Halliburton Reports Higher First-Quarter Profit Amid Geopolitical Disruptions in Middle East

Halliburton profit surges in Q1 2026 as strong international growth offsets weak North America and subdued drilling activity.

Rising oil prices and geopolitical disruptions failed to translate into stronger drilling demand, yet Halliburton still delivered a profit surge in the first quarter through disciplined execution and international strength. The company reported net income of $461 million, or 55 cents per diluted share, for the first quarter of 2026, more than double the $204 million, or 24 cents per diluted share, recorded in the same period a year earlier. Total revenue remained flat at $5.4 billion compared with the first quarter of 2025, while operating income rose to $679 million from $431 million. The results exceeded Wall Street expectations, with adjusted profit per share beating analyst forecasts of 50 cents.
The improvement in profitability occurred despite ongoing challenges in the oilfield services sector, including a slowdown in North American activity and disruptions tied to conflict in the Middle East. Halliburton's chief executive highlighted signs of an emerging recovery in its largest regional market while noting that international operations had largely navigated external pressures. The company's performance reflected a mix of segment-specific trends, with gains in drilling-related work offset by softness in completions activity, all set against a backdrop of volatile energy prices influenced by geopolitical events.
In North America, revenue declined 4 percent to $2.1 billion. Lower stimulation activity and reduced artificial lift in U.S. land operations, along with decreased stimulation and fluid services in the Gulf of America, drove the drop. These declines were only partly offset by increased drilling-related services in U.S. land and higher completion tool sales across the region. The softer North American results aligned with broader industry caution, as producers refrained from ramping up drilling even as oil prices surged during the quarter.
International revenue, by contrast, advanced 3 percent to $3.3 billion, underscoring the company's diversified geographic footprint. Latin America posted the strongest growth, with revenue climbing 22 percent to $1.1 billion on higher activity across multiple product lines in Ecuador, the Caribbean and Brazil, as well as improved stimulation services in Mexico and Argentina. Europe and Africa revenue rose 11 percent to $858 million, supported by increased drilling-related services and completion tool sales in Norway and better pressure pumping activity in Angola. Middle East and Asia revenue, however, fell 13 percent to $1.3 billion, reflecting lower activity across several service lines in Saudi Arabia and reduced drilling services in Qatar, though higher completion tool sales and fluid services in Asia provided some offset.
The geopolitical conflict in the Middle East, including developments related to Iran, affected Halliburton's operations and weighed on earnings by approximately 2 to 3 cents per diluted share. Middle East revenue specifically declined 12.7 percent to $1.32 billion, with the impact most evident in the completions and production segment through lower completion tool sales and pressure pumping services. Drilling and evaluation revenue rose 4 percent to $2.4 billion overall, aided by higher project management in Latin America and drilling services in Europe and the Western Hemisphere, but faced headwinds from reduced activity in the Middle East, lower wireline services in the Eastern Hemisphere and decreased fluid services in the Gulf of America. Completions and production revenue slipped 3 percent to $3.0 billion, with operating income in that segment declining 17 percent to $439 million.
Oil prices rose more than 94 percent sequentially during the first quarter, driven by attacks on energy infrastructure in the Middle East and Iran's effective closure of the Strait of Hormuz, which represented the largest supply disruption in history. Despite the sharp increase in crude values, oil producers maintained a cautious stance and did not meaningfully expand drilling programs, limiting immediate demand for services and equipment. Halliburton and its peers have yet to see substantial benefits from the higher prices, as customers prioritized spending restraint over aggressive activity growth. The company noted that its international performance outpaced the disruptions, allowing it to deliver results that exceeded expectations even as certain operations faced temporary constraints such as suspended travel and demobilized assets in affected areas.
Operating margins stood at 13 percent for the quarter. Cash flow from operations totaled $273 million, generating free cash flow of $123 million. Halliburton repurchased approximately $100 million of its common stock and paid a dividend of 17 cents per share. Capital expenditures included $42 million related to the migration to SAP S4 systems. Adjusted figures for the prior-year quarter, excluding impairments and other charges, showed net income of $517 million, or 60 cents per diluted share, and operating income of $787 million.
Jeff Miller, chairman, president and chief executive officer, expressed satisfaction with the quarter's performance. “In North America, I see clear signs that we are in the early innings of a recovery. In international markets, our performance around the world outpaced disruptions from the Middle East conflict. I expect that our consistent focus on returns and a measured investment approach will drive long-term success for Halliburton and its shareholders.” Miller's comments reflected a measured outlook that balanced near-term regional variations with longer-term strategic priorities.
Analysts viewed the profit beat as a modest positive for the oilfield services sector but cautioned that it did little to change the narrative of an overall soft market. One industry observer described the results as insufficient to alter expectations for subdued activity levels in the near term. Halliburton's shares rose marginally in premarket trading following the announcement, trading around $36.68 and reflecting a nearly 30 percent gain year-to-date at that point.
The earnings release highlighted several forward-looking considerations, including potential changes in oil and natural gas demand and prices, customer capital spending patterns, and risks associated with international operations such as unsettled political conditions, foreign exchange fluctuations, trade controls and sanctions. The company also cited broader uncertainties around general economic conditions, OPEC+ production decisions, weather events and regulatory developments related to exploration, environmental standards and climate initiatives. Halliburton emphasized that its shareholder return framework, encompassing dividends and stock repurchases, remains subject to board discretion based on operational results, financial condition and other factors.
Comparisons with industry peers provided additional context. Larger rival SLB reported a 6-to-9-cent-per-share earnings impact from similar Middle East issues in its own results announced days earlier. These parallel experiences illustrated the sector-wide nature of the disruptions while also showing Halliburton's relative resilience in maintaining profitability growth.

The first-quarter results arrive at a time when the oilfield services industry continues to adjust to shifting energy market dynamics. Halliburton's ability to deliver higher earnings on flat revenue demonstrated effective cost management and operational execution across diverse geographies. The company's emphasis on returns and cost efficiency suggests a strategic approach aimed at sustaining performance even if activity levels remain uneven in the coming periods.

As the year progresses, movements in commodity prices and capital spending decisions by exploration and production companies will remain key drivers of demand for Halliburton’s services. Developments in the Middle East will continue to shape the broader operating environment. The company has indicated no immediate changes to its shareholder return policies but will continue to evaluate them as conditions evolve, while ongoing investments in technology and digital capabilities—including its SAP system migration—are expected to support efficiency gains over time.

The company will also track key indicators such as rig counts, customer budgets and regional activity trends, particularly in North America, where an early recovery remains uneven. Continued strength in Latin America and Europe could provide additional support, though broader geopolitical risks still pose potential challenges to both energy supply and operational continuity.

The first-quarter performance marked a step forward in profitability, driven by targeted international growth and disciplined cost management. While external headwinds persist, the results underscore Halliburton’s resilience and position it to benefit from any broader recovery in global drilling and completion activity.

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