Halliburton's Q3 Net Income Plunges 96.5% Amid Soaring Impairments

Ticker: HAL · Form: 10-Q · Filed: 2025-10-24T00:00:00.000Z

Sentiment: bearish

Topics: Oilfield Services, Earnings Miss, Impairment Charges, North America Land, Restructuring, Energy Sector, Shareholder Value

Related Tickers: HAL, SLB, BKR, NOV

TL;DR

**Halliburton's Q3 was a disaster, with net income collapsing due to massive write-offs and severance, signaling deeper issues than just a soft market.**

AI Summary

Halliburton Co. (HAL) reported a significant decline in net income for the three months ended September 30, 2025, plummeting to $20 million from $580 million in the prior-year period, a 96.5% decrease. This was primarily driven by a substantial increase in impairments and other charges, which surged to $392 million from $116 million. Total revenue also saw a slight dip, decreasing by 1.7% to $5.60 billion from $5.697 billion year-over-year. For the nine months ended September 30, 2025, net income fell to $703 million from $1.902 billion, a 63.0% reduction, while total revenue decreased by 4.7% to $16.527 billion from $17.334 billion. The Completion and Production segment's operating income decreased by 23.1% to $514 million for the quarter, and the Drilling and Evaluation segment's operating income dropped by 14.3% to $348 million. Severance costs increased to $169 million for the quarter, up from $63 million, and fixed and other asset write-offs, primarily in North America Land operations, totaled $115 million.

Why It Matters

This sharp decline in Halliburton's net income, coupled with increased impairments and write-offs, signals significant operational challenges, particularly in North America Land. For investors, this indicates potential headwinds for profitability and could lead to downward revisions in earnings forecasts, impacting HAL's stock performance. Employees may face further job insecurity given the substantial increase in severance costs. Customers might see shifts in service offerings or pricing as Halliburton rationalizes its chemical business and North America operations. Competitors in the oilfield services sector could capitalize on Halliburton's struggles, potentially gaining market share in key regions.

Risk Assessment

Risk Level: high — The risk level is high due to the dramatic 96.5% drop in net income for the quarter, from $580 million to $20 million, and a 63.0% decline year-to-date. This is exacerbated by a 239.7% increase in impairments and other charges to $392 million for the quarter, including $169 million in severance costs and $115 million in fixed asset write-offs, indicating significant operational restructuring and asset devaluation.

Analyst Insight

Investors should consider reducing exposure to HAL given the severe decline in profitability and substantial impairments. Monitor future filings closely for signs of stabilization in operating income and a reduction in restructuring charges, particularly in the North America Land operations.

Financial Highlights

revenue
$5.60B
operating Margin
6.4%
net Income
$20M
eps
$0.02
cash Position
$2,026M
revenue Growth
-1.7%

Revenue Breakdown

SegmentRevenueGrowth
Completion and Production$3,223M-2.0%
Drilling and Evaluation$2,377M-0.9%

Key Numbers

Key Players & Entities

FAQ

Why did Halliburton's net income decrease so significantly in Q3 2025?

Halliburton's net income decreased significantly in Q3 2025 primarily due to a substantial increase in impairments and other charges, which rose to $392 million from $116 million in Q3 2024. This included $169 million in severance costs and $115 million in fixed and other asset write-offs.

What were the key drivers of the impairments and other charges for Halliburton in Q3 2025?

The key drivers for the $392 million in impairments and other charges for Q3 2025 included $169 million in severance costs due to global headcount rationalization, $115 million in fixed and other asset write-offs primarily related to North America Land operations, and $96 million for the impairment of assets held for sale related to a chemical business.

How did Halliburton's revenue perform in Q3 2025 compared to the previous year?

Halliburton's total revenue for Q3 2025 was $5.60 billion, a 1.7% decrease compared to $5.697 billion in Q3 2024. Services revenue decreased to $4.026 billion from $4.093 billion, and product sales decreased to $1.574 billion from $1.604 billion.

Which of Halliburton's business segments was most affected by the Q3 2025 performance?

Both segments were significantly affected, but the Completion and Production segment saw a larger absolute decline in operating income, dropping by $155 million to $514 million in Q3 2025 from $669 million in Q3 2024. This segment also bore a larger portion of the impairments and other charges, totaling $252 million.

What was the impact of the SAP S4 upgrade expense on Halliburton's operating costs?

The SAP S4 upgrade expense increased Halliburton's operating costs, rising to $50 million in Q3 2025 from $28 million in Q3 2024. For the nine months ended September 30, 2025, this expense totaled $112 million, up from $91 million in the prior year.

What was Halliburton's cash position at the end of Q3 2025?

As of September 30, 2025, Halliburton's cash and equivalents stood at $2.026 billion. This represents a decrease from $2.618 billion at the beginning of the period on December 31, 2024.

Did Halliburton engage in any stock repurchases during the nine months ended September 30, 2025?

Yes, Halliburton engaged in a stock repurchase program, spending $757 million during the nine months ended September 30, 2025. This is an increase from the $696 million spent on stock repurchases during the same period in 2024.

What was the total amount of capital expenditures for Halliburton in the nine months ended September 30, 2025?

Halliburton's total capital expenditures for the nine months ended September 30, 2025, were $917 million. This is a decrease from $1.016 billion for the same period in 2024.

What was the reason for the impairment of an investment in Argentina for Halliburton?

During the three and nine months ended September 30, 2025, Halliburton incurred a charge of $23 million due to the impairment of an investment in Argentina. The filing does not provide further specific details on the underlying reasons for this impairment beyond the charge itself.

How much revenue did Halliburton generate from North America in Q3 2025?

Halliburton generated $2.364 billion in revenue from North America in Q3 2025. This is a slight decrease from $2.386 billion in Q3 2024.

Risk Factors

Industry Context

The oilfield services sector is experiencing a challenging period, marked by reduced demand and increased cost pressures. Halliburton's results reflect this trend, with declining revenues and operating income across its segments. The significant rise in impairments and severance costs suggests companies are undertaking restructuring and asset write-downs to adapt to market conditions.

Regulatory Implications

While no specific regulatory issues are highlighted in the provided text, the oil and gas industry is subject to stringent environmental, safety, and operational regulations. Changes in these regulations or increased enforcement could impact Halliburton's costs and operational flexibility.

What Investors Should Do

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Key Dates

Glossary

Impairments and other charges
Costs incurred due to a decrease in the value of assets or other non-recurring expenses. (A major driver of the net income decline, surging to $392 million in Q3 2025.)
Severance costs
Expenses incurred when terminating employees, typically including salary continuation and benefits. (Increased significantly to $169 million in Q3 2025, indicating workforce adjustments.)
Operating income
Profitability of a company's core business operations before interest and taxes. (Declined in both Completion and Production ($514M) and Drilling and Evaluation ($348M) segments for Q3 2025.)
North America Land operations
Refers to Halliburton's business activities specifically within the land-based oil and gas fields of North America. (Cited as the primary area for $115 million in fixed and other asset write-offs.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, Halliburton reported a stark 96.5% decrease in net income, falling to $20 million from $580 million. This was largely driven by a more than threefold increase in impairments and other charges, which rose to $392 million. Total revenue saw a slight dip of 1.7%, indicating a softening market. Both operating segments, Completion and Production and Drilling and Evaluation, experienced significant declines in operating income, reflecting broader industry pressures.

Filing Stats: 4,627 words · 19 min read · ~15 pages · Grade level 16.1 · Accepted 2025-10-24 12:13:35

Key Financial Figures

Filing Documents

Financial Statements

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 7 Note 4 . Revenue 9 Note 5 . Inventories 10 Note 6 . Accounts Payable 10 Note 7 . Debt 10 Note 8 . Income Taxes 11 Note 9 . Shareholders' Equity 12 Note 10 . Commitments and Contingencies 14 Note 11 . Income per Share 14 Note 12 . Fair Value of Financial Instruments 14 Note 13 . New Accounting Pronouncements 15 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 16 Executive Overview 16 Liquidity and Capital Resources 19 Business Environment and Results of Operations 21 Results of Operations in 2025 Compared to 2024 (QTD) 23 Results of Operations in 2025 Compared to 2024 (YTD) 26 Forward-Looking Information 28 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 28 Item 4.

Controls and Procedures

Controls and Procedures 28 PART II. OTHER INFORMATION 29 Item 1.

Legal Proceedings

Legal Proceedings 29

(a)

Item 1(a).

Risk Factors

Risk Factors 29 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 29 Item 3. Defaults Upon Senior Securities 29 Item 4. Mine Safety Disclosures 29 Item 5. Other Information 30 Item 6. Exhibits 31

SIGNATURES

SIGNATURES 32 HAL Q3 2025 FORM 10-Q | 1 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements HALLIBURTON COMPANY Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, Millions of dollars and shares except per share data 2025 2024 2025 2024 Revenue: Services $ 4,026 $ 4,093 $ 11,773 $ 12,454 Product sales 1,574 1,604 4,754 4,880 Total revenue 5,600 5,697 16,527 17,334 Operating costs and expenses: Cost of services 3,483 3,361 10,200 10,206 Cost of sales 1,261 1,266 3,773 3,853 Impairments and other charges 392 116 748 116 General and administrative 58 55 180 178 SAP S4 upgrade expense 50 28 112 91 Total operating costs and expenses 5,244 4,826 15,013 14,444 Operating income 356 871 1,514 2,890 Interest expense, net of interest income of $23, $28, $66, and $72 ( 88 ) ( 85 ) ( 266 ) ( 269 ) Other, net ( 49 ) ( 52 ) ( 112 ) ( 180 ) Income before income taxes 219 734 1,136 2,441 Income tax provision ( 199 ) ( 154 ) ( 433 ) ( 539 ) Net income $ 20 $ 580 $ 703 $ 1,902 Net income attributable to noncontrolling interest ( 2 ) ( 9 ) ( 9 ) ( 16 ) Net income attributable to company $ 18 $ 571 $ 694 $ 1,886 Basic and diluted net income per share $ 0.02 $ 0.65 $ 0.81 $ 2.13 Basic weighted average common shares outstanding 849 881 857 885 Diluted weighted average common shares outstanding 850 881 858 886 See notes to condensed consolidated financial statements. HAL Q3 2025 FORM 10-Q | 2 Table of Contents HALLIBURTON COMPANY Condensed Consolidated Statements of Comprehensiv e Income (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, Millions of dollars 2025 2024 2025 2024 Net income $ 20 $ 580 $ 703 $ 1,902 Other comprehensive income (loss), net of income taxes 2 3 ( 1 ) 3 Compr

Item 1 | Notes to Condensed Consolidated Financial Statements

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 2024 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

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 September 30, 2025 , the results of our operations for the three and nine months ended September 30, 2025 and 2024 , and our cash flows for the nine months ended September 30, 2025 and 2024 . 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 and nine months ended September 30, 2025 may not be indicative of results for the full year. Note 2 . Impairments and Other Charges The following table presents various pre-tax charges we recorded during the three and nine months ended September 30, 2025 and 2024 , which are reflected within "Impairments and other charges" on our condensed consolidated statements of operations. Three Months Ended Nine Months Ended September 30, September 30, Millions of dollars 2025 2024 2025 2024 Severance costs $ 169 $ 63 $ 276 $ 63 Fixed and Other assets write-offs 115 — 115 — Impairment of assets held for sale 96 49 200 49 Impairment of real estate facilities — — 53 — Cybersecurity incident ( 10 ) 35 ( 10 ) 35 Gain on investment ( 6 ) ( 43 ) ( 6 ) ( 43 ) Other 28 12 120 12 Total impairments and other charges $ 392 $ 116 $ 748 $ 116 During the three months ended September 30, 2025 and 2024 , we rationalized global headcount to align with activity levels and recorded severance expense of $ 169 million and $ 63 million , respectively. Additionally, we recognized an impairment of assets held for sale of $ 96 million and $ 49 million , respectively, associated

Item 1 | Notes to Condensed Consolidated Financial Statements

Part I. Item 1 | Notes to Condensed Consolidated Financial Statements The charges for the nine months ended September 30, 2025 , included $ 276 million of severance costs, $ 200 million of an impairment of assets held for sale related to our chemical business, fixed and other asset write-offs of $ 115 million , a $ 53 million impairment associated with facility closures and lease terminations, and $ 120 million of other charges, primarily related to legacy environmental remediation cost estimate increases. The charges for the nine months ended September 30, 2024 , included $ 63 million of severance costs, a $ 49 million impairment of assets held for sale, $ 35 million in expenses related to a cybersecurity incident, and $ 12 million classified as other, and were partially offset by a $ 43 million gain related to a fair value adjustment on an equity investment. HAL Q3 2025 FORM 10-Q | 7 Table of Contents

Item 1 | Notes to Condensed Consolidated Financial Statements

Part I. Item 1 | Notes to Condensed Consolidated Financial Statements Note 3 . Business Segment Information We operate under two divisions, which form the basis for the two operating segments we report: the Completion and 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. Our CODM assesses the performance of the two divisions and makes resource allocation decisions based on divisional revenue and operating income. The following table presents information on our business segments. Three Months Ended Nine Months Ended September 30, September 30, Millions of dollars 2025 2024 2025 2024 Revenue: Completion and Production $ 3,223 $ 3,299 $ 9,514 $ 10,073 Drilling and Evaluation 2,377 2,398 7,013 7,261 Total revenue $ 5,600 $ 5,697 $ 16,527 $ 17,334 Operating income: Completion and Production $ 514 $ 669 $ 1,558 $ 2,080 Drilling and Evaluation 348 406 1,012 1,207 Total operations 862 1,075 2,570 3,287 Corporate and other (a) ( 64 ) ( 60 ) ( 196 ) ( 190 ) SAP S4 upgrade expense ( 50 ) ( 28 ) ( 112 ) ( 91 ) Impairments and other charges (b) ( 392 ) ( 116 ) ( 748 ) ( 116 ) Total operating income $ 356 $ 871 $ 1,514 $ 2,890 Interest expense, net of interest income ( 88 ) ( 85 ) ( 266 ) ( 269 ) Other, net (c) ( 49 ) ( 52 ) ( 112 ) ( 180 ) Income before income taxes $ 219 $ 734 $ 1,136 $ 2,441 Capital expenditures: Completion and Production $ 163 $ 193 $ 546 $ 535 Drilling and Evaluation 98 145

Item 1 | Notes to Condensed Consolidated Financial Statements

Part I. Item 1 | Notes to Condensed Consolidated Financial Statements The following table presents significant segment expenses, which represent the difference between segment revenue and segment operating income and are regularly reviewed by our CODM . Three Months Ended Nine Months Ended September 30, September 30, 2025 2025 Millions of dollars Completion and Production Drilling and Evaluation Completion and Production Drilling and Evaluation Segment operating expenses: Cost of products, materials, and supplies $ 1,361 $ 911 $ 3,980 $ 2,715 Compensation 492 489 1,449 1,435 Depreciation, depletion, and amortization 156 123 462 368 Other 700 506 2,065 1,483 Total segment operating expenses $ 2,709 $ 2,029 $ 7,956 $ 6,001 Three Months Ended Nine Months Ended September 30, September 30, 2024 2024 Millions of dollars Completion and Production Drilling and Evaluation Completion and Production Drilling and Evaluation Segment operating expenses: Cost of products, materials, and supplies $ 1,354 $ 926 $ 4,120 $ 2,864 Compensation 482 464 1,443 1,390 Depreciation, depletion, and amortization 146 120 440 353 Other 648 482 1,990 1,447 Total segment operating expenses $ 2,630 $ 1,992 $ 7,993 $ 6,054 Other segment operating expenses primarily consist of maintenance, overhead allocations, facilities cost, and other miscellaneous costs. The following table presents total assets by segment. Millions of dollars September 30, 2025 December 31, 2024 Total assets: Completion and Production (a) $ 11,902 $ 11,987 Drilling and Evaluation (a) 8,043 7,806 Corporate and other (b) 5,219 5,794 Total assets $ 25,164 $ 25,587 (a) Assets associated with specific segments primarily include receivables, inventories, property, plant, and equipment, operating lease right-of-use assets, equity in and a

Item 1 | Notes to Condensed Consolidated Financial Statements

Part I. Item 1 | Notes to Condensed Consolidated Financial Statements Note 4 . Revenue Revenue is recognized based on the transfer of control or our customers' ability to benefit from our services and 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 amount of revenue to recognize . Disaggregation of revenue 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, 39 % and 41 % of our consolidated revenue was from the United States for the nine months ended September 30, 2025 and 2024 , respectively. No other country accounted for more than 10% of our revenue for those periods. The following table presents information on our disaggregated revenue. Three Months Ended Nine Months Ended September 30, September 30, Millions of dollars 2025 2024 2025 2024 Revenue by segment: Completion and Production $ 3,223 $ 3,299 $ 9,5

Item 1 | Notes to Condensed Consolidated Financial Statements

Part I. Item 1 | Notes to Condensed Consolidated Financial Statements Receivables As of September 30, 2025 , 32 % of our net trade receivables were from customers in the United States and 12 % were from customers in Mexico. As of December 31, 2024 , 30 % of our net trade receivables were from customers in the United States and 11 % were from customers in Mexico. Receivables from our primary customer in Mexico accounted for approximately 11 % and 8 % of our total receivables as of September 30, 2025 and December 31, 2024 , respectively . 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. Furthermore, we have entered int o credit default swaps (CDSs) with third-party financial institutions that have an aggregate notional amount outstanding as of September 30, 2025 of $ 750 million , compared to an aggregate notional amount outstanding as of December 31, 2024 of $ 739 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 Note 12 for further information on these CDSs. No countries other than the United States and Mexico, and no single customer accounted for more than 10 % of our net trade receivables at those dates. W e 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 a nalysis of our customers' historical time to pay, financial condition and various financial metrics, debt structure, credit ratings, and production profile, a

Item 1 | Notes to Condensed Consolidated Financial Statements

Part I. Item 1 | Notes to Condensed Consolidated Financial Statements Note 8 . Income Taxes During the three months ended September 30, 2025 , we recorded a total income tax provision of $ 199 million on a pre-tax income of $ 219 million , resulting in an effective tax rate of 90.9 % for the quarter . The effective tax rate for this period was primarily impacted by the additional valuation allowance recognized in the amount of $ 125 million on our deferred tax assets, along with the pre-tax $ 392 million of impairments and other charges, and the $ 23 million impairment of an investment in Argentina. During the three months ended September 30,

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