Tom Taulli
For investors, there wasn't much to get excited by Halliburton's (HAL) first-quarter results. The company, which is the world's number two oil-services provider, saw its earnings plunge 46% to $206 million, or $0.23 per share.
Then again, this was expected as the company still faces challenges (especially in Latin America). But for investors looking beyond the quarter, Halliburton does offer some promise.
In fact, it appears there should be a nice boost in North America. The main reason is the investment in unconventional energy sources, which require sophisticated drilling solutions. Keep in mind that Halliburton actually increased its head count by 2% during the quarter.
What's more, Halliburton should benefit from the massive infrastructure requirements in Iraq. As the country continues to see stability, the oil industry will need to essentially be rebuilt.
Finally, Halliburton is starting to rev up its deal-making. For example, the company recently agreed to spend $240.4 million for Boots & Coots (WEL), a provider of well intervention services and technologies. While it's a small deal, it will certainly help broaden Halliburton's platform. Actually, it's a good bet we'll see other tuck-in deals.
All in all, Halliburton has a sound strategy to get back on track and return to growth. But as with any company of its size, it will take some time to see the results.
Tom Taulli advises on business tax preparation and is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.
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