those periods.
Activity within our business segments is significantly impacted by spending on upstream exploration, development,
and production programs by our customers. Also impacting our activity is the status of the global economy, which impacts oil
and natural gas consumption.
Some of the more significant determinants of current and future spending levels of our customers are oil and natural
gas prices, our customers’ expectations about future prices, global oil supply and demand, the impact on natural gas supply and
demand in North America of electrification and data centers power requirements, completions intensity, the world economy, the
availability of capital, government regulation, and global stability, which together drive worldwide drilling and completions
activity. Lower oil and natural gas prices usually translate into lower exploration and production budgets and lower rig count,
while the opposite is usually true for higher oil and natural gas prices. Our financial performance is therefore significantly
affected by oil and natural gas prices and worldwide rig activity, which are summarized in the tables below.
The table below shows the average prices for West Texas Intermediate (WTI) crude oil, United Kingdom Brent crude
oil, and Henry Hub natural gas.
Three Months Ended | Year Ended | ||
March 31, | December 31, | ||
2026 | 2025 | 2025 | |
Oil Price - WTI (1) | $71.98 | $71.84 | $65.46 |
Oil Price - Brent (1) | 80.21 | 75.81 | 69.10 |
Natural Gas Price - Henry Hub (2) | 4.79 | 4.15 | 3.53 |
(1) | Oil prices measured in dollars per barrel. | ||||
(2) | Natural gas price measured in dollars per million British thermal units (Btu), or MMBtu. | ||||
The historical average rig counts based on the weekly Baker Hughes rig count data were as follows:
Three Months Ended | Year Ended | ||
March 31, | December 31, | ||
2026 | 2025 | 2025 | |
US Land | 532 | 573 | 546 |
US Offshore | 16 | 15 | 15 |
Canada | 209 | 216 | 175 |
North America | 757 | 804 | 736 |
International (1) | 1,083 | 1,097 | 1,080 |
Worldwide Total | 1,840 | 1,901 | 1,816 |
(1) | For the three months ended March 31, 2025, historical average rig counts shown are based on data provided by Baker Hughes, which included retroactive adjustments to international rig counts previously reported as a result of a methodology change. | ||||
HAL Q1 2026 FORM 10-Q | 20
Table of Contents | Part I. Item 2 | Business Environment and Results of Operations |
Business outlook
We expect oilfield services activity to be supported by continued customer focus on capital discipline, production
optimization, and efficiency‑driven investment across both international and North America markets. While we continue to
experience operational disruptions in the Middle East, including work cancellations, force‑majeure declarations, reduced
offshore activity, and higher logistics costs, the majority of our operations remain active.
Outside the Middle East, our outlook remains positive. International activity is expected to grow in the mid‑to‑high
single digits for the full year 2026, led by strong customer engagement and investment in Latin America and continued
momentum in offshore markets.
In North America, we see early signs of a services‑market recovery as customers accelerate development within
existing budgets and reduce calendar white‑space. Depleted drilled‑but‑uncompleted well inventories are expected to support
additional drilling activity, and demand for differentiated technologies, including electric fracturing and automated
well‑construction solutions, continues to increase.
We expect broader market fundamentals to remain supportive, although customer spending and activity levels may be
influenced by volatility in oil and natural gas prices, changes in global supply‑and‑demand dynamics, inflationary cost
pressures, and geopolitical developments. These factors, including regional conflicts, sanctions, and regulatory or trade
changes, may affect project timing, supply chains, and access to certain markets.
HAL Q1 2026 FORM 10-Q | 21
Table of Contents | Part I. Item 2 | Results of Operations in 2026 Compared to 2025 (QTD) |
RESULTS OF OPERATIONS IN 2026 COMPARED TO 2025
Three Months Ended March 31, 2026 Compared with Three Months Ended March 31, 2025
Three Months Ended | ||||
March 31, | Favorable | Percentage | ||
Millions of dollars | 2026 | 2025 | (Unfavorable) | Change |
Revenue: | ||||
By operating segment: | ||||
Completion and Production | $3,016 | $3,120 | $(104) | (3)% |
Drilling and Evaluation | 2,386 | 2,297 | 89 | 4 |
Total revenue | $5,402 | $5,417 | $(15) | —% |
By geographic region: | ||||
North America | $2,136 | $2,236 | $(100) | (4)% |
Latin America | 1,090 | 896 | 194 | 22 |
Europe/Africa/CIS | 858 | 775 | 83 | 11 |
Middle East/Asia | 1,318 | 1,510 | (192) | (13) |
Total revenue | $5,402 | $5,417 | $(15) | —% |
Operating income: | ||||
By operating segment: | ||||
Completion and Production | $439 | $531 | $(92) | (17)% |
Drilling and Evaluation | 351 | 352 | (1) | — |
Total operations | 790 | 883 | (93) | (11) |
Corporate and other | (69) | (66) | (3) | (5) |
SAP S4 upgrade expense | (42) | (30) | (12) | (40) |
Impairments and other charges | — | (356) | 356 | n/m |
Total operating income | $679 | $431 | $248 | 58% |
n/m = not meaningful | ||||
Operating Segments
Completion and Production
Completion and Production revenue in the first quarter of 2026 was $3.0 billion, a decrease of $104 million, or 3%,
when compared to the first quarter of 2025. Operating income in the first quarter of 2026 was $439 million, a decrease of $92
million, or 17%, when compared to the first quarter of 2025. These results were primarily driven by lower stimulation activity
in North America, and lower completion tool sales and decreased pressure pumping services in the Middle East. Partially
offsetting these decreases were higher completion tool sales in the Western Hemisphere, and improved pressure pumping
services in Africa.
Drilling and Evaluation
Drilling and Evaluation revenue in the first quarter of 2026 was $2.4 billion, an increase of $89 million, or 4%, when
compared to the first quarter of 2025. Operating income in the first quarter of 2026 was $351 million, flat when compared to the
first quarter of 2025. These results were primarily driven by higher project management activity in Latin America and increased
drilling-related services in Europe and the Western Hemisphere. Partially offsetting these increases were lower activity across
multiple product service lines in the Middle East, lower wireline activity in the Eastern Hemisphere, and decreased fluid
services in the Gulf of America.
In the first quarter of 2026, the geopolitical conflict in the Middle East affected both of our operating segments, with
an impact of $0.02 to $0.03 of diluted net income per share.
HAL Q1 2026 FORM 10-Q | 22
Table of Contents | Part I. Item 2 | Results of Operations in 2026 Compared to 2025 (QTD) |
Geographic Regions
North America
North America revenue in the first quarter of 2026 was $2.1 billion, a 4% decrease, as compared to the first quarter of
2025. This decline was primarily driven by lower stimulation activity and decreased artificial lift activity in US Land, and lower
stimulation activity and decreased fluid services in the Gulf of America. Partially offsetting these decreases were increased
drilling-related services in US Land and higher completion tool sales in the region.
Latin America
Latin America revenue in the first quarter of 2026 was $1.1 billion, a 22% increase compared to the first quarter of
2025. This increase was primarily driven by higher activity across multiple product service lines in Ecuador, the Caribbean, and
Brazil, and improved stimulation activity in Mexico and Argentina. Partially offsetting these increases were lower project
management activity and decreased drilling-related services in Mexico.
Europe/Africa/CIS
Europe/Africa/CIS revenue in the first quarter of 2026 was $858 million, an 11% increase compared to the first quarter
of 2025. This increase was primarily driven by increased drilling-related services and higher completion tool sales in Norway,
and improved pressure pumping services in Angola. Partially offsetting these increases were lower completion tool sales in the
Caspian Area and decreased drilling-related services in Namibia.
Middle East/Asia
Middle East/Asia revenue in the first quarter of 2026 was $1.3 billion, a 13% decrease compared to the first quarter of
2025. This decrease was primarily driven by conflict-related disruptions that resulted in lower activity across multiple product
service lines in Saudi Arabia and decreased drilling-related services in Qatar. Partially offsetting these decreases were higher
completion tool sales and improved fluid services in Asia.
Other Operating Items
SAP S4 Upgrade Expense. As previously mentioned, during 2023, we began our migration to SAP S4, which we
expect to complete in the fourth quarter of 2026. During the first quarter of 2026, we recognized $42 million of expense on our
SAP S4 migration. During the first quarter of 2025, we recognized $30 million of expense on our SAP S4 migration.
Impairments and Other Charges. During the three months ended March 31, 2026, there were no amounts recorded in
impairments and other charges. During the three months ended March 31, 2025, we took a pre-tax charge of $356 million
primarily related to severance costs, an impairment of assets held for sale, an impairment of facility closures and lease
terminations, and other items. See Notes to Condensed Consolidated Financial Statements, Note 2 for further discussion of
these charges.
Nonoperating Items
Pension Settlement Charges from Plan Terminations. During the three months ended March 31, 2026, the Company
entered into agreements to transfer certain defined benefit pension obligations to third-party insurers in connection with plan
terminations. As a result, the Company recognized approximately $23 million of non-cash pension settlement charges,
primarily related to the acceleration of actuarial losses previously recorded in accumulated other comprehensive income. This is
included in “Other, net” on the Condensed Consolidated Statements of Operations.
Income Tax Provision. During the three months ended March 31, 2026, we recorded a total income tax provision of
$105 million on a pre-tax income of $569 million, resulting in an effective tax rate of 18.5% for the quarter. The effective tax
rate for this period was primarily impacted by the release of a valuation allowance in the amount of $32 million related to
changes in deferred tax asset realizability. During the three months ended March 31, 2025, we recorded a total income tax
provision of $103 million on a pre-tax income of $306 million, resulting in an effective tax rate of 33.7% for the quarter. The
effective tax rate for this period was primarily impacted by the additional valuation allowance recognized on our deferred tax
assets, which resulted from the pre-tax $356 million of impairments and other charges.
Pillar Two. The Organization for Economic Co-operation and Development enacted model rules for a new global
minimum tax framework, also known as Pillar Two, and certain governments globally have enacted, or are in the process of
enacting, legislation considering these model rules. These rules did not have a material impact on our taxes for the three months
ended March 31, 2026 and 2025.
HAL Q1 2026 FORM 10-Q | 23
Table of Contents | Part I. Item 2 | Results of Operations in 2026 Compared to 2025 (QTD) |
Internal Revenue Service Notice of Proposed Adjustment. We are subject to taxes in the United States and in numerous
jurisdictions where we operate or where our subsidiaries are organized. Our tax returns are routinely subject to examination by
the taxing authorities in the jurisdictions where we file tax returns. In most cases we are no longer subject to examination by tax
authorities for years before 2014. The only significant operating jurisdiction that has tax filings under review or subject to
examination by the tax authorities is the United States. Our United States federal income tax filings for tax years 2016 through
2024, including carry back of 2016 net operating losses to 2014, are currently under review or remain open for review by the
IRS.
On September 28, 2023, we received a NOPA from the IRS covering our 2016 U.S. tax return. The NOPA proposed
an adjustment 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. The termination fee was paid to Baker Hughes under the merger agreement after
antitrust regulators in multiple jurisdictions failed to approve our proposed merger. It is common commercial practice to include
a termination fee in a merger agreement to compensate the target for damages incurred when the acquisition does not go
forward. The IRS’s long-understood position at the time of payment had been to treat such payments as an ordinary and
necessary business expense. We strongly disagree with the proposed adjustment on both a factual and legal basis, and we plan
to vigorously contest it.
We expect that resolving this dispute will take substantial time. In 2023, we initiated the IRS administrative appeals
process, which is ongoing. Failing a resolution through that process, the matter would ultimately be resolved by the United
States federal courts.
We regularly assess the likelihood of adverse outcomes resulting from tax examinations to determine the adequacy of
our tax reserves, and we believe our income tax reserves are appropriately provided for all open tax years. We cannot assure
you that the matter will be determined in our favor or against us, and if the matter is ultimately determined unfavorably to us, it
could have a material adverse impact on our results of operations and cash flows. Based on tax attributes currently available, we
estimate that, should the IRS's position prevail through the appellate process and subsequent litigation, the proposed adjustment
could result in cash taxes due of approximately $640 million (plus interest thereon in the case of amounts due for previous tax
years). Our estimates are calculated under current tax law and on the basis of our assumptions regarding taxable income and
loss and other tax attributes over the relevant period, which law could change and which assumptions could and likely will
differ materially from actual results. In any event, no payment of any additional tax is currently required, nor do we anticipate
that the proposed adjustment would materially and adversely impact our ability to meet our expected uses of cash, including
future capital expenditures, working capital investments, and scheduled debt repayments, or our ability to return cash to
shareholders, even if a final determination of the matter is reached that is adverse to us.
HAL Q1 2026 FORM 10-Q | 24
Table of Contents | Part I. Item 2 | Forward-Looking Information |
FORWARD-LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 provides safe harbor provisions for forward-looking information.
Forward-looking information is based on projections and estimates, not historical information. Some statements in this Form
10-Q, including those in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations –
Business Environment and Results of Operations – Business Outlook, are forward-looking and use words like “may,” “may
not,” “believe,” “do not believe,” “plan,” “estimate,” “intend,” “expect,” “do not expect,” “anticipate,” “do not anticipate,”
“should,” “likely,” and other expressions. We may also provide oral or written forward-looking information in our statements
and other materials we release to the public. Forward-looking information involves risks and uncertainties and reflects our best
judgment based on current information. Our results of operations can be affected by inaccurate assumptions we make or by
known or unknown risks and uncertainties. In addition, other factors may affect the accuracy of our forward-looking
information. As a result, no forward-looking information can be guaranteed. Actual events and the results of our operations may
vary materially.
We do not assume any responsibility to publicly update any of our forward-looking statements regardless of whether
factors change as a result of new information, future events, or for any other reason, except as required by law. You should
review any additional disclosures we make in our press releases and Forms 10-K, 10-Q, and 8-K filed with or furnished to the
Securities and Exchange Commission. We also suggest that you listen to our quarterly earnings release conference calls with
financial analysts.
NEW ACCOUNTING STANDARDS NOT YET ADOPTED
See Notes to Condensed Consolidated Financial Statements, Note 12 for further discussion of accounting standards
adopted during the quarter and to be adopted in future periods.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
For quantitative and qualitative disclosures about market risk, see Part II, Item 7(a), “Quantitative and Qualitative
Disclosures About Market Risk,” in our 2025 Annual Report on Form 10-K. Our exposure to market risk has not changed
materially since December 31, 2025.
Item 4. Controls and Procedures.
In accordance with the Securities Exchange Act of 1934 Rules 13a-15 and 15d-15, we carried out an evaluation, under
the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of
the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were
effective as of March 31, 2026 to provide reasonable assurance that information required to be disclosed in our reports filed or
submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the
Securities and Exchange Commission’s rules and forms. Our disclosure controls and procedures include controls and
procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is
accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.
There has been no change in our internal control over financial reporting that occurred during the quarter ended
March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.
HAL Q1 2026 FORM 10-Q | 25
Table of Contents | Part II. Item 1 | Legal Proceedings |
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
See Notes to Condensed Consolidated Financial Statements, Note 9 for further information regarding legal
proceedings.
Item 1(a). Risk Factors.
The statements in this section describe the known material risks to our business and should be considered carefully. As
of March 31, 2026, there have been no material changes in risk factors previously disclosed in our Annual Report on Form 10-
K for the fiscal year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Following is a summary of our repurchases of our common stock during the three months ended March 31, 2026.
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) | Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased Under the Program (b) |
January 1 - 31 | 289,276 | $29.67 | — | $2,049,168,144 |
February 1 - 28 | 991,682 | $35.20 | 969,000 | $2,015,004,883 |
March 1 - 31 | 2,036,724 | $35.18 | 1,873,433 | $1,949,168,163 |
Total | 3,317,682 | $34.71 | 2,842,433 |
(a) | Of the 3,317,682 shares purchased during the three-month period ended March 31, 2026, 475,249 were acquired from employees in connection with the settlement of income tax and related benefit withholding obligations arising from vesting in restricted stock grants. These shares were not part of a publicly announced program to repurchase common stock. |
(b) | Our Board of Directors has authorized a program to repurchase a specified dollar amount of our common stock from time to time. On July 21, 2014, our Board of Directors announced that it had approved an increase in the total available outstanding authorization for repurchases to $6.0 billion. Approximately $1.9 billion remained authorized for repurchases as of March 31, 2026. From the inception of this program in February of 2006 through March 31, 2026, we repurchased approximately 329 million shares of our common stock for a total cost of approximately $12.2 billion. The program may be terminated or suspended at any time and does not have a specified expiration date. |
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Our barite and bentonite mining operations, in support of our fluid services business, are subject to regulation by the
U.S. Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977. Information concerning
mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this quarterly report.
Item 5. Other Information.
During the quarter ended March 31, 2026, the following officers of the Company adopted or terminated
10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K,
and no trading arrangements were adopted or terminated by directors of the Company.
Reporting Officer | Title | Reporting Action | Plan Adoption Date | Plan End Date | Aggregated Shares Covered | Intended to Satisfy Rule 10b5-1? |
President, Western Hemisphere | Yes | |||||
Executive Vice President and Chief Financial Officer | Yes |
HAL Q1 2026 FORM 10-Q | 26
Table of Contents | Part II. Item 6 | Exhibits |
Item 6. Exhibits.
† | 10.1 | Executive Agreement (effective February 1, 2026) (M. Casey Maxwell) (incorporated by reference to Exhibit 10.1 of Halliburton’s Form 8-K filed on January 14, 2026, File No. 001-03492). |
* | 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
* | 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
** | 32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
** | 32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
* | 95 | Mine Safety Disclosures. |
* | 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
* | 101.SCH | XBRL Taxonomy Extension Schema Document |
* | 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
* | 101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
* | 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
* | 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
* | 104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
* | Filed with this Form 10-Q. | |
** | Furnished with this Form 10-Q. | |
† | Management contracts or compensatory plans or arrangements. | |
HAL Q1 2026 FORM 10-Q | 27
Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
HALLIBURTON COMPANY
/s/ Eric J. Carre | /s/ Stephanie S. Holzhauser |
Eric J. Carre | Stephanie S. Holzhauser |
Executive Vice President and | Senior Vice President and |
Chief Financial Officer | Chief Accounting Officer |
Date: April 24, 2026
FAQ
How did Halliburton (HAL) perform financially in Q1 2026?
Halliburton generated Q1 2026 revenue of $5.4 billion, roughly flat year over year, but significantly increased profitability. Operating income rose to $679 million from $431 million, and net income attributable to the company climbed to $461 million, with EPS of $0.55.
How did Halliburton’s business segments perform in Q1 2026?
Completion and Production revenue was $3.0 billion, down 3%, with operating income of $439 million down 17%. Drilling and Evaluation revenue increased 4% to $2.4 billion, while operating income was essentially flat at $351 million compared with Q1 2025.
What cash flow and capital spending did Halliburton report for Q1 2026?
Halliburton reported Q1 2026 cash flows from operations of $273 million and capital expenditures of $192 million. The company continues to target about $1.1 billion of capital spending for 2026, focused on core technologies and international expansion in key product lines.
How much cash and debt capacity does Halliburton (HAL) have?
As of March 31, 2026, Halliburton held $2.0 billion of cash and equivalents and had $3.5 billion available under its committed revolving credit facility. Total debt had a fair value around $7.0 billion, with the next maturity of about $90 million due in February 2027.
What is the status of Halliburton’s IRS tax dispute mentioned in the Q1 2026 10-Q?
The IRS issued a Notice of Proposed Adjustment for Halliburton’s 2016 U.S. tax return, challenging treatment of a $3.5 billion termination fee. If the IRS position ultimately prevails, Halliburton estimates additional cash taxes of roughly $640 million plus interest, though no payment is currently required.
How are geopolitical events affecting Halliburton’s Q1 2026 results?
Ongoing conflict in the Middle East has caused work cancellations, reduced offshore activity, and higher logistics costs. Halliburton estimates this reduced diluted net income per share by about $0.02-$0.03 in Q1 2026 and contributed to a 13% revenue decline in Middle East/Asia.
What shareholder returns did Halliburton provide in Q1 2026?
In Q1 2026, Halliburton paid $142 million in dividends, reflecting a quarterly rate of $0.17 per share, and repurchased 2.8 million shares for $100 million. About $1.9 billion remained authorized under the share repurchase program at quarter‑end.