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Research Alert: Hal: A Tough Margin Environment In Q1

-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

HAL reported Q1 2026 adjusted EPS of $0.55, beating consensus by $0.05, though adjusted operating income declined 14% Y/Y to $679M. Revenue was flat Y/Y as C&P segment weakness (down 3.3%) offset D&E growth (up 3.9%), while margin compression continued with C&P margins falling 240bps Y/Y to 14.6%. We do not share management's optimism on North America recovery timing, as we question how long early signs of recovery (per management might take to reach mid-cycle stage). Despite those signs, weak stimulation activity hurt performance in North America in Q1. The Middle East geopolitical situation impacted results by $0.02-$0.03 per share, while Latin America provided a bright spot with 22% revenue growth. We think operators will remain cautious in North America despite high crude prices, given potential reversion if geopolitical tensions ease. We note HAL's 36% Y/Y capex reduction in Q1, not suggestive of unbridled optimism, though we note HAL's Q2 outlook should emerge on today's 9 a.m. call.

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Research Alert: Hal: A Tough Margin Environment In Q1 | FINWIRES