Halliburton Co (HAL) is fresh off the heels of another great quarter that lifted its share price to a new all-time high. Estimates have since jumped higher, providing more momentum for this Zacks #1 Rank stock.
Company Description
Halliburton operates as an oil-field and drilling services company worldwide. The company was founded in 1919 and has a market cap of $51 billion.
Energy and oil-field service providers have been seeing big gains in 2011 as explorers boost capital spending to cash in on $100 crude. That dynamic showed up on July 18 when Halliburton reported strong Q2 results that came in ahead of expectations.
Second-Quarter Results
Revenue for the period was up 11% from last year to $5.9 billion. Earnings also looked good, coming in at 81 cents, 12.5% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 7.3% over the last four quarters.
The strong quarter was driven by secular demand growth in North America, where unconventional shale and liquid plays have been a huge boon to service providers. On that note, North American revenue was up 16% while international revenue grew by 8%.
Financial Profile
Halliburton has also been busy paying down debt, falling $750 million from last year to $3.8 billion against cash and short-term investments of $1.9 billion.
Estimates
Analysts have been quick to upgrade estimates off the good quarter, with the current year up 19 cents to $3.22. The next-year estimate also added 19 cents, climbing to $4.06, a bullish 26% growth projection.
Valution
But in spite of the recent gains and strong upward momentum, HAL still looks reasonably priced, with its forward P/E of 17X a discount to its peer average of 20X. Its PEG ratio of .65 is well below the benchmark for value of 1.
12-Month Chart
On the chart, HAL jumped into a new 52-week high on the good quarter. Look for support from the trend line on any weakness. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
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