Halliburton Co. ( HAL ) shares traded lower Tuesday despite reporting second-quarter 2025 results that topped revenue estimates and met earnings expectations. The decline followed cautious remarks from CEO Jeff Miller, who warned of a softer-than-expected near-term oilfield services market.

The company reported adjusted earnings of 55 cents per diluted share, which aligns with analyst forecasts. Revenue totaled $5.51 billion, slightly above the $5.42 billion consensus estimate.

Operating income rose to $727 million from $431 million in the prior quarter. Operating margin improved to 13%, compared with about 8% in the previous period. Free cash flow was approximately $582 million, and cash flow from operations totaled $896 million.

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“We are more differentiated, more collaborative, and better positioned than ever before,” said CEO Jeff Miller. However, he warned that “the oilfield services market will be softer than I previously expected over the short to medium term.”

Miller added that activity reductions in a few large international markets may overshadow strength in other geographies, but reaffirmed the company’s long-term strategy around growth engines such as drilling, unconventionals, artificial lift, and production services.

Segment Performance

Completion and Production revenue rose 2% sequentially to $3.2 billion, while operating income dipped 3% to $513 million. Revenue was lifted by strong pressure pumping and completion tool sales in the Western Hemisphere but pressured by lower pricing for stimulation services in U.S. Land.

Drilling and Evaluation revenue also increased 2% to $2.3 billion, but operating income fell 11% to $312 million due to seasonal declines in software sales and higher mobilization costs across product lines.

Regional Breakdown

North America revenue remained flat at $2.3 billion, supported by gains in Canada and U.S. cementing, offset by weaker activity in artificial lift and wireline services in the Gulf of America.

International revenue rose 2% sequentially to $3.3 billion:

Latin America: Up 9% to $977 million, driven by higher activity in Mexico, Brazil, and Argentina.

Europe/Africa: Up 6% to $820 million, driven by stronger operations in Norway.

Middle East/Asia: Down 4% to $1.5 billion, mainly due to lower activity in Saudi Arabia and Kuwait.

During the quarter, Halliburton ( HAL ) repurchased $250 million in common stock, paid a dividend of 17 cents per share, and invested $32 million in its SAP S4 system migration.

During the company’s earnings conference call, Miller elaborated on the challenges ahead, noting that North America customers are now planning “meaningful schedule gaps” in the second half of 2025. He anticipates North America revenue in the second half to decline due to lower drilling and completion activity, leading to an expected full-year North America revenue decline in the low double digits year-over-year. The company continues to observe reductions in activity and lower discretionary spending in response to lower commodity price environments.

Internationally, Halliburton ( HAL ) expects full-year revenue to contract by mid-single digits, year-on-year, primarily driven by activity reductions in Saudi Arabia and Mexico. The company also highlighted that tariffs impacted its business by $27 million in the second quarter and anticipates a third-quarter impact of approximately $35 million, or 4 cents per share.

In response to these headwinds, Halliburton ( HAL ) plans to reduce costs and retire, stack, or reallocate underperforming assets. Looking ahead to the fourth quarter, the company anticipates Completion and Production (C&P) revenue to reduce and margins to soften, while Drilling and Evaluation (D&E) revenue is expected to increase.

Price Action: HAL shares traded lower by 0.31% to $21.25 at last check Tuesday.

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