The world’s top oilfield service firms enter earnings season under mounting pressure, as volatile crude prices, U.S. trade tariffs, and shrinking shale investments threaten profitability. With Halliburton (HAL.N) and Baker Hughes (BKR.N) reporting April 22 and SLB (SLB.N) following on April 25, investors brace for clues on how the sector will navigate its toughest challenges since the 2020 price crash.
Triple Threat to Oil Services
- Price Plunge: Brent crude has tumbled 17% since January (80.15to80.15to66.65/barrel), squeezing producer budgets.
- Tariff Turbulence: U.S. steel/aluminum levies are raising equipment costs by 8-12%, per industry estimates.
- Shale Retreat: The U.S. rig count just posted its biggest weekly drop since June 2023 (down 7 to 583), as producers prioritize dividends over growth.
Earnings Expectations: Lowered but Divergent
| Company | Q1 2025 EPS Estimate | YoY Change | Key Pressure Point |
|---|---|---|---|
| Halliburton | $0.60 | ▼21% | North America exposure |
| Baker Hughes | $0.48 | ▲12% | LNG equipment backlog |
| SLB | $0.74 | ▼1% | International cushion |
Analyst Note: Baker Hughes’ rare EPS growth reflects its gas-focused contracts, while Halliburton’s shale-heavy business faces the brunt of cuts.
Red Alerts
- Activity Cliff: A sustained oil price below $60/barrel could slash U.S. oilfield work by 20%, warns Stifel.
- Cost Squeeze: Every $5 oil drop reduces shale spending by 5% (vs. 1% internationally), per Morningstar.
- China Wildcard: With Beijing imposing retaliatory tariffs, SLB’s Asian operations face headwinds.
What Investors Want to Hear
- Halliburton: Plans to shift focus from fracking to offshore and Middle East markets.
- Baker Hughes: Updates on hydrogen and carbon capture projects to offset drilling declines.
- SLB: Whether international growth (45% of revenue) can compensate for North America.
The Big Picture
“These earnings aren’t about Q1—they’re about survival tactics for 2025,” said Citi’s Scott Gruber. With Trump threatening new tariffs on $300B of imports, including drilling components, the sector’s resilience will be tested.