Cost Cuts Power Halliburton's Big Run

2026-02-11 06:05:00 ET

Shares of Halliburton (NYSE: HAL) have been on a tear, climbing 55% since the oilfield services company beat third-quarter earnings estimates in October. After trading near multiyear lows throughout the summer, the stock has erased all of last year's losses as the market recognizes that management's cost initiatives are taking hold and global demand is improving.

Fourth-quarter revenue was little changed sequentially and up only 1% year over year, but profitability showed signs of life despite a declining domestic rig count. In Q4, adjusted operating margins reached 15% after falling from 17% in 2024 to 13% in Q2 2025. In addition to the recent headcount adjustments, revenue from higher-margin international contracts rose, lifting operating income.

In Q3, management announced a reduction in overhead and labor expected to save the company roughly $400 million annually. Pair this with a planned pullback in this year's capital expenditures (capex) budget, and the disciplined spending should stabilize profitability and cash flow while Halliburton navigates headwinds on its home turf.

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