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Halliburton’s share price (NYSE:HAL) is up more than 2.5% today, despite second quarter results that paled by comparison to both the previous quarter and year-on-year. The key factor was that HAL beat analysts’s expectations of 29 cents per share by 51%. Halliburton generated 44 cents.
Company Chairman and CEO, Dave Lesar, pointed out that “Our strategy remains consistent – we will manage costs through the downturn, while looking beyond the cycle to ensure that we will be positioned for growth when the industry recovers. We continue to invest in technology, build capital equipment, and prepare for our pending combination with Baker Hughes. Our management team has a proven track record in navigating through cycles, and we are confident that Halliburton will be best-positioned to outperform in the recovery.”
For the last eight months, economic advisers, stock market scions, and investment intellectuals have been forecasting gloom and doom for the petroleum industry and any company associated with it.
What they seem to have generally forgotten is that the quality of life is not about our circumstances, but about how we respond to those circumstances, a truth evidently not lost on Dave Lesar and Halliburton.
It’s the Well-Managed Companies that Win.
That is the way it has always been. That is the way it will always be. So, why is it that so many invest for “the play” based on the external circumstances? They do it because they are looking for the fast buck (or presto pounds, as the case may be).
Halliburton President, Jeff Miller, indicated that he continues to expect market fluctuations, but is confident that Halliburton has a clear understanding of the global oil economy and how it may continue to affect the oil industry and how Halliburton is positioned to respond regardless of the circumstances.
“We expect the global markets will remain transitional, and in these times, operational execution is an even more critical source of differentiation. Our financial results reflect our strong execution culture, and we remain focused on delivering reliable, best-in-class service quality for our customers.”
Halliburton shares opened at 40.46, up 1.8% from Friday’s close, before hitting an early morning high of 41.60. In typical fashion, the share price tailed off for about an hour until a large block trade at 9:30 a.m. EDT pushed it right back to 41.60.
The Bottom Line is Always “Who Do You Trust?”
Your investments are always your decision, but when you ask for advice, who do you trust? My suggestion – and my approach – has always been to be able trust the company in which I am investing. Why should I trust a soothsayer, which is anyone who doesn’t really know what is going to happen? Better by far to invest with confidence in a company whose strategy is sound and whose leadership is proven to be wise.
Wisdom prepares for the inevitable, regardless of how uninevitable it may actually appear to be.
That is why, even in the bad times, a good company can continue to not only weather the storm, but even return a profit.
Even though Halliburton’s total revenue declined by 16% (to $5.9 billion) from the previous quarter, it managed its business in such a way that, despite the circumstances, it still returned a profit of $53 million.
