Halliburton has set a goal of about 15% for its 2027 operating margin, with lower expenses and international growth supporting the plan under an assumption of a flat North American market.
For 2027, Halliburton also projects revenue growth in the mid-single digits. Its margin goal does not depend on a recovery in North American hydraulic fracturing. Renewed activity there would provide an additional benefit, Halliburton said.
On its earnings call, Halliburton identified cost savings and reduced spending on its SAP S4 rollout as contributors to the target. It also expects improvements in its existing operations to help lift margins.
The regional pressure behind that plan was evident in Halliburton’s third-quarter results. North American revenue was $2.2 billion, down 5% from the second quarter, while international revenue reached $3.5 billion, up 3%.
Halliburton attributed the North American decline mainly to reduced pressure-pumping work on U.S. land. Its Completion and Production division also faced weaker hydraulic-fracturing activity in Argentina.
The company reported a 12.8% adjusted operating margin for the third quarter on revenue of $5.703 billion. That quarterly measure and the 2027 operating-margin goal use different bases, so the figures do not provide a direct comparison of margin growth.
Middle East/Asia revenue increased 8% from the second quarter, while sales in Latin America and Europe/Africa were flat. Halliburton cited higher activity in Saudi Arabia and Kuwait as drivers of the Middle East/Asia gain.
Halliburton anticipates several years of growth in demand for oilfield services. In July, Aramco awarded Halliburton a multiyear contract in Saudi Arabia’s Jafurah Basin to provide stimulation and well-completion services for unconventional gas development.
